Hodling Vs Trading: The Best Approach For The New Crypto Enthusiast

Cryptocurrencies have proven to be a viable asset, so persons interested in growing their finances have invested in them with the hope of making a profit. In fact, despite hurdles placed by the Central Bank of Nigeria that may have discouraged many from pursuing cryptocurrencies, Nigerians are trouping into the crypto space.

There’s no doubt that you can earn significant profits from cryptocurrencies. There are several success stories of crypto millionaires on the internet to prove that. Yet, the path to making the best profit for a crypto enthusiast or newbie might seem muddled up as they decide which is their best alternative: hodl or trade. 

As an investor with minimal experience in trading, it might become even more confusing with the amount of unsolicited  “professional advice” all over the internet. Some encourage you to hodl as it is the best alternative, while others tell you trading is your best bet. In this article, we’ll be delving deep into what crypto hodling and trading entail to help you select the best approach that works for you. 

HODL is an acronym for hold on for dear life. It is a long term investment strategy that involves buying and holding on to a crypto asset with the expectation that its price will increase over time.

Pros of Hodling

Cons of Hodling

Crypto trading is buying and selling crypto assets within short intervals to earn some profit. Crypto traders buy or sell cryptocurrencies based on their perception of when the price will go up or down. The idea is simple, buy low, sell high.

Although Hodling and trading have their merits, they also have their cons. A person who hodls has to keep in mind the market's extreme volatility and be in emotional control during a bearish market. Several people sell off their tokens during a bearish market out of fear which often incurs a loss.

Yet, although people praise trading as the better alternative to getting rich quickly, it also has its pitfalls. Success stories are shared often, but we don’t hear much about the losses. And those experts or gurus online who claim to know how to make money off crypto fast often downplay the losses. 

Indeed, traders do not have to worry much about the utility of a coin like crypto holders as they can quickly enter and exit a market, but at the same time, they could enter and get stuck in a bad trade. In fact, several people have tagged crypto trading as a gamble.  

In the end, the decision to either hodl or trade boils down to how much risk you are willing to take or expose your funds. Trading may be for you if you can tell the market apart and effectively read the market to trade your crypto coins. But if you have no experience with trading, you don’t have to be pressured into trading; you can start with hodling.

Experts recommend that an inexperienced crypto enthusiast begins with Hodling. This will allow you time to understand the market before you start trading. There is also the option to combine strategies by hodling some crypto while trading the rest.  

Regardless of your decision to either hodl or trade, here are some tips to help you in your crypto journey. 

There is no right answer to the best approach for crypto enthusiasts. Hodling and trading both have their merits and disadvantages. The best approach depends on you and the level of risk you are willing to expose your funds. If you are interested in trading, you can take a percentage of your crypto holdings and start with it. As you get more versed in the crypto space, you can increase your trading portfolio.

You can also decide to combine both investment strategies and hodl a certain percentage of both to fit your risk profile.  Regardless of the strategy you take, you must do your own research. Do not be pressured into a trade or investing in a crypto token without adequate research.

As a crypto newbie, you need to proceed cautiously. The decision to either trade or hodl is up to you, and hopefully, these will help you decide which approach is best for you. To get started on your crypto journey, you can buy bitcoin on Yellow Card, which has the best rates and the most advanced security for your crypto tokens for either you decide to hodl or trade bitcoin. 

Happy HODLing or trading!