If you can’t HODL you won’t be rich ~CZ.
The HODL meme is now more than just a meme. It’s a solid cryptocurrency investment strategy that’s been proven to be efficient.
HODL means to hold a particular cryptocurrency for the long term, regardless of the short-term volatility.
Most crypto millionaires or billionaires made their money from holding the right coins for a very long time (1 to 10 years or more).
Therefore, you’re always advised to learn to HODL and not sell too soon for a small profit in a pump, or worse, at a loss out of fear during a dump.
But this is easier said than done as our emotions often get in the way.
That’s why I want to share with you how to set yourself up to follow through with the HODL strategy, in this article.
4 ways you can force yourself to HODL like a boss
Here are the simple tricks you can use on yourself to reduce impulsive selling and build a strong HODL gut.
The tricks are presented from the simplest to the hardest or more forceful HODL strategy.
- Remove the gas fee coin from your wallet
- Use a multi-sig wallet
- Fixed-term staking
- Delete your 2FA key and App
1. Remove gas tokens from your wallet
Some blockchain networks require you to pay for transactions or gas fees using their native coin.
For example, to transfer or trade any token on Ethereum, you require ETH to pay for gas fees. And if you don’t have ETH in your wallet, you’ll not be able to do anything on the chain.
The goal here is to make sure you don’t have the coin required to pay for gas fees in your wallet. This will make it impossible for you to trade or make transfers impulsively.
Even if you’re a chronic ‘paper hand’, the process of looking for and transferring the coin you need to pay for the gas fee into the wallet will give you time to cool down and think it through.
This trick will not make it impossible for you to sell, but it will delay your impulsiveness and give you time to consider the move you’re about to make.
Personally, I have some tokens lying in my wallets that I haven’t moved for over a year because there’s no ETH in the wallet to pay for gas fees.
The inconvenience of buying ETH and sending it there in addition to the fees makes me think twice and reminds me that I don’t really want to sell or move those tokens.
2. Use a multi-signature wallet
Multi-signature (multi-sig) wallets require 2 or more signatories or private keys to authorise a transaction.
The goal here is to store your crypto in a multi-sig wallet that’s controlled by you and your spouse, parent, siblings, or anyone else in your family or group of friends that you absolutely trust.
Everyone with a key to the wallet understands the pre-established rules, conditions and exceptions to be met before authorising a transaction.
This puts a lot of inconveniences and delays in your way when trying to move the assets that it’s impossible to act impulsively.
First, you need to reach out to the co-signers, then convince them that the transaction meets the established requirements, and get the required number of signatures required to authorise it.
The higher the number of signatories and the more signatures required to authorise a transaction, the more difficult it is for you to sell impulsively.
Thus putting a perfect check on your paper hand, and limiting the influence of FUD (fear, uncertainty and doubt) or FOMO (fear of missing out) on your investment decisions.
This works for any kind of crypto. Whether it’s independent coins like Bitcoin and Ethereum or tokens on any chain.
3. Fixed term staking
Fixed term staking is another HODL strategy I use a lot. It requires locking up your crypto assets for a specified period (days, weeks, months, or even years).
You will not be able to withdraw the coin or token before the specified date.
However, some platforms offering fixed staking allow premature withdrawals with a very high fee which is intended to discourage the act.
But some don’t even give you that option of early withdrawal at all. So, they make your hands stronger, because even if you want to, you can’t sell.
Why I like this strategy is that, while you’re HODLing and waiting for the price of the token to increase over time, you’re also earning passive income through the staking rewards.
4. Delete your 2FA key and App
This one is for those that are holding their crypto assets on a centralised platform for whatever reason such as trading, staking, farming, lending, etc.
This article is NOT about how risky holding your asset on centralised platforms is, I know you know the risks, don’t you?
This is about making it very hard for you to sell or withdraw the assets, especially when your original plan is to keep them there for a very long time.
At the same time, you’re growing your stack of tokens or coins as they work to earn you rewards.
All you have to do is activate 2FA authentication for your account and delete the authenticator key and app from your devices.
This ensures that even if you want to withdraw your assets, you can’t because you don’t have the 2FA code or keys to authorise a withdrawal.
To gain access or reset your 2FA, you’ll have to contact customer service and follow some inconvenient and time-consuming processes which hopefully makes you rethink the withdrawal.
The risks of forced HODL
When you force yourself to HODL using any of the methods discussed above, you lose the ability to:
- exit the market during a crisis (like the LUNA crash).
- take advantage of a massive irrational pump.
- react to any important event that affects your investment or changes the fundamentals of the project.
- effectively manage life’s financial or liquidity emergencies.
So, take these into consideration before executing a forced-HODL strategy on yourself.
Goodbye to the paper hand, all hail the diamond hand.
But, note that these are extreme ways to force yourself to HODL the crypto assets you plan to keep for a very long time.
Do not try these with assets you know you’ll need in the short to medium term.
Furthermore, you have to be extremely selective with the coins or tokens you force yourself to HODL as it’s not every token that will survive the next few months or years.
Only do this with tokens that have solid fundamentals and you have confidence in their future potential.
What other strategies do you use to force yourself to HODL your favourite crypto assets? Join the discussion in our Telegram community.