The mind of a HODLer

[Jet Cash]

I'm a Bitcoin maximalist, and a HODLer. Well I like to think of myself as a HODLer, but I'm not sure that I'm really committed mentally. I've been collecting small amounts since the price was in two digits, and I've been picking it up in payment for goods that I've sold, so my wallet accumulation has been pretty slow, and it isn't very full. I have never bought anything using Bitcoin, as I want to hang on to the coins that I collect. I decided that I should try a bit of trading to increase my holding, and this has made me think about my attitude to the HODL.

I put a few hundred pounds into a CoinBase account to experiment with some trading. I chose CoinBase because they support Sterling deposits and withdrawals. I've been watching the statistical videos on YouTube, and I decided that I would have a go at trading the wicks whilst the Bitcoin price is going sideways. I wanted my experiment to be low risk, so I don't use any gearing ( leverage ). The idea is to try to recognise a price channel, and buy and sell on the wicks outside that channel. The movement is pretty small, so profits are minimal. I tend to use a spread that is too wide, so I'm not trading very often. Once I had started I was able to keep both a buy and a sell position open, and I made a few gains. The problem started when the price broke to the downside and settled into a new channel. I then started to think like a trader, and I decided that I should take the loss, and continue to trade. This is not the mindset of a HODLer.

A HODLer believes in the long term growth in the price of Bitcoin, and he price averages to build his holding. Taking a loss in the trading activity was not the correct choice. A price drop doesn't become a loss until you sell and realise the loss. Profit is exactly the same. What I should have done was to move the coins that were showing a notional loss into one of my long term wallets away from CoinBase, and kept them there for a few years. I could then have replaced the fiat in my trading account, and carried on without the mental shackles created by a notional loss. I will also have to develop the mental freedom that allows me to purchase coins at ( say ) £3,100 if I think there is a potential profit, even though I realised a gain a few days earlier at £2,900.

Do other members have these difficulties, or do they not try to combine the attitudes of a HODLer and a trader?

[EDIT]
I missed the golden cross at £3,005. Now I have to make a decision. Of course, do nothing and watch is a valid choice.

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[kenzawak]

I'm a hodler for sure.
What you need as a hodler is a goal, a dream or whatever you wanna call it. Just set a BTC price and hold until it gets there. In the mean time, accumulate as much as you can, if possible at the right moment (like now !).
I take January 2018 as a reference, how much profit I had made at the time and think about what the price of BTC would need to be for me to reach the kind of profits I want.
In the meantime, I check my portfolio everyday but still stay cool whatever happens. I am positive Bitcoin (and even other cryptos) will succeed, I'm not worried.

I'm a former gambler (in sports) so I know I wouldn't be successful in trading. I'd go 100%, be too greedy and in the end probably fail.

I believe that as a holder you need a plan and you have to stick to it.

[Jet Cash]

The HODL approach of price averaging is really a form of trading. I can understand your problem with spending Bitcoin, it's the reason that I can't bring myself to buy alts - most of the exchanges seem to require this.

The only way I can split between trading and HODLing is to have two accounts. I have my HODL accounts, which are controlled by Core nodes, and I don't ever withdraw from them. My trading account on CoinBase Pro is completely separate, and I have to block the thought that I am actually trading Bitcoin. I did have a temptation to move some Bitcoin over to CoinBase when I wanted to short, but I really need to  avoid doing that. I need to speculate with fiat, and not with real money like Bitcoin.

[Pmalek]

A hodler believes in the project. If you kept your Bitcoin during the big bear market it means you have faith and you believe bitcoin will bounce back one day. A trader believes in the profitability of the trades he makes. These are based on the information he has about a project, negative or positive. A trader is probably not that interested in the future of the projects, long term. He buys and sells what he believes will result in the biggest profits.    

[MoonCrypt]

HODLers are real believers and understand technology better!!

HODLers look more at what the technology will become in years and have high expectations

HODLers are very hopeful individuals

HODLers are brave at heart 

[odolvlobo]

Do other members have these difficulties, or do they not try to combine the attitudes of a HODLer and a trader?

Attitude/ideology of HODLer and trader are very different, i simply can't see it can be combined.

I agree. In fact I consider them to be completely opposite.

A HODLer accumulates bitcoins for the long term and considers short term fluctuations to be irrelevant.

A trader is only concerned with short term fluctuations in order to make money regardless of what happens in the long-term.

[Jet Cash]

But most people are capable of developing more than one skill. For example, one can be  good statistician, and a good gardener, and the knowledge gained in each discipline can help in the other. With fiat money, one can have a long term savings account which is kept for a specific project in the future, at the same rime one can have a current account that can be used for daily transactions.

I decided that using fiat savings for Bitcoin price speculation ( or another alt ) was a way to build my HODL wallet. My point is that the two disciplines can coexist, but one has to be strong willed enough to leave HODL deposits untouched, and not to use them for price speculation. You must follow this rule even if you are sure that Bitcoin is in a bear market.

[sheenshane]

A hodlr could be considered as a trader as well since you are actually buying from low and thinking of selling it when the price went high. As a Hodlr, you can't also speculate things and must be committed to your plans, strategies, and goals.

If you have nothing to lose and you consider your coins as investment/asset then that would be enough and fine. Believing in long-term projects/operations isn't bad but you also need to be passionate.

[cryptobaro]

Well as a hodler, hodling actually means hoping for me, I tried trading to be honest but it is not my type, too stressful to track prices every second. Now I am wishing a better market.

[Jet Cash]

They make trading incredibly complex, and I'm not sure that it is justified, given the quantity of wash trading and other manipulation. I backed away a bit from TA, and all I do is to trade EMA crosses, and I don't use gearing. It's starting to help me to build my Bitcoin wallet, but it's pretty slow, and I don't make spectacular profits.

I find it really interesting to watch the market activity, and it does help me to get a better understanding of the potential for crypto.

[COFFEE BREAK UPDATE]

We've just gone though a death cross on the 15 minute EMA, and I'm pleased that I have no open positions at the moment. Well maybe I have from a conceptual position. My account balance is solely in Sterling, so that means I am long in GBP, and short in Bitcoin. I'll wait for a golden cross, and I'll open a couple of buy positions.

[amishmanish]

Thanks for sharing this Jet. It gives me a chance to analyze and put my own views on this.

I am a HODLer by circumstance. There is no way for me to legally spend BTC around here. If i had, I'd probably be spending and selling stuff with it. I cannot be a trader as it seems to be mostly a game of networking and shilling in the crypto space. If you are at the right place at the right time (for the right announcements), you can make some money selling to others. As far as trading only BTC is concerned, it seems an uninteresting, technical exercise and I cannot, for the life of me, gather enough patience to watch all those wick/candle/trend videos.

So that leaves me to answer the question if I am a maximalist. I don't think so. I see more potential in bitcoin being the main currency for an alternate economy based on blockchain products. Open sourced information/ knowledge and products that have a market of their own. The hobbyists, small entrepreneurs and the good samaritans are the three main stakeholders in this ecosystem. The only problem is this sounds too anti-government and anti-tax for the comfort of masses as well as those hallowed institutional investors.

I totally agree with you on the best use i can put my little fractions of BTC into as of now.  A Lightning node and I am on it.

 

[Jet Cash]

I don't agree with a couple of your comments. Whilst your comment about the stakeholders may have been true in the beginning, I think the people you have mentioned are being squeezed out, and they are being replaced by bankers and investment trusts. Bitcoin is a unique product, and there can never be another equal creation. In its early days, it was vulnerable to a 51% attack, but this wasn't realised, and there wasn't sufficient value to warrant such an action. Now that the technology is understood, any product that attempts to emulate Bitcoin will become the victim of such an attack.

The usage case is another interesting point. Bitcoin was created with restrictions that appear to be designed to prevent it ever becoming a volume global payment system - the 10 minute block generation time, and the 21 million cap are two examples of this. However, it is a tremendous system to use as a store of wealth, and a means of wealth exchange, and in this instance, it is very similar to gold. In the same way that gold was used to gain initial credibility for the fiat monetary system, Bitcoin can be used to build a fast micro-payment system based on an underlying asset value. However, you can bet that once it gains acceptance, the bankers will be there with fractional reserve banking. We can already see this happening with some exchanges. It is for this reason that I will only leave trading funds in an exchange wallet. I'm about to move my Bitcoin out of my CoinBase wallet, and into one of my HODL wallets. This is not a reflection on CoinBase, as I think they are one of the more reputable exchanges, but a reflection of my opinion of the whole banking ethos. An exchange is basically a Bitcoin bank.

[amishmanish]

I don't agree with a couple of your comments. Whilst your comment about the stakeholders may have been true in the beginning, I think the people you have mentioned are being squeezed out, and they are being replaced by bankers and investment trusts.

I think you are under-estimating the capability of the people who will build or are building crypto based products. At the same time you are over estimating the importance of bankers or investment trusts. Bankers are a reality but value creation cannot come without crypto becoming something bigger than another wealth management tool. I also understand that this may seem as an overly optimistic view considering the range of scams and vaporware that has made the rounds in name of blockchain innovation. Yet, the bankers/ big money still wants its stake so it doesn't miss out when real value creation starts.

Bitcoin is a unique product, and there can never be another equal creation. --snip--Now that the technology is understood, any product that attempts to emulate Bitcoin will become the victim of such an attack.

The new products don't necessarily have to emulate bitcoin or compete against it. In fact, Bitcoin was supposed to enable these innovations.(Till Ethereum became the next best option(. As far as developers are concerned (Both the sincere ones and the scam-artists), Ethereum has leveraged this better than bitcoin.

The usage case is another interesting point. Bitcoin was created with restrictions that appear to be designed to prevent it ever becoming a volume global payment system - the 10 minute block generation time, and the 21 million cap are two examples of this. However, it is a tremendous system to use as a store of wealth, and a means of wealth exchange, and in this instance, it is very similar to gold. In the same way that gold was used to gain initial credibility for the fiat monetary system, Bitcoin can be used to build a fast micro-payment system based on an underlying asset value. However, you can bet that once it gains acceptance, the bankers will be there with fractional reserve banking. We can already see this happening with some exchanges. It is for this reason that I will only leave trading funds in an exchange wallet. I'm about to move my Bitcoin out of my CoinBase wallet, and into one of my HODL wallets. This is not a reflection on CoinBase, as I think they are one of the more reputable exchanges, but a reflection of my opinion of the whole banking ethos. An exchange is basically a Bitcoin bank.

The oft-quoted comparison with Gold is apt but incomplete. Bitcoin is so much more than just a micro-payment system or a store of wealth. I agree that exchanges are basically Bitcoin banks. In fact, that is why exchanges are the ones which are fostering the most competition in cryptosphere. They are doing this by listing coins left, right and center. And allowing fiat on-boarding for more and more pairs. Banks ultimately need assets they can invest into. In the process, they foster innovation/ entrepreneurship. I'd mention again that my view may sound overly optimistic, but that is what the exchanges are doing.

[Jet Cash]

Well I've got a difficult decision today, but it's a nice decision to have to make. I noticed a bull cross a couple of days ago, and I opened a buy order and went to bed. In the morning, I discovered that the order had filled on a red wick, and I had bought about £2 above the low for the day. That makes a change, I usually set the price too low, so I only end up buying when the market turns bearish. So now the whole of my trading account is held in Bitcoin, and it's showing a nice profit.

So now I have to decide if I'm really a HODLer, or a trader. There has been a bit of profit taking, but nothing that looks to me like a significant correction is on the way. I've got a few choices.

Move my trading coins into a HODL wallet, and refund my trading account with fiat.
Open a sale position to try to catch a green wick, and rebuy later.
Sell and take the profit,
Do nothing and just watch the market.

I've opened a sale position at a madly high price, but I might cancel that. If it does get triggered, it will mean that the price is in a bull stampede, and who knows where that will stop. I'm still a long term believer in Bitcoin, so probably the most sensible thing for me to do is to move the coins into a HODL wallet, reload my trading wallet with fiat, and get out of McDonalds and sell some of the rubbish in my garages to rebuild my fiat savings. That is a bit like admitting that I'm rubbish as a trader though.

[10:45 English time]

Edited later to save face - I was completely wrong about the price, and I missed the bear cross. Now I know why they are called crosses.

[Jet Cash]

I thought I would revisit this thread now that I've had a bit more time to play with the market.

I'm coming to the conclusion that there aren't just two categories - traders and HODLers, but there is a third category. This is the accumulating investor. I've seen some traders say that they would have made more money by just buying coins when the price was bumping along at the bottom, and holding the coins until the price went up. This would have freed them from market watching during the bull run. Of course the rules are different once Bitcoin turns into a bear market again.

I've been doing a bit of trading to increase the amount of Bitcoin I can buy with my investment deposit, and as soon as the price turns against me when I am holding Bitcoin, then I move the coins into my savings wallet, and I replace the investment fund with fiat. I believe that it is important to make sure that all savings are kept in a wallet over which you have complete control, and free from the temptation to speculate with it. I will watch the market, and at some stage in the future I will start to take profits. I don't intend to HODL and leave my Bitcoin in my will. I'm not sure of a name for a medium term investor, who optimises his accumulation price.

[toast]

HODLers are real believers and understand technology better!!

HODLers look more at what the technology will become in years and have high expectations

HODLers are very hopeful individuals

HODLers are brave at heart 

it's really true and it's a true holder who will never panic when the market experiences a drastic decline like last year. because the thought of a good and good holder is better to be patient, wait for a long time, but can earn a huge income. and that's what a true holder thinks

[joniboini]

I've been doing a bit of trading to increase the amount of Bitcoin I can buy with my investment deposit, and as soon as the price turns against me when I am holding Bitcoin, then I move the coins into my savings wallet, and I replace the investment fund with fiat. I believe that it is important to make sure that all savings are kept in a wallet over which you have complete control, and free from the temptation to speculate with it. I will watch the market, and at some stage in the future I will start to take profits. I don't intend to HODL and leave my Bitcoin in my will. I'm not sure of a name for a medium term investor, who optimises his accumulation price.

Sounds like a nice strategy, but it requires time to do it I assume, especially those traders that you mentioned buying at the bottom and sell when they reach some points (maybe fibbo or resistance line). That's probably one of the challenges or maybe the factors in which people differ. I personally don't have enough time to find the bottom or do any trades, so accumulating and wait for the next bull run is probably a better choice for me. I'm not saying it's the best strategy to get profits, because you risk your chances to exit early when there's an incoming dump and then buy later.

it's really true and it's a true holder who will never panic when the market experiences a drastic decline like last year. because the thought of a good and good holder is better to be patient, wait for a long time, but can earn a huge income. and that's what a true holder thinks

Holder doesn't earn an income, but profits. Just for the sake of clarity.

[xvids]

Do other members have these difficulties, or do they not try to combine the attitudes of a HODLer and a trader?

Attitude/ideology of HODLer and trader are very different, i simply can't see it can be combined.

I agree. In fact I consider them to be completely opposite.

A HODLer accumulates bitcoins for the long term and considers short term fluctuations to be irrelevant.

A trader is only concerned with short term fluctuations in order to make money regardless of what happens in the long-term.

I agree HODLers doesn't care about the fluctuation they wouldn't care about the current price since they wouldn't do anything no matter what.
They would hold it untill it reach their expectation or when they already need it.

[Arian247]

Personally I'll prefer to call myself a trader becaus hodling little amount of btc isn't really worth it so I prefer to trade and then use the profit to acquire more btc call me greedy but that's just my style

[Strufmbae]

I have been off the grid for few months.
I have a little amount of btc that i keep on hodling since i make life in real world and now i came across to know about the price and it is making me lose hope to crypto, but i do have this strong belief that someday my tenths will turn into thousand.

However, it will be a long run. I'm not that good in trading or any statistical strategy to make my fund grow big, atleast I have a small amount of btc to Hodl for my last option.

Hodling does not make you worry if you believe.
#safehodlplay