Some say hodlers are crypto-royalty, peering out from their stone castles at the peasant people flashing dead dollars below.
While the kings and queens of crypto throw more coins into their vault at market dips, the people they hoard over panic in frantic bids to beat the next day trader on the alt-coin market.
When all of us are checking our Coinbase Pro and Kraken apps to see when the market bottoms out on our favorite coin, our royal overlords are busy buying the dip behind our backs. How did they get to be so confident?
What lessons can we learn from hodlers?
One good idea is to look at what coins they hold. When people stake an investment, it means they see value in it for the long-term, no matter the market ups and downs. Part of the value of coins like Algo come from their utility. They aren't just memes coins, or fly-by-night inventions that hope to pump and run.
Coins like ATOM and Algo have real-world utility, whether from offering infrastructures to decentralized finance to tokenizing stablecoins like USDC, to simply allowing staking by hodling.
In other words, hodling is more than a meme
When Bitcoin hit a dip earlier this year in February 2021, Algo followed suit along with the entire crypto market. The market still hasn't recovered to that high of mid February. As of today Algo has shaved a decent ~45% of its value. It seems to have caught a floor and stabilized at a dollar and some change ($1.07 at writing).
The market still hasn't recovered
Yet the reaction to investors during this dip spoke volumes to the values behind the coins they held. During the dip, meme coins have seen their fans in earnest calling for the likes of Elon Musk to rescue their coin. Elon ended up buying into the meme, pumping Doge as a joke.
In contrast, Algo hodlers are not pumping the coin itself as some arbitrary fixation, but they are referencing the coin's utility and promise. You'll find Algorand investors talking on Twitter, Facebook, or Reddit about the investments and projects behind Algo during the dip. You can see social media posts live, in real-time, right here on The Algo Post: check it out. As a sample, many on social media are buying Algo during the dip:
So what's the purpose in buying the dip?
Buying the dip affects your DCA, or dollar cost average. That is the average cost per share that you paid for your investment. Over time, it's normal that you might buy shares at one price, then more at another. In this way your "average" dollar cost changes depending on how much you buy and at what particular price.
By buying during a market dip, you lower your average cost to purchase any particular coin. Many investors believe this can increase the likelihood of return on investment (provided you believe in the investment enough to buy in this way).
So to sum up, you can find where people see value in the market, by the way people respond to dips in the market. Believers in a particular technology often point to projects and plans to bolster their hodling, while others buy the dip to reduce their DCA in hopes of long-term pay offs. If you see people clamoring on social media to buy, or for billionaires to step in and sell a meme, you probably know it's not the greatest investment.
— The Algo Post
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