Now, anyone who is big on cryptocurrencies already knows that Anthony Pompliano is one of the biggest names in the crypto space and whatever he says is law. A such, he recently took to twitter to talk about HODL or keeping digital assets for a long period until such assets appreciate as the best investment strategy. The fact that he is the co-founder of Morgan Creek which is one of the premier Blockchain Venture capital partners in the world gives him credence as one of the “go-to” people when it comes to cryptocurrency expertise.
Most investors would be better off if they lost the password to their account and couldn’t log in for a few years.
— Pomp ? (@APompliano) October 13, 2019
In a similar vein, Thomas Lee who is the co-founder of Fundstrat in response to Pompliano’s tweet concurred about the benefits of timelocking digital assets.
Yes. Timelocking bitcoin would let people benefit from the compound benefit of network value growth.
— Thomas Lee (@fundstrat) October 13, 2019
Similarly, Ricky Li, who is the Co-founder and head of Altonomy also lent his voice to the issue in an interview with CCN, Li said:
“HODL is not just a retail investment strategy. Large institutions, especially crypto VC funds, possess large parts of exposure to bitcoin spot to capture market beta. In the case of this strategy, bitcoin mining is arguably a better approach than just spot purchasing, as mining is considered a consistent discount to spot purchases given the large capital and operational investment needed upfront”.
Similarly, Tomas Salles who is a veteran trader also indicated the same thing, said:
“Of course, a professional trader, who knows how to get in and out at the right time, can greatly improve the return on investment. But it is not advisable for a majority of investors”.
“Large market movements are often unforeseen and concentrated over time. Being out of the market on a few of these positive days can ruin a positive year. When implementing a buy and hold strategy, it must be clear that these are very long-term strategies, as market cycles are temporarily very large”, said he.
HODL Makes Sense for Everyone
Whatever the asset class is, holding the asset down until value appreciation occurs is a very effective strategy. From real estate to shares and other exotic assets and instruments, holding out for the long term allows the investor to escape the market noise and distortions of the short-term market trends and moves.
This can be seen in the case of the largest cryptocurrency by market value Bitcoin. Bitcoin was about 6 cents for more than three years from the implementation of the blockchain until it took off around 2012. This then goes to show that maximum exponential gains can be made by simply just walking away from cryptocurrency assets until the asset prices take off.
So while the superstar traders may still want to wow people with their prowess and through profits made from the highly technical analysis and complicated methods of market assessment, the best strategy was and remains to HODL.
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