If you have spent a little time in the crypto world you have likely seen the word “HODL”. As of late a new definition of “hold on for dear life” has been floating around and I would like to make it clear with this post that, “hold on for dear life”, is not what HODL means.

In specific HODL is not an impotent acquiescence to fear and the fickle finger of fate as the phrase “hold on for dear life” might suggest but denotes a position of defiant faith in a new medium of sound money and value.

The origin of the word HODL derives from a bitcoin forum post from December 18, 2013. An anonymous poster by the name of “GameKyuubi” posted a whiskey fueled rant about how he was a terrible trader and was unable to predict the lows and highs like other traders. Given that bitcoin was currently lower than when he bought it he went on to declare that traders could only take your money if you sold.

The rant continued with the assertion that only a weak-minded person would sell their coins based on fear and that he was going to ignore his fear and hold his coins. The title of this post was intended to be “I AM HOLDING” but in his inebriated state he typed “I AM HODLING”. The rest is history.

Not only did I want to clarify the true meaning behind the word HODL but also to underscore the relevance this meaning has right now. Bitcoin is currently trading roughly 35% below the recent all time high of just a few weeks ago. Many people who bought in at a higher price are struggling with the same FUD (fear, uncertainty and doubt) that our friend GameKyuubi was facing roughly about this same time 4 years ago.

The point is that if GameKyuubi stayed true to his word and did HODL he would be up roughly 1800% as of today. It’s important to not to lose focus of the bigger pattern at play.

From May of 2010 Bitcoin has appreciated by 583 MILLION percent. That’s an astounding number but context is everything and when you take into consideration that appreciation is only representative of 1-5% of the population participating in an asset with a limited supply it’s clear to see that HODLING is in fact the smart bet.

The mainstream media tends to focus on the drops and ignores the bigger picture because Bitcoin isn’t an establishment invention and if they can’t take credit for it you better believe they will take every opportunity they have to deride it. The naysayers however begin to look foolish as we look back and recall all the times they announced that bitcoin was dead only to see it bounce back into a new parabolic upside run.

If we observe the following chart which displays the previous bull runs of bitcoin we might get an idea of where we are at in this current cycle. (current activity denoted in the black line)

The unspoken meta pattern behind all of this is the transfer of value from the dollar and other fiat currency to the new asset class that Bitcoin represents. Since 1913 the U.S. dollar has lost roughly 95% of it’s value. 1913 was the year the Federal Reserve was created.

Unlike Bitcoin which can be transferred without the need for a 3rd party (banks) and has a fixed supply of 20,999,999.9769 coins the U.S. dollar supply is continually inflated and will continue to lose value. What many people do not realize is that the fed actually loans the U.S. government dollars (made out of mere paper) at interest which means each dollar in circulation is actually an instrument of debt and since the debt incurred can only be paid using the instrument of debt itself you realize the true meaning of a ponzi scheme. Once you accept this simple fact you will understand why crypto isn’t going away.

The total supply of Bitcoin will be mined somewhere around the year 2140. Currently 16.7 million coins have been mined. The philosophy of HODLING keeps the supply of Bitcoins low which continues to accelerate the value. The value of the entire crypto market right now is roughly 780 billion dollars. There is an estimated 90 trillion dollars with of fiat money available. Do the math and HODL.

Thomas

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