SOURCE: http://alaskarobotics.com/2009/12/01/whale-vs-squid/
Transparency Note: I am paid to work on the adoption of PIVX. I do not write on Steemit for that purpose, but obviously it affects my views. This article was inspired by the drama associated with Fish ceasing his support of CHC (ChainCoin) and joining with PIVX. I will not be defending or condemning his actions. I am just inspired to write about the HODL Movement.
For those who don't know, the HODL Movement has grown out of the CHC (ChainCoin) community. They sought and still do seek to raise the value of CHC through HODLing which is a cute/fun way of saying holding. The idea is that they band together and combine their power to be a force strong enough to compete with the whales. (wealthy and powerful investors) They do this because whales frequently dump valuable coins to turn a profit, but it harms the coin. The CHC community decided they would band together and fight off the whales and for awhile they did. We'll get into my perspective on what went wrong shortly, I'd like to share my own HODL experience first.
I never was a part of the CHC HODL as, at the time I only traded on Bittrex where CHC isn't listed. I did hear word of a pump on SYNX through the PIVX trade channel which I tuned into on the SYNX Slack. It turns out the SYNX community was attempting a HODL of their own. I took my day trading fund, a meager $100ish sum (CAD) and bought SYNX. I had no intention of HODLing, but I wanted to make a buck off the exchange. Watching these people go at it with calls for reinforcing the 20k buy wall and the text chants to stay the course and HODL was exhilarating. I had a great deal of fun watching that go on for several hours. In the end I sold a decent bit too early and made 60% instead of a possible 80-90%. In a state of FOMO (fear of missing out) I bought back in for a bit and ended up loosing some money. By the end of the day I made about 40% profit. It was exciting and fun, but not really what HODLing is about.
Now, some of you may be cursing damn day traders like me for being part of the problem and selling to make a buck when we should all HODL. What does HODLing do though, who does it help, how does it make the coin better? If your answer for that question is "the value of the coin skyrockets" or "everyone gets to make a lot of money!" Than you are no different than any day trader or the whales. What the HODL did was create a many tentacled giant squid like creature that could fight the whales. This creature, though, was a beast in itself. It drove the price up and when it came time, it dumped to make a profit. There is no difference between the squid and the whale. The problem with the HODL is that most people will lose the will to hold when the price tag starts getting exceptionally tempting. You can't even blame people for wanting to cash out on a 100, 200, 500, 1000% increase in their finances. What makes the HODL dangerous is that it completely sucker punches some people. Some people get greedy and hold for higher and higher returns, I feel bad for these people when things go sour, but they kind of bring it on themselves. The people I truly feel for however, are those that truly believe in the HODL. They hold and hold regardless of the circumstances. These people have taken massive losses in the inevitable decline of their coins.
The mistake is thinking that HODLing is any different from pumping. If you end up believing that, you will get burned badly. There is no shortcut to making a coin "great." You have to work at it and build the coin naturally, you can't just will it into greatness. Your coin must always be working towards upgrading itself, that is how it attains greatness. If it isn't working on scalability, adoption, ease of use, etc than any growth it gains is nothing more than speculation. I sincerely hope CHC bounces back and I think it can. It has an absolutely dedicated base of supporters who can will that thing forward into greatness if they knuckle down. If that happens, those holding it at a loss will find themselves in great profits eventually.
This is all just my opinion and I am no psychic. I can't say for sure the future of any currency, so invest at your own risk. I do recommend not putting all your eggs in one basket however. Research the backbone of a few coins and pick your favorites. Pick things you can support. Look at Steemit, it supports opinionated windbags like me, I LOVE IT! It has my support, I hope it does well.
Thank you for reading, until next time!