As with any type of community, the world of Bitcoin and cryptocurrencies is full of slang. It makes everything more entertaining and it acts as an inside joke for the community.
FUD and HODL are some of the first ones you’ll encounter and are arguably some of the most important slang in the space. As you go through your cryptocurrency journey, you’ll find yourself using these terms a lot—even when it comes involuntarily.
Before we get into how you can use them in the many forums and trading platforms available, let’s first go over what FUD and HODL mean.
What is HODL?
HODL is probably one of the first terms you’ll hear as a cryptocurrency trader. It was originally a typo for “hold” but has taken a new meaning in the space. Short for hold on for dear life, HODL refers to a trading strategy wherein an investor holds onto their assets—even during a time of extreme price drops.
More often than not, this is the type of strategy most beginners start with—it’s simple and easy to understand compared to others like day and swing trading. Additionally, it doesn’t require a full-time commitment. You can just buy Bitcoin safely online, store it, and intermittently check where its price is at.
Although it’s a perfectly viable strategy, it’s only the tip of the iceberg. As soon as you learn more about something like Bitcoin and realize what else it can be used for, it seems that just keeping it stored may be counterproductive to the goal of global Bitcoin adoption.
What is FUD?
FUD stands for fear, uncertainty, and doubt. Mainly, it refers to the negative mindset that some investors and traders may attempt to pass on to bring the price of a cryptocurrency down. More often than not, the negativity being spread is exaggerated to create an environment of, well, fear, uncertainty, and doubt.
FUD can come from many sources, both big and small. It could come from something as small as a cryptocurrency not hitting its price expectations to something as big as influential investors making moves against the market. People who then spread the FUD (also known as “fudders”) will exaggerate the event and try to contribute to the larger culture of fear in the hopes of inducing panic buying and/or selling.
Along your journey, it’s likely that you’ll encounter someone trying to spread the FUD—both the big and small kinds. To protect yourself from falling into the trap, here are a couple of things you can practice:
- Stay updated with cryptocurrency news
The last thing you want to do is to make financial decisions based on hearsay. Remember to keep yourself updated with what’s happening in this fast-paced space. The great thing is that there are a ton of communities, forums, and reputable websites with all the resources you’ll needAdditionally, if you ever hear something that may be a concern to your money, sit down and do research on the matter yourself. In this space, the more you know, the safer your money is.
- Remember why you got into it in the first place
Each person will have their own personal reasons for getting into the cryptocurrency space—whether it be those who believe in getting everyone included in the world of finance or those who just want to earn extra income.Before you put any money down, set these goals from the start and try to stick to them throughout your trading journey. That way, when FUD comes along, you’ll have your goal and can make decisions based on it.
- Don’t panic
As easy as it is to say, don’t let the emotions from the FUD affect you. Not many people know this but trading cryptocurrencies is an extremely emotional endeavor. The worst thing you can possibly do is let these emotions get the best of you, leading to panic selling and buying.
The important thing to remember here is that whatever the FUD says, on many occasions, is exaggerated with zero to limited truth. Whatever you do, don’t panic—take a moment to reflect on your investments, check your goals, and make calculated decisions.
FUD and HODL in the context of a bear market
Recently, we’ve been seeing bearish trends—prices dropping—in the Bitcoin market. This will inevitably create a huge amount of FUD and possibly influence people to HODL their BTC. Naturally, the question that people will begin to ask is: what is the appropriate response to a bear market?
The answer to this question really depends on the type of trader you are. With all this FUD going around, what are your goals and how does the bear market affect them? What are you actually using Bitcoin for? If you’re someone that’s looking to make extra income with Bitcoin, you may look into buying the dip (buying more while the price is low) or you may want to cut your losses and get out. Alternatively, you can just go about your life and continue to hold the Bitcoin you currently have.
The important thing we’re trying to say here is that there is no one correct way to react to a bear market. The appropriate response will totally depend on you and the way you’re using your Bitcoin. This is why we stress the importance of research—the more you know about what you want to do, the clearer your path becomes. So, if you’re still a little unsure of what to do, maybe it’s time to sit down and do your homework to see what the next step is.