Bitcoin (BTC) drops on Upbit investigation news – Is HODLing still a good strategy?

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One of the first terms that a crypto newbie comes across once they get into this market is HODL. HODL simply means buying and holding crypto for the long haul. However, recent price swings might leave an investor questioning this strategy. That’s because Bitcoin (BTC) and the rest of the crypto market have been experiencing wild price swings, putting into question the whole strategy of buying and holding. For instance, today bitcoin has dropped significantly, getting to lows of $8500. That’s after all the hype that it was headed to $10k a few weeks ago.  So, is HODLing still a viable strategy?

The answer is both yes, and no. Let’s start with the Yes. If you look at bitcoin price charts since it hit the markets, you would have a very clear picture on the power of HODLing. Bitcoin literally started from at a few cents and hit highs of $20k in 2017. From such a long-term perspective, the recent drop become nothing but a slight correction, in a long-term uptrend. As crypto awareness continues to gain traction, and adoption grows, the value of bitcoin will rise. Besides, even in the current market situation where the price is highly volatile, news of big players taking an interest in bitcoin (BTC) are on the rise too, and this is good for its long-term growth.

On the flip side, there is a strong argument against HODLing at the moment.  First, there is the fact that the conditions that pushed bitcoin in the past have changed. In the last few years, bitcoin and the rest of the market were mainly pushed by euphoria.  Everyone wanted to jump in for the fast money.  Unfortunately, after the drop in January/February, when bitcoin hit lows of $5000, many people left this market. This is also complicated by the fact that bitcoin is struggling to get back to $10k.  In essence, the fact that most people who got in late last year are still in the red, means that they are afraid to get back into bitcoin and crypto ever again. This is likely to keep volumes low for some time, and this will hurt HODLers.

Recent scandals involving exchanges have not made things any better. Crypto exchange hacks in January and February drove down prices, and after several weeks in the green, things are going south again. That’s after today’s news that South Korea’s largest exchange, Upbit, is under investigation for fraud.  Such news are likely to add to the scrutiny that the crypto market gets from governments, further dampening the Hodling momentum.

In essence, current market conditions favor short-term traders over HODLERs. However, that doesn’t mean that things will not stabilize in the long-run. If you are looking to HODL bitcoin, be ready to do so for a couple of years. Things might get rocky in between, but in the long-run, you will emerge a winner. Remember bitcoin (BTC) has been under similar circumstances in the past, but it still rose to its unprecedented highs of December.

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