War in Ukraine, emergence of new tech companies, Fintech digital projects, or even a simple tweet… Nowadays, absolutely any event is likely to impact the cryptocurrency market, and thus confirm its reputation as a particularly volatile market.
However, a new class of investors is offsetting this. These are the HODLers, whose name can be attributed to the typo of a trader who had misspelled the term “hold” on an online forum.
Certain questions related to HODLers thus quickly appear as both essential and a subject of curiosity, questions and answers that we bring to you through 3 axes:
- HODLers: who are they?
- What is their way of thinking and investing?
- What is their potential?
Crypto HODLers: Who Are They?
In the world of investment, the profiles of investors are very varied. Large company, government, consortium, lobby, and of course individuals, everyone is able to invest in cryptocurrencies, and finds their interest in it.
In this wide range of investor profiles, the HODLers have appeared. These famous HODLers are defined by certain specific characteristics, such as their age and their status. Regarding their age, HODLers are all in the 18-34 age group.
66% of young people in this age group are also indicated as already owning bitcoins or other cryptocurrencies, a constantly increasing percentage (only 46% in July 2021).
Regarding their status, they are retail investors, i.e. natural persons investing in a purely personal capacity for results in their own interest, and not within the framework of a company or global objectives.
What Is Their Way Of Thinking And Investing?
The methodology of HODLers is very simple: mix spontaneity and pragmatism in investing in cryptos, keeping in mind that it is above all a profitable long-term investment niche, and not a source quick money.
The explosion of crypto currencies in the public square has attracted a large number of people who were absolutely not basic investors. In this movement, many have rushed too much and have not been able to measure their invested funds, nor to realize what cryptocurrencies really represent and how they work.
Unlike the first waves of opportunistic investors, HODLers stand out for their particular ambitions regarding their investments in crypto currencies.
Their way of thinking, and therefore of investing, is different. They are mostly focused on the long term, and see cryptocurrencies as a real asset class.
This way of thinking, of seeing the prices of crypto currencies as assets whose value appreciates in the long term , has a certain and non-negligible impact on their way of investing.
When the market gets choppy and crypto values start to drop, these young investors are not scared off.
Instead of suddenly selling their cryptos or radically changing their short-term strategies like some, HODLers maintain their cryptocurrency portfolios and wait for these phases of instability to end, always keeping a careful eye on the comparative curves of the increases. and regular falls of each crypto owned during the last 6 days, 6 months, 1 year, and even 6 hours.
A composure and knowledge of the cryptocurrency market, and of the tech world more generally, which gives them access to the most interesting valuations.
What Is Their Potential In The Cryptocurrency Market?
As of today, we can easily identify that the volatility in the crypto sector is mainly due to the war in Ukraine.
Blocking of classic banks, economic sanctions against Russia, attempts to bypass through cryptos or exchanges doped or in free fall for certain crypto currencies in particular…
More than ever, this volatility is proving intense, and it is difficult to see the end of it for the moment. In times of crisis, cryptocurrencies experience drastic drops in value. These falls in value are explained by the investment behavior of each, this behavior becoming relatively impulsive and unstable in the event of stress.
On this point, the HODLers turn out to have an attractive potential. They are not automatically influenced by geopolitics, news, or any event in any industry.
Their way of perceiving crypto currencies is unique. For them, it is a productive long-term financial niche. This makes them particularly stable and thoughtful investors regarding their investments, which has the indirect consequence of stabilizing the cryptocurrency market at a certain level.
For example on February 24, during the Russian incursion into Ukraine. Bitcoin fell nearly 14%, before quickly regaining 15% in value. In this type of context, HODLers thus come to “hold,” or in others to “keep” their cryptocurrency portfolios.
This investor profile re-balances the impulsive selling of a large number of other traders. Because, in times of crisis, they keep their digital assets. As a result, they stabilize the market by limiting the meteoric fall in value of cryptos sold in droves. This is where their full potential lies.