“Hold to die” is one of the popular terms in the crypto world, but there are two ways to understand it. So with what meaning should we understand this term correctly? Let's find out through the article below!
1. What is “Hold to die”?
"Hold to die" is a popular phrase in the financial investor community, especially in the cryptocurrency market. It refers to holding on to a particular cryptocurrency and not selling until a large enough profit is generated to sustain the investor for the rest of his life.
This phrase is composed of 2 concepts:
“Hold”: this is an acronym for Hold On for Dear Life (HOLD) which refers to a term in the crypto world, referring to retaining purchased cryptocurrencies and not selling them regardless of market fluctuations. Star. This action shows confidence that the price of the coin will increase in the future and users do not want to sell it early.
“Die”: this word refers to trying to hold on to crypto currencies, even when the market begins to fluctuate and the value of the currency decreases. "Dying" here can show the user's patience and determination.
So how many ways to understand this phrase exist on the market? Let's go through the next part!
2. “Hold to die” has two interpretations
The term "Hold to die" is a controversial term with two different understandings as follows:
Holding a coin helps sustain the holder until they die: this is a positive interpretation - simply holding a coin until they sell it and collect the money can give them a rich life. until they die.
Hold until the holder fails: A negative interpretation of this term refers to investors holding on to coins without any particular strategy or reason. They may pursue a "hold" strategy without risk management or without a plan to exit the market in the event of negative volatility. The result can lead to huge losses as the value of the coin plummets.
However, the first understanding is more common and is used as a strategy.
3. Benefits when applying the "Hold to die" strategy
Here are some benefits of applying the “Hold to die” strategy in the crypto market:
Reduce stress during market fluctuations: In a volatile market like cryptocurrency, investors often encounter drastic price swings. "Hold to die" is similar to holding an asset long term, allowing investors to avoid having to make sudden buying and selling decisions based on short-term fluctuations.
Higher Long-Term Returns: Some cryptocurrencies have experienced significant growth over the years. Those who hold this asset for a long time often have the opportunity to realize large profits when the price suddenly increases. The "Hold to die" strategy helps them take advantage of this profit.
Avoid short-term trading risks: Short-term trading in the cryptocurrency market requires a high level of knowledge and skill and can cause users to experience significant losses. "Hold to die" eliminates the need to constantly monitor the market and make short-term trading decisions.
Reduces the impact of market sentiment: In the cryptocurrency market, market sentiment often changes rapidly. Investors can be motivated by fear or greed. The "Hold to die" strategy helps them maintain a stable mentality and avoid decisions based on emotions.
In short, "Hold to die" has become part of the investment mentality in the cryptocurrency market due to its large potential long-term profits and the ability to avoid decisions based on emotions. It represents a change in the way investors approach the market and deal with price fluctuations.
Above are the benefits of applying "Hold to die". So does this strategy have any risks?
4. Risks when applying the "Hold to die" strategy
Unpredictable price fluctuations: The cryptocurrency market is famous for its wild fluctuations and prices can change suddenly in a short period of time. Holding an asset for the long term can mean facing market unpredictability.
Loss of asset value: Holding an asset long-term can result in a significant loss of value if its price continually declines with no prospect of recovery. This can lead to loss of profits or total loss of invested capital.
No flexibility: This strategy requires patience and a willingness to wait a long time, which means you can't quickly buy and sell to take advantage of short-term opportunities in the market.
Uncertainty about profit output: Long-term holding does not guarantee that you will make a profit when the coin you hold does not have real potential. Additionally, the cryptocurrency market is capable of very volatile fluctuations.
Loss of opportunities to invest in other assets: The "Hold to die" strategy requires patience and a willingness to wait a long time. During this time, you may miss the opportunity to invest in other assets with faster profit potential.
5. Conclusion
In this article, we learned about the term "Hold to die" and how it applies in the cryptocurrency market. “Hold to die” promotes patience and trust in investing in cryptocurrencies. It highlights that the cryptocurrency market is highly volatile and unpredictable, and that maintaining a strong mentality and a willingness to wait and see can lead to long-term profits.
However, "Hold to die" is not always suitable for everyone and can come with some risks, such as loss of asset value, lack of flexibility... It is important that each What traders need to understand is to clearly understand the risks and benefits of an investment strategy and manage their portfolio carefully.
