Hold is a strategy for storing cryptocurrencies in order to further profit by increasing its price. In simple words – bought and “forgotten” until the right moment.
The hold strategy is used not only by cryptocurrency holders, but also by investors who buy stocks, bonds, gold and other financial instruments. During the period of ownership, the price can sag significantly, which is typical for many financial instruments, but in the long term, many of them give good growth.
In cryptocurrency, the risks of losing an asset in price or completely closing a project (scam) are higher, but the opportunities for earning here increase significantly. Some digital assets add 100% or more in value in a short period of time. This is typical for new coins, especially after listing on the exchange.
“Holding” cryptocurrency is quite simple. To do this, you need to purchase digital assets and hold them until the right moment. In this strategy, unlike trading, the risks of losing funds are lower.
What is FOMO and FUD
The terminology of FOMO and FUD is known to investors and traders actively working in the financial markets, but this is unfamiliar to ordinary users. FOMO (“Fear of missing out”) or missed profit syndrome refers to the fear of missing out on an event associated with high earning opportunities. This usually happens when an asset that had a small value in a short period of time has risen in price several times. Often, under the influence of FOMO, spontaneous decisions are made to enter the trend, and in the meantime, the asset begins a correction and quickly decreases in price.
FUD (Fear, uncertainty and doubt) – means fear and uncertainty in making transactions, which often also prevents active players in the market from making profitable ones. FUD is one of the techniques in marketing and advertising to increase sales and demand for services.
The “HOLD” strategy allows you to minimize the fears associated with FOMO and FUD. The volatility of the cryptocurrency market is very high and by buying an asset for a long time, you can not be distracted by frequent ups and downs.
When is it beneficial to hold
The holding strategy is beneficial for Bitcoin and altcoins included in the TOP 50. As the cryptocurrency market develops, the price of leading digital assets is growing, despite the high volatility in the market in relation to fiat currencies. This is primarily due to the increase in participants in the cryptocurrency market and its introduction into various areas.
To choose a coin for long-term holding, you need to pay attention to the following indicators:
– The usefulness of the project and what problems it solves. If the functions of a cryptocurrency solve important problems, then there is a high probability of its successful promotion and growth in price.
– “White Book” and “Roadmap” revealing the technical aspects and further plans for the development of the project. Analyze completed plans according to the roadmap.
– Team. Openness of public information about the creators and owners of the platform. Usually, in fraudulent projects, this information is carefully hidden, and the rise in the price of a coin (hype) is short-term, followed by a rebound to a minimum value or complete liquidation.
– Liquidity and trading volume. Most cryptocurrency exchanges provide reliable information about these indicators, allowing you to audit the state of supply and demand in the market.
– Collaboration with other companies, projects and government agencies. This indicator also affects the reliability and relevance of the project.
– Number of moment holders on active wallets.
This information is not always available, but some cryptocurrencies provide such information on their website or on monitoring services (CoinMarketCup, CoinGecko).