The most successful strategy for bitcoin investors is to “hold on for dear life,” also known as HODLing, according to Binance Research.
The price of the notoriously volatile digital asset tends to soar only during a period of several days within a year, so the best way for investors to ensure they don’t miss out is to put it in a hardware wallet and just leave it there, say analysts at the research wing of the Chinese cryptocurrency exchange.
“Not holding Bitcoin on Dec, 7 2017 means you would have missed its largest daily absolute gain of $3,608 (25%),” the research team tweeted.
When in doubt? #HODL.
Not holding #Bitcoin on Dec, 7 2017 means you would have missed its largest daily absolute gain of $3,608 (25%).
— Binance Research (@BinanceResearch) November 14, 2019
However, there is a flip side to that (bit)coin, as large downside moves can occur just as quickly.
“Not selling Bitcoin on Jan 6, 2018 means you would’ve missed its largest monthly drop of 65%. Followed by even more drops until it hit a whopping 85% drawdown. HODLing is a nice meme but not exactly a rational value preservation strategy,” Twitter user Joe007 wrote in response to the Binance post.
BTC/USD has recovered from its recent bottom and risen 130% since the beginning of the year, but it is still far lower than its all-time high of $19,900 in December 2017.
At the time of publication, BTC/USD was trading at $8,527. The leading cryptocurrency has lost about 3% of its value on a week-to-week basis, but it is still 5% higher than it was a month ago.