In this video, I'll be sharing my thoughts on the raging debate in the cryptocurrency community about the merits of day trading cryptocurrencies as opposed to long-term holding or "HODLing" them.
***I am in the process of adding many of my videos from YouTube on to DTube. Apologies for any posts that you've already seen before!
Original date of upload: June 6th 2017
▶️ DTube
▶️ IPFS
Day trading is too stressful for me. I rather HODL. So far it has been working for me. However, I do like to have some staking coins that give small rewards for holding.
“Don’t trade bitcoin or altcoins , just buy and hold and you’ll get rich.”
Well, if we look back in hindsight over the past few years it’s obvious that if you bought Bitcoin in the $200’s and were still holding above $2,000 that would be an incredible return.
So yes, the “buy and hope” strategy works well when markets have incredible gains – and Bitcoin has been the best performing market on the planet for the past few years.
But if we look at the total number of people around the world that own bitcoin (which I have no clue exactly how many people there are), the fact is that only a small percentage of those people bought and held bitcoin from below $200’s.
There’s a large majority of new people that have purchased bitcoin for the first time above $1,000 – that’s why the price went from $1k to $3k in just a few weeks. It didn’t just magically happen. People had to buy at those levels for the price to go up.
And because of human nature, people tend to buy into something when it’s hot or popular. That usually means when the price is high. And a very high percentage of those people that buy high end up panic selling when bitcoin’s price falls by 50%+.
The same thing happened in 2008 during the financial crisis. A lot of people were buying the stock market at all-time highs. Many of them were doing it because Jim Cramer was pumping the hell out of stocks right before the crash. Then a lot of people sold their stocks when they fell by 50% and missed out on the biggest bull market of the century.
If you’ve been in bitcoin for a few years, then you know how volatile the price can be. Bitcoin’s had several bubbles. The beautiful thing is that, so far, after every bubble price has recovered and made a new higher high. So yes, in theory, if you time it right (which is very hard to do), and buy on panics and hold long-term you’d have made great returns.
insightful as always!
I like to day trade a small amount and then add the profits to my Hodling wallet.
With this volatility day trading can be death or glory...I rather hold to be honest, but I admit that if you combine the two, it can be a bomb!
When the market get's very hot for one coin I think it's essential to trade sometimes. It's all about managing risk and hedging.
I have recently let go of some coins when I see a bit of profit. Didn't hold very long since Bitcoin was down for number of days until the last two days that I see it in green. Bitcoin is affecting everything. I will buy in to level up when my coin is falling. I had even just use my falling coins to buy steem when my litecoin fell like crazy. True that hodl for long term can profit and we must just be patient!
I'd always prefer buying and holding a lot of low-price coins. Why? Because if you buy something at 0.03-0.04 USD lets say, You dont have to spend a lot of money to get a lot coins and that's okay. Another plus is the price wont probably go down to 0.00 but will increase just because other people like me decided that the coin's price is low and it is worth buying. The chance to double/triple/etc your money is a bigger. A coin going from 0.04 to 0.08 can happen and is way more possible than Bitcoin going from 17k to 34k, isn't it? Of course all of this is just my opinion. Best wishes, Sveto.
what happened to binance will make most traders learns how to HODL
lol for a day or two
I have hodl positions and trade positions.
to be honest, i do both. i like to get in on promising projects early and hold them for long term. but scalping and trading daily can make you dough in any market.
Your post is very interesting for all of us, thank you form
Great one the post,
From sharing cryptocurrency community,,really
There are so many new developments coming up in this space all the time that purely holding doesn't really make sense in a lot of cases.
Try to do your research and keep up with newcomers trying to solve the same problems your coins are, and if the new one is better, sell to get that.
Unless you really know what you're doing, you should stay away from trading.
Yes, many risk involved in cryptocurrency world, you can lose your private key – if you had it backed up on paper – you can lose it, it can be flooded or burn; if you had it backed up on a cd – you can break, scratch, or lose the cd; if you had it backed up on a USB stick – USB sticks go bad remarkably easy
your private key can get hacked or stolen – hackers with access to your computer via spyware, remote viewer, WiFi network, the internet, can access your computer and copy your private key (if you keep it in a file) or your wallet.dat file. Whoever owns the private key, owns the tokens.
your exchange account can get hacked or broken into – same as above, they can find out your email/password combination, get in your account and transfer the funds elsewhere
your email/password combination for the exchange can be obtained in plain text, if you register at a malicious website that serves cryptocurrency traders (or an ICO, an airdrop of cryptos, a new exchange etc) – and instead of them encrypting your password on its way into the database, they can preserve it in plain text format if they want to, then use the same email/password combination to try to log in on other exchanges, especially ones that do not support two-factor authentication
your email/password, account, wallet or private key can get easily stolen if you use your Android device to trade cryptocurrencies because Android devices are the least secure, and can get their traffic intercepted and apps decompiled with almost no effort
due to the nature of cryptocurrencies, you can lose all or most of your money in the big price fluctuations that can vary with hundreds of percents in a single day
the cryptocurrency you’ve invested in can be abandoned by its developers after a pump-and-dump scheme, or after the ICO
the cryptocurrency you’ve invested in, can just quietly go to 0.00000001 satoshi and never recover if there is no interest in it and no development
the cryptocurrency you’ve invested in, can get delisted from all exchanges it is being traded on, and/or just disappear
the cryptocurrency you’ve invested in, can suffer source code bugs and complications that can mess up your balance/transactions/wallet and your coins can be lost forever
So yeah, be wary when trading/investing in cryptocurrency
I'm considering starting to use crypto not as an investment, but as actual currency. Actually putting it into the flow of usage. Making it more mainstream.
Hold can get boring, but you make a valid argument. Thank you for this, because this has been plaguing my mind..