For those who are completely new to the crypto world, investing might be a better option than trading cryptocurrencies. However, each method has its pitfalls and perks. Here in this article, we will discuss two main methods of making money with bitcoin: trading and HODLing. We will discuss the strategies used in both, their perks and pitfalls, and provide some Bitcoin investment strategy tips to help you navigate the process. We’ll also explore what crypto experts have to say about both methods.

What does HODL mean?

HODL is a misspelling of “hold” and stands for “Holding on For Dear Life.” HODLing Bitcoin means investing long-term through its ups and downs. Crypto experts recommend this method as it can offer the best returns compared to other assets. Investors HODL Bitcoin, hoping its price will rise and provide higher returns in the future.

What does trading mean?

Trading cryptocurrencies means buying crypto coins like bitcoins and waiting for only a short period for their price to increase and earn small profits. Traders tend to open positions even for few hours, and if there are price movements that provide you good returns, they close the trend once price movement is done. It can also result in the decreased price of cryptocurrency and avoid loss of money, and traders set profit and loss limit that helps you save your money. If you want to trade cryptocurrencies, you should  check whether bitcoin can replace dollar or not in near furure.

New investors opt for one of two things: buying and holding cryptocurrency or trading cryptocurrency. From these two methods, HODLing is considered a better strategy for inexperienced traders. But both trading and HODLing involve different risks and strategies. Therefore, it is important for new traders to execute trade properly to avoid risks or any dangerous situation. To make the most of your investment, consider these Bitcoin investment strategy tips to navigate both trading and HODLing with confidence.

The two main problems that arise here are:

• Not all traders are great at implementing the right strategies, especially when it comes to trade in such a volatile market as a crypto market.
• HODLers are apt to HODL bitcoin to top and then get down again, which means they don’t aim to make high profits.

So what should traders do? Well, the right answer to this question is that traders should HODL bitcoin with the right exit plan or trade bitcoin by learning the right strategies and implementing a risk management plan that most experienced traders and investors approve of. In simple words, using the right strategies can make your journey easy and successful. Let us now explore the perks and pitfalls of both HODLing and Trading.

Perks and Pitfalls of HODL

Buying and HODLing bitcoin is an easy process. Traders can buy coins and store them in the wallet, and you have to do nothing. Patience is required in HODL as it will pay off one day. The main benefit of HODL bitcoins is that you don’t have to pay taxes until traders cash out their funds. Talking about the pitfalls of HODL, investors mostly get into the crypto world when the market is at its peak because of the excitement. Secondly, when it comes to taking profits, HODLers don’t have enough experience or knowledge as they only HODL and don’t know the updates of the market. HODLers often condition themselves to just HODL bitcoin or other cryptocurrencies.

Perks and Pitfalls of HODL

The cryptocurrency market is volatile, but crypto trading can yield significant gains. Traders have opportunities for both profits and losses. If you’re experienced, you can maximize gains and outperform HODLers. However, trading requires a deep understanding of the market. Traders must master fundamental and technical analysis. Without this knowledge, losses are more likely.

Additionally, there are many pitfalls and traps in the crypto market, and traders need to be highly careful. The inexperienced traders often face portfolio erosion because of trading out bitcoins that aren’t doing great in the market.