Bitcoin has been on a wild ride in the last year. It’s seen its fair share of highs and lows, but it seems to be holding up well so far. This article will explore the pros and cons of trading vs HODLing your Bitcoin investments.
The trading vs holding crypto reddit is a question that has been asked over and over again. It is important to know the difference between trading and HODLing before investing in cryptocurrency.
Should I sell or keep my bitcoins once they’ve grown in value?
This is one of the most often asked questions among novice crypto investors.
As we all know, there are many approaches to the crypto market.
You have two options:
- To make a fast buck, day trade.
- For a long-term investment, buy and HODL cryptocurrencies.
Both trading and investing have the objective of increasing the value of an investment, but they go about it in different ways.
So, what is the ideal cryptocurrency approach for you? Understanding the distinction between trading and hodling is crucial.
Hold on for dear life is an abbreviation meaning “hold on for dear life.”
Someone misread the term “hold” in an early Bitcoin letter, and readers mistook it for an acronym for “hold on for dear life.”
It’s now become a meme, implying that, despite severe price volatility, you should keep your bitcoin investment and disregard the emotions.
Investors vs. Traders
Traders and investors earn money in various ways.
Traders, in general, are individuals who profit from minor price fluctuations. They profit from price fluctuations.
They attempt to outperform the market in the near term.
They attempt to timing their entries and exits by studying the market, feeding off the news, reading and following market “prophets.”
Using a brief period (as little as days, hours, minutes, or even seconds) to enter and leave positions rapidly in order to earn smaller, more frequent profits.
Crypto investors, often known as HODLers, have a longer-term view.
They seek higher profits by purchasing and holding excellent cryptocurrencies with a core use case for an extended period of time.
Long-term investors are less concerned with liquidity and price volatility since they often keep coins through market ups and downs for years or decades.
There’s nothing wrong with day trading for profit.
Isn’t it as easy as buying cheap and selling high?
In reality, it’s very difficult to resist the emotional pull of not selling your bitcoin while the price is skyrocketing.
The crypto markets, however, are controlled by bots, robots, or automated trading organizations.
Bots account for up to 80% of overall transaction volumes on Bitcoin trading platforms, according to Bloomberg.
This essentially implies that bots will always receive the market’s highest bid and/or lowest ask pricing.
Human traders will never be able to surpass robot traders when it comes to day trading.
Frequently, we only heard about the greatest crypto trading wins.
However, we don’t hear about the many other tales of defeats for each spectacular fast victory.
Lengthy-term investors, on the other hand, have a very long time horizon.
They purchase and hold the appropriate cryptocurrency, which is now undervalued and in low demand but will become very valuable in the near future.
Sometimes the best thing to do is to do nothing.
If you had put $1,000 into Amazon ten years ago, you would now have approximately $20,000 in your pocket. Even Warren Buffett acknowledged that he was too naive to predict that Amazon’s Jeff Bezos would thrive on such a large scale. When he had other options, he chose not to invest in Amazon. He didn’t see or appreciate the benefits of technology.
$1,000 in Microsoft is $8,000 in other currencies.
In Netflix, $1,000 equals $100,000.
$1,000 in Apple currency equals $9,000 in U.S. dollars.
In Bitcoin, $1,000 equals $10,000,000. (Even after an 85 percent crash in 2018)
If only the vast majority of investors had the patience to wait… Think about it!
You’re speculating if you’re purchasing and selling cryptocurrency in the hopes of making fast money.
It’s a zero-sum game when it comes to speculative trading. 9 must lose in order for you to win.
In an unfair market, ordinary investors are more likely to lose to those who have an unfair edge and are manipulating the system. ~hodlbot.io
Trading, however, does not bring value to society. It does not contribute to a better world. It will only benefit your bottom line.
By owning crypto assets, investors, on the other hand, invest in the economy as a whole.
Willem Van den Bergh could not have said it more succinctly.
Every time you choose to keep money, you reduce the quantity of money in circulation… As a result, the buying power of that money per unit increases. As a consequence, prices drop, and all participants in the economy gain money. The price per unit of Bitcoin rises while you keep it in your wallet. The longer individuals keep Bitcoin, the less volatile it becomes, leading to a steady price rise. This trend toward a steady price rise makes Bitcoin more appealing to new audiences, resulting in a feedback cycle.
It’s a win-win situation if you keep Bitcoin and watch it flourish.
Day trading is hailed as the most effective method to make fast money. Indeed, there is never a shortage of trading gurus and specialists willing to educate you how to earn money quickly via bitcoin trading.
Unfortunately, no one has psychic abilities.
People still turn to ‘pundits’ on Twitter, TV, and social media for advice on buying and selling Bitcoin.
It turns out that the forecasts of these experts are only correct approximately 47% of the time. They make millions of dollars from the eyes they attract, newsletters they send out, and financial goods and services they offer.
Have you ever heard of anybody becoming wealthy by following the advise of talk show hosts?
The reality is that there is no such thing as a get-rich-quick program.
That’s simply someone who wants to make money off of you.
Traders often switch from one cryptocurrency to the next, changing their minds and positions as market emotions and trends shift. They concentrate on charts and graphs in order to earn quick money.
In the $BTC photo, I do not think this is an H&S top. twitter.com/nwng4QwK4Y
10 June 2019 — Peter Brandt (@PeterLBrandt)
To gain a broader perspective, zoom out to see that we have long-term, patient investors who see that Bitcoin is a revolutionary technology that will alter the world forever.
“We’ve been investing in crypto assets for 5+ years,” says Andreessen Horowitz. We’ve never sold any of those investments and have no plans to do so in the near future. We designed the a16z crypto fund to retain assets for at least ten years.”
Do you want to spend the rest of your life looking at a wacky candle-stick stock chart or do anything to improve yourself?
To earn fast gains as a trader, it’s all about entering and leaving deals with the correct coin at the right moment. It makes no difference if Bitcoin, Ethereum, or any other cryptocurrency they trade succeeds or fails.
It makes no difference. You’ll earn money as long as you time your entrance and departure locations properly.
Trading is, in essence, the most addictive kind of gambling.
If you’re not cautious, you could find yourself staring at your computer screen for more than 10-12 hours each day.
Trying to absorb all of the information and follow the mainstream media’s advice on how to earn money. It may be very unpleasant and, more than likely, unproductive.
If you really believe in Bitcoin and cryptocurrencies, consider which assets have the most potential, useful use cases, and will matter the most in the next decade.
The HODL mindset requires mental and emotional effort. Only the investor who has worked hard to envision the market repeatedly striking him in the face can sit tight. Demeester, Tuur
Invest in cryptocurrencies, leave them alone, or intend to invest regularly over time, independent of market circumstances or price changes. Take it off the exchange, keep it safely in your own hardware wallet for decades, and then access it one day to discover it’s worth millions of dollars in fiat currency.
1. Purchase Bitcoin (BTC) 2. Withdraw bitcoins to your private keys 3. take no action
Step 3 is by far the most difficult! This is completely counterintuitive.
— Pierre Rochard  ] ] ] ] ] ] ] ] 3 June 2019 (@pierre rochard)
Consider this: If you remove all of the emotions, volatility, and uncertainty from cryptocurrency investment, it’s clear that passively holding the correct coin for extended periods of time (decades) without trying to time the market is the best option.
Because I am not a financial adviser, my suggestions should not be considered professional investment advice.
Frequently Asked Questions
Is it better to trade or mine Bitcoin?
If you are looking for a quick and easy way to make money, then trading Bitcoin is the best option. However, if you want to invest in Bitcoin and hold it for the long-term, mining is the better option.
Is it better to invest in crypto or stocks?
The best investment in the long term is to invest in yourself.
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