6 min read
In the crypto world there are dozens of terms (most in English) that try to explain different situations or movements. If you do not know English, we understand you and that is why we are going to explain to you: what is hold?
If you have seen the program game of thrones you will know the phrase “Hold”, and this will remind you of the character Hodor holding a door, but if you have not seen it then here we will explain the meaning of “Hold” in the field of crypts, but this style of hold is not made with hands or arms nor will you have to hold one tongue.
The term HOLD (or hold) originated in 2013 with a post to the bitcointalk forum. The price of bitcoin had surged from under $15 in January 2013 to a high of over $1,100 at the beginning of December 2013
Holding into the crypto environment means keeping the possession of one or more cryptos for a long period of time without selling them. This is the most popular strategy used in the crypto market since most users do not have the necessary knowledge or desire to trade cryptos, that is, buy and sell cryptos waiting for the price to rise or fall.
When a user decides that it is time to invest in a currency for the long term, he believes in this project and thinks that in the future it may be more valuable than it is now. Doing this by investing in crypts known as bitcoin, with data we have seen from previous years leaves a very good profit as year after year the price of bitcoin goes up.
Doing this can be more profitable than doing short term transactions. When making short term transactions we evaluate our investments more, doing this requires constant attention in how the market fluctuates, because if it does not attract attention to do this is better you can do is hold one peace and keep it for at least a year so maintain one position is better for users who do not have much time to invest to investigate how a crypt currency fluctuates.
Because if you do a lot of transactions each of these has a fee that is charged that reduces any profit made. However, there is a special treatment for long term profits.
But for this treatment to take effect you must keep your coins for at least one year and by doing so the commission will be much lower. Short-term gains are generally taxed at regular income tax rates. Small amounts of capital gains may even be tax-free depending on your regular income.
Reduced tax rate thanks to long-term capital gains.
Forces you to research projects thoroughly.
Less paperwork involved for income reporting.
you may not earn as much
Harder to make daily gains or income
Holding vs trading
Although both strategies have the same objective of generating profits, we can see that each one has its own characteristics.
To be a holder you don’t need much knowledge, just buy cryptos at the best possible price and keep them in a safe place. On the other hand, to be a trader you have to train, study the market and develop strategies based on future data and estimations.
since when buying and selling cryptos there is also the risk of ending up losing. This does not mean that knowledge is not required to hold, since the holder must investigate in which projects he is going to invest in the long term, taking into account which are the work teams, what is the solution proposed for the future etc.
Now that you are clear about what “hold” is, you can say that you already know the simplest and least risky strategy, but that it has still provided many benefits to those who have chosen to follow it. Sometimes, even above those who have spent years dedicated to analyzing the markets to try to determine the right time to buy and sell cryptos in Spain and the rest of the planet.
So which cryptos trading strategy is best
The best thing is what adapts the style of trade that interests you most, it is even a good idea to apply both strategies. Since practice makes perfect, you should only try one of the two and depending on how you feel with this method you can choose.
If you have a lot of cryptos of a particular type in a long-term holding, then flipping them may help increase their portfolio. Many investors will actually trade a portion of their long holds on price swings to up the size of their bags.
This practice is useful for cryptos that trade and are priced between 1 to 5 cents. It is very common for these coins to go up and down a penny over the course of the day, leaving gains for users who know how to take advantage of this.
The best strategy is to diversify to mitigate your risk. If this is done properly, long term investments as well as short term investments can be good options, by making a combination between these two you can open many possibilities that allow traders with large amounts of cryptos to decide what happens with the market and reduce the risk of a short term investment.
No matter which method you choose you should always consult about this currency to verify all the information you find by yourself and if you decide to invest and you can consult with an investment advisor so he can explain you more about the world of investments