HODL mentions on Reddit correspond with extreme crypto volatility | finder.com

HODL mentions on Reddit correspond with extreme crypto volatility

Peter Terlato 9 April 2018 NEWS

On average, days with the largest cryptocurrency losses had the highest number of HODL comments.

A popular acronym associated with the cryptocurrency industry is HODL, meaning Hold On For Dear Life. Over the weekend, a Reddit user decided to analyze the relationship between how often the term was posted on the discussions platform and overall cryptocurrency market cap volatility. The results were surprising.

The term HODL was originally a misspelling of the world hold. The acronym skyrocketed in popularity online in 2013 and is often used to encourage cryptocurrency traders to avoid the temptation of selling coins when prices begin to fall. However, Reddit user Anthony Xie’s data revealed that this wasn’t the only use for the term.

Xie submitted a research report on the DataIsBeautiful subreddit, exposing an explosion of daily HODL mentions during late 2017 and early 2018, around the same time digital currency prices saw a rapid spike.


Chart: Anthony Xie

However, since early February, the prevalence of the term HODL among Reddit users has been steadily declining. Xie’s stats indicate that daily use of the term has reduced to one fifth (500) of its recent peak (2,800).

Analyzing the figures further, on average, the days with the largest losses had the highest number of HODL comments, which is to be expected. Surprisingly, days with substantial market gains were also associated with a higher number of HODL comments. Less volatile market swings drew lower daily average HODL mentions.

“An increased [number of] HODL mentions weren’t just associated with days with the largest losses,” Xie said in his report. “In fact, market volatility in either direction was correlated with an increase of HODL mentions.”


Chart: Anthony Xie

Despite a flurry of overwhelming online interest in December, cryptocurrency-related terms have seen a sizable drop in Google search popularity in recent months, matching steep price movements over the same period.

A recent report found that almost three quarters of Dutch crypto holders buy coins to make a long-term return.

“This group is also known as ‘hodlers’. The low investment amount and the fact that they are there for the long term is a possible explanation why few owners left during the decline,” according to the research.

You can learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of all the alternative coins on the market.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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