The Psychology of Cryptocurrency HODLing breakdown

source

When we talk about cryptocurrencies hodling we are talking of the concept of holding onto a particular cryptocurrencies for a long period of with the hope of making substantial gain over a long and extended period of time and this often require we have a measure of trust on the project that's why we will more likely believe that if we hold on to the asset that at a distant time in the future the reward will be worth it.

Hodlers are not like day traders they don't care about the movement of the market in the short term but rather invest in a project purely based on the fact the believe that's a project with good utility and good development team behind it who are actively working for the betterment of the project, they invest in the future of that asset because it's clear there is vision in that asset class and they don't bother themselves with market volatility on the short term basis as there interest spans over years, they expect the asset to do well over the years but most times people hodle for varying reasons and I will like to discuss some of the reasons why people hodle cryptocurrencies asset.

Why Do People Hodle

One of the reasons people hodle is simply out of fear, yes some might have seen millions in the cryptocurrencies space who became so due to hodling bitcoin for instance and hence the next thing they see they feel that just like bitcoin hodlers if they could also hodle this asset for long they could become millionaires, in other words fear of missing out is one of the reasons why people choose to hodle and that's wrong as it could make us end up with the wrong project with the false believe it will perform well overtime.

Also greed has also been seen to be one of the reasons people hodle, some get into a speculative asset class and risky market and make huge gains but wouldn't want to cash out out of the believe that the asset might keep appreciating in value if they leave and wouldn't want to miss out on any prospective profits so they hodle till the bitter end often until the market dumps on them and then they will sell at a cheap.

Well some who hodle actually have a good reason for doing so and it's because they believe in the prospect of that project, they have a long term vision they must have studied it's technogy and seen it's great usecase and see that in the future it has the potential of gaining mass adoption so they hold on to it with faith and believe that they will get rewarded over time, this type of investors trust in this project and and it's technogy and hence hodle till they realize their goal.

Some also hodle just because social media influencers has gotten to them in their zealous preaching about a particular asset they may succeed in convincing a large chunk of their followers into hodling an asset purely because they are doing so and they do this by sharing positive sentiment about this project making people to want to jump in as they make it attractive, "it is the next big time you can't miss out" that's often the manner they try to convince people into hodling an asset they had no interest in though sometimes they are also accurate and the project turns out to be good, the point is social media influence is behind or one of the reasons people hodle cryptocurrency asset.

Well some have very low tolerance to risk and if they were to engage in the day to day trading of cryptocurrencies they wouldn't be controlled emotionally and thus for their peace of mind and emotional level and due to their risk tolerance they choose to hodle an asset as they become more comfortable with the holding of an asset long term than on a short term basis hence this often prompt hodling and some hodle because they don't want to be wrong when they sell, they don't want it to be they sold too early when they market is still making gains, they don't want to have that regret of selling too soon hence they hodle.

Conclusion

Well it wouldn't be good if we hodle for the wrong reasons or just because we see others doing so, hodling isn't bad as some have become millionaires as a result of hodling good crypto project so it ain't bad to hodle if we can have the patience required to do and won't simply jump out in bad market conditions, then it's better we stick to short term trading. As hodlers you enter investment with a firm believe that that a particular project will perform astonishingly well if given enough time so you stick around for long so if we must hodle we should hodle for the right reasons and because we feel thats what is best for us and not because of the influence of others