To HODL or Not to HODL

If you believe Bitcoin is the apex asset in the world, why would you ever sell it? 

Why wouldn’t you HODL it forever? 

Why wouldn’t you HODL it until fiat currencies fail, hyperinflation occurs, and the world has to adopt the Bitcoin Standard to bring order back to world economies? 

The Bitcoin maxi ideology encourages HODLing, an act where you hold your Bitcoin no matter what. When it increases in price, you buy more. When it dips, you buy more. You buy to HODL. 

To people who don’t know the origin of HODL, I am in fact not misspelling “Hold,” although HODL means the same thing, just with a cultural significance to Bitcoiners. 

It comes from a now famous post on Bitcoin forum titled “I AM HODLING.” The title was accidentally misspelled but the message was received, he was holding his Bitcoin no matter the price volatility. Since then, the term “HODL,” and the practice of HODLing Bitcoin have been widely adopted and encouraged. 

Michael Saylor recently referred to people who would sell Bitcoin to store value in fiat currency as “poor” and he compared Bitcoin to prime real estate. He emphasized you would never sell prime real estate in Manhattan, you would borrow against it and hold it for generations as it accumulates value—the same should be done with Bitcoin.

This is the HODL mindset. Disregard the volatility, decrease your time horizons, think in decades or generations, stack Bitcoin, and ultimately HODL. 

Answering the above questions for why you wouldn’t HODL Bitcoin for infinitum has less to do with your belief in Bitcoin and more with the circumstances in your life. 

Contrary to many beliefs, and sometimes my own, there is life outside of Bitcoin. There is more than waiting to see when the entire world will adopt Bitcoin. There is more than stacking Sats and waiting for “number go up.”

Life happens. 

People are allowed to have conviction in Bitcoin as an asset class and still sell. 

If you have held Bitcoin and seen it appreciate you can sell to pay off your mortgage. 

You can sell to buy an engagement ring. 

You can sell to pay your child’s medical bills. 

You can sell to take your wife on the vacation of her dreams. 

You can sell to pay off your debt, put your child through college, or pay for anything you desire. 

You can sell to live your life in the way you want to. 

Everyone has the freedom of choice and selling to enjoy your life or make your life easier should not be frowned upon. Not everyone has the luxury or ability to wait decades to realize any returns on their investments. The investment in Bitcoin can, and should be, used to progress your life forward. 

If you believe in and understand Bitcoin I struggle to accept that anyone would logically hold Bitcoin for the short-term and completely exit their position for a modest return. Exiting Bitcoin completely means you lack conviction and belief in it over the long run. This isn’t to say you can’t sell, I believe Bitcoin is a path to live the life you want to live, and with this belief comes the necessity to sell some of your Bitcoin. My argument states that if you willingly sell your entire Bitcoin position, you undoubtedly lack conviction and probably lack understanding. That being said, the choice to sell is an individual choice and no one should be judged for this decision. 

Choosing to sell will bring about inherent conversations of “what if I held.” These conversations are most difficult if you completely exit your position and Bitcoin proceeds to trend toward a valuation of infinity. The smart path to avoid this potential decision would be to not sell all of your Bitcoin. If you believe in Bitcoin as the apex asset you will probably sell everything else before you sell Bitcoin. You will also probably not sell ALL of your Bitcoin unless your life circumstances absolutely require you to. But by selling, you will deal with the opportunity cost of HODLing, that is the nature of all investments.

If you choose to sell or are debating to sell, you need to have a strategy. People who held Apple or Microsoft stock since the 1990s have won. These companies won and exponentially expanded over the following years. Bitcoin is 15-years old. Imagine what Bitcoin will be worth in another decade or two given its current projection. If you physically can live your life the way you want without selling, HODLing may be the option regardless of the outcome of this current four-year cycle. You may want to have your time horizon be a decade or multiple years down the line. You also don’t need to worry about trading your Bitcoin. You can HODL and continue to buy more with your focus being years down the line. With this mindset, selling isn’t an option and you are okay with your plan

If you opt to increase your time preference and sell, follow a plan. Take the emotion out of the decision. Emotions and investments do not lead to a happy marriage. Set a price target and a percentage of how much you will sell. Use ladders to increase your returns and decrease your risk from following through with your plan. Sell X percentage of your Bitcoin at X price, then sell X percentage at X price. After you sell, know what you are going to do with your money. If you are going to hold it in cash, it may be worth reevaluating your decision and opting to keep the money in the market. If you have a huge purchase upcoming or debt you need to pay off, know when to sell and get those payments covered. Having a plan with your decision to sell makes the decision much easier. 

Your investment in Bitcoin is ultimately an investment in living a better life. If you believe Bitcoin is the apex asset in the world and can afford to HODL for years, that may be your best option. If you choose to take profits because life circumstances dictate you do or because you willingly choose to, that is okay! It is your choice to live the life you want to live. You don’t want to be stuck in a situation where you wish you sold or in a situation where you wish you held. Make a plan, execute the plan, and live with your decision. 

Your belief in Bitcoin shouldn’t prevent you from living the life you want to live. Your belief and investment in Bitcoin should help provide you with the life you want. 

Know the difference between these two. 

Formulate a plan with your Bitcoin.

And live life to the fullest. 

Stack SATs.

The views and opinions expressed here are for entertainment purposes only and should, in no way, be interpreted as financial or investment advice. Always conduct your own research when making an investment or trading decision, as each such move involves risk. The team members behind Triana are not financial advisors and do not claim to be qualified to convey information or advice that a registered financial advisor would convey to clients as guidance. Nothing contained in this e-mail/article constitutes, or shall be construed as, an offering of financial instruments, investment advice, or recommendations of an investment strategy. If you are seeking financial advice, find a professional who is right for you.