Finance

Investing in cryptocurrencies? There’s much more to do than just HODL’ing it!

Investing in cryptocurrency can be an opportunity to make good money, but one has to know how to handle the money, be patient and be smart. The problem when it comes to cryptocurrencies is that the market is very volatile for example in the end of December 2017 cryptocurrency peaked at around $20,000, to the horrible crash that happened in February of 2018.

Volatility is not something new though, for example when the price of money was directly linked to Gold, (The Gold Standard), the value of god was incredibly volatile. Paper money does not exempt any rules, for example after the war Germany’s Reichmarks hyper-inflated to an immense degree due to the debt Germany was in, and the country just recklessly printing money, this, in turn, ruined the countries finances due to overinflation.

These and other instances of currency volatility happened because of government intervention, but cryptocurrency works on a different market. Cryptocurrencies volatility works differently because cryptocurrency uses a decentralised market, the problem with its volatility comes from the speculation of investors. Since its value comes from people investing in it, if a lot of people decide to not invest that would mean that the value of the bitcoin, for example, would plummet, and same works vice versa, if a lot of people want it, it is going to increase in value.

H.O.D.L.

HODL is an acronym for Hold On for Dear Life, which basically is a buy and hold strategy, where an investor would buy bitcoin and if the market crashes the investor would opt to hold the bitcoin instead of selling it, with the hope that it would begin to ascend at some point in the future.

This misspelling of the word hold was from a user called ‘GameKyuubi’ who appears to be drunk while writing the post and misspelt hold during the crash that happened in 2013. This turned to a very popular acronym for a technique where investors buy and hold stocks.

This technique is one of the safest when it comes to investing but one has to be patient and not get dismayed by a market crash. Besides HODL there are other things to do with your cryptocurrency.

Opting not to H.O.D.L. your assets.

If you are opting to use your cryptocurrency there are different ways to make good use of it, for one you can always exchange it and get your the moneys worth of what you already own. Or you can exchange it for another currency that is doing better. For example, if bitcoin isn’t doing so well one can exchange that currency with Etherium or Litecoin, obviously if it is a smarter transaction. A golden rule when it comes to investing is to never invest more than you afford to lose, so be cautious with how much you are willing to invest, and always get a second opinion, but finally it is your hard earned cash that you are putting on the line so learn also to trust your judgement.

Wagering

Wagering could be another form of using your money in a more enjoyable way. When one wishes to start gambling a bit of their money, one should pick a site which offers a vast majority of games and also sports betting. Not all sites accommodate such a need but a site like Bovada offers an online Casino alongside sports betting, this means that you can either choose to play poker or a slot machine and other casino games, or wish to bet on your favourite football and/or basketball team. Here is also a review of the Online betting site.

Online sites like Bovada work with an online wallet which allows cryptocurrency transactions like bitcoin, so instead of holding your money, and hoping that the market would actually climb up again, you can choose to get a portion and play some poker.

Travelling

Due to the growing acclaim that cryptocurrency has come by throughout the years, it has become possible to travel with bitcoin. Certain sites accept cryptocurrency as a method of payment like booking hotels, rental cars and tours and other things of the sort.

Shopping

You can easily find decentralized e-commerce sites where they allow you to purchase with bitcoin this eliminates middlemen fees completely. A perk when it comes to shopping online with bitcoin is that since cryptocurrency works with a decentralised method, so you can buy something completely anonymously.

Conclusion

In conclusion, there are many different viable options on can choose from instead of just opting to hold their money until the right time to trade it until the market rises. One rule about HODL-ing is that you can never HODL too much, and don’t know if the market will continue to rise or not. Hodlers cannot just stay idle though, investors need to occasionally rebalance their portfolio which means to sell high and buy low. Forbes discusses this well in an article dedicated to Hodl-ing. It is best to keep some of it stored away and some of it spent on leisure, like travelling, online shopping and even wagering it on your favourite game and/or sport, a healthy balance is always the smartest choice.