HODLing vs. Trading: Why Patience is Key for Bitcoin Investors

"The stock market is filled with individuals who know the price of everything, but the value of nothing." - Philip Fisher

HODLing vs. Trading: Why Patience is Key for Bitcoin Investors

Monkeying around with your Bitcoin can be tempting, especially after a nice rise in price.

Recently, Bitcoin has nearly doubled off its lows, from around $15,000 USD up to $30,000. Were you a buyer at those sub 20K prices? If so, congratulations, you’re now sitting on some pretty fat dollar gains!

Which brings you into temptation if you haven’t made a full commitment to HODL your Bitcoin through thick and thin - should I take some profits?

In a word: NO

Traders Provide Liquidity, But Not Much Else

There are always going to be speculators and traders in the marketplace.

This is a good thing, as other participants need liquidity. The ability to get in and get out of trading positions is what makes a market, so traders fulfil that role in part. But do they make the really big money?

A quick examination of the investing legends out there today reveals the answer to be no. The real money is made by the investors who had a thesis, bought in over months or years at low prices, and then held on tightly to their position for years, or even decades.

That is how you make a fortune investing: Buy right and sit tight…

Fundamental Value of Bitcoin - Understand What You Own

A well known saying from Warren Buffett is: “Price is what you pay value is what you get”.

This phrase applies to Bitcoin extremely well. Right now, less than 1% of the population really gets what this is about, as it’s just something difficult to wrap your mind around. Magic internet money will filter through the consciousness of the world over the next few decades, and those who really take advantage of this shift from fiat will be the big winners.

The true value of Bitcoin is to be determined. All we really know is that it is private, unconfiscatable money in a world where governments are printing their currencies like no other time in history, while taxing their citizens heavily and confiscating the money of those they consider to be their enemies.

The value proposition seems pretty clear, and trading in an out of an asset like Bitcoin will lead to massive regrets 10 years down the line.

Imitating the Big Investing Winners - Buy and Hold for Decades

If one examines the biggest names in investing, a general theme stands out.

Once they moved into their positions, they held them…oftentimes for decades on end.

And that is how it will be with Bitcoin. If you bought in 2013, and simply held to today, you’d be far ahead of someone who has tried to trade in and out of these massive bull and bear markets.

Time in the market always defeats those who try to time the market. It’s a tried-and-true adage, and it will continue over the next three decades as Bitcoin becomes the money of the world.