Learning the friendly way

Portfolio diversification is a strategy that involves allocating funds across a variety of different securities and assets to reduce risk and improve overall potential returns. It is recommended by financial experts because it helps to spread out the risk and prevents your portfolio from being too dependent on one particular asset.

What is diversification?

Diversification is a key strategy for managing portfolios and risks. Effective risk management involves spreading out allocations to minimise vulnerability to market changes.

The concept of diversification is simple - instead of putting all your eggs in one basket, you spread them out across multiple baskets. This way, if one allocation underperforms or experiences a loss, the impact on your overall portfolio is minimised because the other allocations can potentially offset those losses.

A diversified portfolio can consist of various types of assets, including stocks, bonds, funds, real estate, CDs, and even savings accounts. As each asset class behaves differently in different economic conditions, it offers varying levels of potential gain and loss.

While we won't cover this topic here, it's worth noting that when referred to in a business sense, diversification involves expanding product offerings or entering new markets to reduce reliance on a single revenue source and mitigate risks.

Exploring the concept of diversification in portfolio management

Diversification involves spreading allocations across various asset classes to reduce risk exposure. For instance, allocating funds to stocks, bonds, and cash equivalents simultaneously forms a diversified portfolio, or allocating funds to stocks across several countries and industries.

Diversification minimises the impact of poor performance in one asset class. In contrast to relying solely on a single asset type, diversified portfolios provide a safety net against market volatility, enhancing long-term stability.

Different types of asset options

Below we explore a number of asset options that can be utilised in a diversified portfolio:

Stocks

• Stocks tend to have the highest long-term potential returns but can also experience significant volatility in the short term.

Funds

• Funds can be diversified if they hold many different assets, but some funds may focus on a specific industry or sector.

Bonds

• Bonds offer more stable potential returns with fixed payouts but are influenced by changes in interest rates.

CDs and savings accounts

• CDs and savings accounts provide stability and steady growth based on interest rates.

Real estate

• Real estate can provide slow appreciation over time and potential income, but it also involves maintenance costs and high commissions.

By owning a mix of these assets, you can benefit from the different performance characteristics they offer. When some assets are performing well, others may not be doing as well, and vice versa. This lack of correlation between assets is what makes diversification effective in reducing risk.

The benefits of diversification

Diversification not only helps to reduce the risk of your portfolio, but it can also improve your potential returns. By spreading your allocations across different types of assets, you are more likely to have a smoother overall potential return. While one asset may be experiencing a downturn, another asset may be performing well, balancing out the overall performance of your portfolio.

It's important to note that while diversification can reduce risk, it cannot eliminate all risk. Diversification helps to reduce asset-specific risk, such as the risk associated with having too much allocation in one stock or one type of asset. However, it cannot protect you from market-specific risk, which is the risk associated with owning a particular type of asset in general.

How to build a diversified strategy

To develop a diversification strategy, you can start by creating a portfolio that includes a mix of different assets. Be sure to allocate based on your personal risk tolerance, time horizon, and financial objectives. Below are several options to consider when building a diversified portfolio.

Examples of building a diversified portfolio

Please note that this is not financial advice but merely examples of how one might diversify their portfolio.

You might explore the option of allocating funds to a widely diversified index fund, such as the S&P 500 index, which holds interests in numerous companies. Combining bonds and CDs could contribute to portfolio stability and assured potential returns. Holding cash in a savings account can offer stability and act as a financial safety net.

If you're inclined to expand beyond the fundamental approach, further diversifying your stock and bond allocations is an option. For stocks, you could contemplate allocating funds to a fund targeting emerging markets or international corporations, as these often diverge from broader index funds. Regarding bonds, varying maturity lengths in bond funds can grant access to short-term and long-term bonds.

Some financial professionals even suggest the consideration of including commodities like gold or silver to extend diversification beyond conventional assets.

Building a diversified portfolio may seem complex, but it doesn't have to be. You can utilise low-cost mutual funds or exchange-traded funds (ETFs) that offer diversification across different asset classes. Many major brokerages now offer these funds with zero commissions, making it a more accessible and cost-effective offering for those allocating funds.

If you prefer a more hands-off approach, you could contemplate allocating funds to a target-date fund or utilising a robo-advisor. Target-date funds recalibrate asset allocation according to your planned time horizon, progressively adjusting to lower-risk assets. Robo-advisors use algorithms to formulate and sustain a diversified portfolio grounded in your objectives and risk tolerance.

Risk management

Be sure to regularly review and rebalance your portfolio to ensure it aligns with your objectives. Assessing and adjusting the asset allocation helps maintain desired levels of risk and potential returns.

In conclusion

Diversification is an essential strategy for those looking to reduce risk and potentially improve returns. By spreading allocations across different assets, you can mitigate the impact of any single asset's performance on your overall portfolio.

Whether you choose to build a diversified portfolio yourself or seek assistance from a fund or robo-advisor, diversification can help you navigate varying economic conditions and work towards your financial objectives.

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The three core questions to ask yourself before investing are:

• What do you aim to achieve from each investment?
• How much money can you safely invest?
• How much risk are you prepared to take?

Establishing the answers early on will help you determine which investment avenues are best suited to your needs. For instance, investing for retirement will require a more steady and low-risk approach, while looking to make high profits will require a more high-risk approach. 

Below is a list of other factors to consider:

INFLATION

Inflation is the rate at which the value of a currency decreases. Always ensure your return on investment is higher than the inflation rate otherwise your investment will lose value over time. 

RISK

Managing risk is an important element of investing. Higher returns typically involve higher risk, ensuring that your strategies align with what you are comfortable with is a must. 

LIQUIDITY

Liquidity indicates how quickly an asset can be sold. For investments made using capital that you might require in the short term, you will want to ensure that you invest in a market that has high liquidity. For example, the Bitcoin market is highly liquid while a smaller altcoin will likely be harder to sell. 

DIVERSIFICATION

Diversifying your investments helps to manage risk and spread rewards. Similar to “don’t put all your eggs in one basket”, diversification ensures that should one coin underperform the impact is greatly reduced. Try to include a range of coins in your portfolio. 

TAX

Last but not least, ensure that you are aware of the tax implications of your investment, as tax laws vary from country to country. The responsibility lies with each individual to establish what these are and adhere to them accordingly. 

Cryptocurrencies function much like traditional currencies in that they can be transferred digitally and used to pay for goods and services around the globe. However, they also pose several benefits that fiat currencies lack, such as the fact that they operate using a decentralized network and not a bank or government agency (providing greater control to users) and can execute international payments in a fraction of the time and cost.

While many believe cryptocurrencies will eventually replace traditional currencies, there is plenty to be done before we get there. We are sooner more likely to experience cryptocurrencies working alongside traditional currencies than entirely replacing them, a movement that is generating momentum each day. 

Before we launch into what the industry needs in order to go mainstream, let's first observe how we reached this pinnacle moment in the history of finance. 

How crypto officially got on the map

Bitcoin was created to provide an independent financial system to people that were thrown into serious debt following the global financial crisis. The digital currency was created to provide individuals with the opportunity to control their funds independently from any financial institution.

Since the advent of Bitcoin in 2009, cryptocurrencies have experienced interest from many groups of people, largely outside of mainstream media. In 2017, following a wild bull run, Bitcoin was first thrust into the mainstream media spotlight as it fast became the main topic of conversation across various news channels around the world. 

Fast forward three years to the pandemic. Following global market crashes, Bitcoin displayed impressive resistance and built its wealth back more quickly than many other assets and stock markets. This caught the eye of many large corporations, dispelling scepticism and leading one in particular to move their USD reserves into Bitcoin. Following Microstrategy's decision to buy large amounts of BTC, many other large corporations followed suit, with companies like PayPal and Square even incorporating cryptocurrencies into their systems. 

This wave of institutional investment not only increased the value of the markets but also helped to build confidence for retail investors to invest in such "risky" assets. This also played a large role in major corporations embarking on serious research and development of both blockchain technology and cryptocurrencies. 

What crypto needs

Commonly used as an investment tool, cryptocurrencies were designed to facilitate faster and more economical transactions. Operating on a peer-to-peer basis, cryptocurrencies essentially cut out the middleman (and its fees) and make digital cash more readily available. 

As with most things in life, there are two significant camps for and against the mainstream use of cryptocurrencies. Those for the widespread adoption believe the spike in interest will continue on its upward trajectory, believing that very little could hinder its growth. Those against the growth argue that fluctuating market prices and uncertainty around the practical application will hinder its mainstream adoption. 

What cryptocurrencies likely need before any mainstream adoption is a well planned regulatory framework that can appease both the innovative technology and the merchants and consumers using it. Regulations are a necessary component to anything becoming mainstream, and the ones surrounding cryptocurrencies are vague at best. While many nations are working on creating and implementing these, there is still a gaping hole in the industry. 

Based on conversations taking place in the banking and fintech worlds, it is highly likely that in the coming years more traditional companies will expand to offer crypto-enabled financial services. As interest and access continue to grow, companies will need to follow suit if they wish to stay in the game. Large payment processing companies like Visa and Mastercard are already looking to provide crypto services, a key indicator as to where the market is headed.

What are the advantages of Bitcoin over existing currencies?

Bitcoin, and other cryptocurrencies, pose several advantages over fiat currencies. The biggest attribute to cryptocurrencies is that they are decentralized, meaning that they are not controlled by governments or banks, rather they are issued by the network and managed by the individual holding them. Instead of a government deciding to print more money thereby increasing inflation, cryptocurrencies are inflationary and instead created using a mining system that is controlled by various mechanisms.

Using blockchain technology, the digital cash systems provide an immutable and transparent ledger that records all the transactions and ownership, ensuring that funds are handled properly and with the correct measures. Cryptocurrencies also pose a much faster and cheaper means of sending money across borders, a huge advantage for businesses operating on a global level (i.e. sending funds from the U.S. to the United Kingdom).

The biggest advantage to crypto is that it is financially inclusive. Anyone around the world can partake in the payment system with no paperwork, previous financial statements or tedious processes required, it simply requires an internet connection.

What are the disadvantages of Bitcoin compared with existing currencies?

Currently, the disadvantages of cryptocurrencies are that they are not freely accepted around the world (yet). While the adoption levels are rising there is still a gap in how and where users can spend their cryptocurrencies. Another disadvantage is the market's volatility, posing potential inconsistencies between the price when making a payment and once the payment is received.

El Salvador leads the pack

In late 2021 El Salvador became the first country to initiate Bitcoin as a legal tender alongside the US dollar. The decision has accumulated many mixed reviews, with some hailing the president a revolutionary and others concerned he will crash the country's already fragile economy. Should his plan work out we're likely to see this happen again. 

In conclusion: Crypto is on an upward trajectory

With all things considered, cryptocurrencies and blockchain technology are here to stay. While cryptocurrencies might be a significant distance from becoming mainstream, they are far too integrated into our society and financial landscape to all but disappear. All things considered, the money is too great, the technology too innovative and the thought of financial inclusion too promising for any of it to go away. 

There is seldom a dull moment in the cryptosphere. In a matter of weeks, crypto winters can turn into bull runs, high-profile celebrities can send the price of a cryptocurrency to an all-time high and big networks can go from hero to bankruptcy. While we await the next bull run, let’s dissect some of the bigger moments of this year so far. 

In a matter of weeks, we saw two major cryptocurrencies drop significantly in value and later declare themselves bankrupt. Not only did these companies lose millions, but millions of investors lost immense amounts of money. 

As some media sources use these stories as an opportunity to spread FUD (fear, uncertainty and doubt) about the crypto industry, in this article we’ll look at what affected these particular networks. This is not the “norm” when it comes to investing in digital assets, these are cases of not doing enough thorough research. 

The Downfall of Terra

Terra is a blockchain platform that offered several cryptocurrencies (mostly stablecoins), most notably the stablecoin TerraUST (UST) and Terra (LUNA). LUNA tokens played an integral role in maintaining the price of the algorithmic stablecoins, incentivizing trading between LUNA and stablecoins should they need to increase or decrease a stablecoin's supply. 

In December 2021, following a token burn, LUNA entered the top 10 biggest cryptocurrencies by market cap trading at $75. LUNA’s success was tied to that of UST. In April, UST overtook Binance USD to become the third-largest stablecoin in the cryptocurrency market. The Anchor protocol of the Terra ecosystem, which offers returns as high as 20% APY, aided UST's rise.

In May of 2022, UST unpegged from its $1 position, sending LUNA into a tailspin losing 99.9% of its value in a matter of days. The coin’s market cap dipped from $41b to $6.6m. The demise of the platform led to $60 billion of investors’ money going down the drain. So, what went wrong?

After a large sell-off of UST in early May, the stablecoin began to depeg. This caused a further mass sell-off of the algorithmic cryptocurrency causing mass amounts of LUNA to be minted to maintain its price equilibrium. This sent LUNA's circulating supply sky-rocketing, in turn crashing the price of the once top ten coin. The circulating supply of LUNA went from around 345 million to 3.47 billion in a matter of days. 

As investors scrambled to try to liquidate their assets, the damage was already done. The Luna Foundation Guard (LFG) had been acquiring large quantities of Bitcoin as a safeguard against the UST stablecoin unpegging, however, this did not prove to help as the network's tokens had already entered what's known as a "death spiral".

The LFG and Do Kwon reported bought $3 billion worth of Bitcoin and stored it in reserves should they need to use them for an unpegging. When the time came they claimed to have sold around 80,000 BTC, causing havoc on the rest of the market. Following these actions, the Bitcoin price dipped below $30,000, and continued to do so.

After losing nearly 100% of its value, the Terra blockchain halted services and went into overdrive to try and rectify the situation. As large exchanges started delisting both coins one by one, Terra’s founder Do Kwon released a recovery plan. While this had an effect on the coin’s price, rising to $4.46, it soon ran its course sending LUNA’s price below $1 again. 

In a final attempt to rectify the situation, Do Kwon alongside co-founder Daniel Shin hard forked the Terra blockchain to create a new version, renaming the original blockchain Terra Classic. The platform then released a new coin, Luna 2.0, while the original LUNA coin was renamed LUNC. 

Reviewing the situation in hindsight, a Web3 investor and venture partner at Farmer Fund, Stuti Pandey said, “What the Luna ecosystem did was they had a very aggressive and optimistic monetary policy that pretty much worked when markets were going very well, but they had a very weak monetary policy for when we encounter bear markets.” 

Then Celsius Froze Over

In mid-June 2022, Celsius, a blockchain-based platform that specializes in crypto loans and borrowing, halted all withdrawals citing “extreme market conditions”. Following a month of turmoil, Celsius officially announced that it had filed for Chapter 11 bankruptcy in July. 

Just a year earlier, in June 2021, the platform’s native token CEL had reached its all-time high of $8.02 with a market cap of $1.9 billion. Following the platform’s upheaval, at the time of writing CEL was trading at $1.18 with a market cap of $281 million. 

According to court filings, when the platform filed for bankruptcy it was $1.2 billion in the red with $5.5 billion in liabilities, of which $4.7 billion is customer holdings. A far cry from its reign as one of the most successful DeFi (decentralized finance) platforms. What led to this demise?

Last year, the platform faced its first minor bump in the road when the US states of Texas, Alabama and New Jersey took legal action against the company for allegedly selling unregistered securities to users. 

Then, in April 2022, following pressure from regulators, Celsius also stopped providing interest-bearing accounts to non-accredited investors. While against the nature of DeFi, the company was left with little choice.  

Things then hit the fan in May of this year. The collapse of LUNA and UST caused significant damage to investor confidence across the entire cryptocurrency market. This is believed to have accelerated the start of a "crypto winter" and led to an industry-wide sell-off that produced a bank-run-style series of withdrawals by Celsius users. In bankruptcy documents, Celsius attributes its liquidity problems to the "domino effect" of LUNA's failure.

According to the company, Celsius had 1.7 million users and $11.7 billion worth of assets under management (AUM) and had made over $8 billion in loans alongside its very high APY (annual percentage yields) of 17%. 

These loans, however, came to a grinding halt when the platform froze all its clients' assets and announced a company-wide freeze on withdrawals in early June. 

Celsius released a statement stating: “Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this necessary action for the benefit of our entire community to stabilize liquidity and operations while we take steps to preserve and protect assets.”

Two weeks later the platform hired restructuring expert Alvarez & Marsal to assist with alleviating the damage caused by June’s uncertainty and the mounting liquidity issues. 

As of mid-July, after paying off several loans, Celsius filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York.

Final Thoughts

The biggest takeaway from these examples above it to always do your own research when it comes to investing in cryptocurrency or cryptocurrency platforms. Never chase “get-rich-quick” schemes, instead do your due diligence and read the fine print. If a platform is offering 20% APY, be sure to get to the bottom of how they intend to provide this. If there’s no transparency, there should be no investment. 

The cryptocurrency market has been faced with copious amounts of stressors in recent months, from the demise of these networks mentioned above (alongside others like Voyager and Three Anchor Capital) to a market-wide liquidity crunch, to the recent inflation rate increases around the globe. Not to mention the fearful anticipation of regulatory changes. 

If there’s one thing we know about cryptocurrencies it’s that the market as a whole is incredibly resilient. In recent weeks, prices of top cryptocurrencies like Bitcoin and Ethereum have slowly started to increase, causing speculation that we might finally be making our way out of the crypto winter. While this won’t be an overnight endeavour, the sentiment in the market remains hopeful. 

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Cryptocurrency forks play a significant role in the development and evolution of blockchain technology. Crypto forks occur when a blockchain network undergoes a split, resulting in the creation of two or more distinct chains, each with its own sets of rules and often its own cryptocurrencies. This division can happen through different types of cryptocurrency forks, namely hard and soft forks.

Understanding blockchain forks is an essential element for those interested in understanding and/or trading cryptocurrencies. They represent pivotal moments in the blockchain's journey, where decisions are made, new features are introduced, and disagreements are resolved. By comprehending the concept of cryptocurrency forks, investors, users, and developers can navigate the landscape of digital currencies more effectively.

Crypto forks not only provide opportunities for innovation and technological advancements but also hold implications for the broader community. They can spark debates, divide communities, and even impact the market dynamics of cryptocurrencies. 

What is a soft fork?

A soft fork is a type of cryptocurrency fork that generally introduces backward-compatible changes to the blockchain protocol. Unlike hard forks, soft forks do not require all participants to upgrade their software to continue using the network. This means that users can choose whether or not to adopt the new features or rules implemented by the soft crypto fork.

For example, a soft fork that increases transaction speed doesn’t require everyone to upgrade their software. If you don’t upgrade your software, however, you will not be able to take part in any future transactions using the new feature (ie: faster transaction speeds). 

These types of forks are a great way for new changes to be implemented without creating an entirely new cryptocurrency. Below we review two notable soft forks.

The SegWit fork

In 2017, the Bitcoin blockchain underwent a soft cryptocurrency fork known as the Segregated Witness (SegWit) Bitcoin protocol update. It aimed to address the scalability issue of the Bitcoin network by separating transactional data from signature data, allowing for more transactions to be included in each block

Before the SegWit upgrade, Bitcoin's protocol was both more expensive and slower, with transactions costing about $30 each and taking around an hour to complete. The inventors of the SegWit change recognized that signature data accounts for 65% of a transactional block. As a result, SegWit proposed moving the effective block size from 1MB to 4MB.

The motivation for this increase was to separate or delete the signer data from the transactional data on every blockchain block, allowing for greater transaction throughput per block.

With the new fork, the old Bitcoin blockchain was able to accept both new 4MB and 1MB blocks at the same time. The soft fork enabled the existing nodes to validate the new blocks via a clever engineering approach that formatted new rules without breaking existing ones.

The Byzantium and Constantinople soft forks

These were two consecutive soft forks on the Ethereum blockchain, implemented in 2017 and 2019, respectively. These forks introduced new features to the blockchain's protocol, such as improved security and privacy, as well as changes to the Ethereum Virtual Machine (EVM).

Soft forks have a relatively lower impact on the blockchain and crypto community compared to hard forks. Since they are backward-compatible, users who don't upgrade their software can still participate in the network, although they may not be able to take advantage of the new rules and features introduced by the soft fork. 

Soft forks generally aim to improve the efficiency, security, or functionality of the blockchain without causing a complete split in the network.

What is a hard fork?

Hard forks are more disruptive and result in the creation of two separate blockchains, each with its own set of rules and cryptocurrencies. A hard fork occurs when there’s a fundamental change to the blockchain, such as upgrading one of its core technical components (ie: blocksize). 

This requires everyone who uses that blockchain to upgrade their software or else they will no longer be able to participate on the network. Users can also opt to be a part of both networks that result from the blockchain split. For example, Bitcoin Gold is a hard fork of Bitcoin that aims to decentralize the mining process offering two very different use cases.

Hard forks are a common occurrence in the cryptocurrency industry, with many big cryptocurrencies being the product of a successful hard fork. Below we explore two notable hard forks. 

The Bitcoin Cash fork

The Bitcoin Cash fork is a prime example of a hard fork. In 2017, following a disagreement within the Bitcoin community about the future of the original cryptocurrency, a group of developers and miners got together to form a new and improved version of the cryptocurrency's network known as Bitcoin Cash. The Bitcoin Cash hard fork was implemented with the upgraded blockchain utilizing a new version of the underlying code, and a new cryptocurrency labeled BCH.

The most significant change to the Bitcoin Cash network was the block size increase to 8MB, allowing for faster transaction speeds, more transactions to get verified at once, and lower transaction fees. The new version of the network also increased the difficulty to ensure the security of the network would not be compromised. In March 2022, the block size limit was increased to 32MB.

There have been many Bitcoin forks over the years, with Bitcoin Cash and Litecoin being the two most well-known.

The Ethereum Classic fork

Ethereum Classic originated from a hard fork of the Ethereum blockchain in 2016. The fork occurred due to a disagreement over how to handle a security breach in the DAO (Decentralized Autonomous Organization). Ethereum Classic maintained the original blockchain, while Ethereum (ETH) continued on the new forked chain.

A hard fork can have significant implications for the blockchain and its community. They often result from divided opinions or visions within the community, leading to the creation of new cryptocurrencies. A hard fork can bring about new features, address scalability concerns, or resolve contentious issues, but it can also cause community divisions and introduce volatility into the market.

Market effects and price volatility

Crypto forks can have a significant impact on the cryptocurrency market, often leading to price volatility and market reactions. The effects are driven by a combination of factors, including investor sentiment, community support, and the perceived value of the newly forked cryptocurrencies.

1. Forks can impact cryptocurrency prices by creating uncertainty and divergent market expectations. Prior to a fork, investors may exhibit cautious behavior, leading to increased selling pressure as they seek to secure their holdings or reallocate their assets. This uncertainty stems from concerns about the viability and market reception of the forked cryptocurrencies.
2. Market reactions to major forks have been observed in various instances. For example, during the Bitcoin Cash crypto fork in 2017, the anticipation and subsequent launch of the new cryptocurrency caused a surge in trading volumes and price volatility. Similarly, when Bitcoin Cash itself underwent a contentious hard fork in 2018, resulting in the creation of Bitcoin SV, the market witnessed significant price fluctuations and increased trading activity.

These reactions reflect the market's response to the perceived value and potential utility of the forked cryptocurrencies. Investors and traders assess factors such as community support, technological enhancements, and the ability to solve existing challenges. Depending on the market's reception, prices can experience both short-term spikes and long-term shifts as market participants adjust their positions and reassess their expectations.

It's important to note that the impact of crypto forks on prices and market dynamics can vary. While some forks generate significant market buzz and trading activity, others may have a more muted effect. Factors such as the size and influence of the community, the level of support from industry players, and broader market conditions all contribute to the overall impact of a fork on cryptocurrency prices.

Navigating the market effects of crypto forks requires vigilance and a deep understanding of the underlying factors at play. Investors and traders should carefully assess the potential risks and rewards associated with forked cryptocurrencies, keeping in mind the volatility and market reactions that can accompany these transformative events.

What to do when a fork is announced

When a cryptocurrency announces an upcoming fork, a rule of thumb in the crypto space is to wait for the dust to settle before making any big decisions. Keep in mind that sometimes forks can be contentious and not everyone will agree on the path forward, meaning that there may be a lot of confusion and volatility in the coming days as people react.

 In conclusion

A hard fork is when a blockchain network is split into two resulting in two unique blockchains with their own cryptocurrencies. A soft fork is when a blockchain simply upgrades or incorporates new features and allows users to decide whether they would like to continue using the old version or upgrade their software protocol to make use of the new features.

Either way, cryptocurrency forks are a common occurrence in the blockchain space and have been the start of many different networks. The most iconic hard forks include the likes of Litecoin, a hard fork from the Bitcoin network, Ethereum Classic, a hard fork from the Ethereum network, and Bitcoin Cash, a hard fork of the Bitcoin network.

Both soft and hard forks allow innovation within the blockchain space to evolve, making space for new features, more efficient means of executing an action, and other chain improvements. A hard fork in particular can shed light on new innovations without creating a blockchain network from scratch.

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Καθώς γνωρίζεις τον κόσμο των κρυπτονομισμάτων, είναι σίγουρο ότι θα εμπλουτίσεις το λεξιλόγιό σου με νέους όρους και εκφράσεις. Ένας από τους πιο γνωστούς — και αγαπημένους — είναι το Hodl. Αν και δεν προέρχεται από τον παραδοσιακό χρηματοοικονομικό χώρο, είναι μια έννοια που έχει αφήσει το αποτύπωμά της στην κοινότητα των crypto.

Σε αυτό το άρθρο εξηγούμε τι σημαίνει HODL, πώς προέκυψε, και γιατί παραμένει τόσο σημαντικό σήμερα.

Τι σημαίνει το HODL;

To HODL αναφέρεται στη στρατηγική του να αγοράζεις ένα κρυπτονόμισμα και να το κρατάς μακροπρόθεσμα, με στόχο να επωφεληθείς από μελλοντική αύξηση της αξίας του. Πολλοί το έχουν συνδέσει με το “Hold On for Dear Life” (κρατήσου για τη ζωή σου), αλλά αυτό δεν έχει καμία σχέση με την αρχική του προέλευση.

Το HODL έχει συνδεθεί με την αντίσταση στην πώληση, ειδικά σε περιόδους πτώσης της αγοράς ή έντονης μεταβλητότητας. Πλέον αποτελεί σημείο αναφοράς για όσους πιστεύουν στην μακροπρόθεσμη αξία των crypto.

Από πού προέρχεται το HODL;

Το HODL γεννήθηκε από ένα... μεθυσμένο λάθος. Το 2013, ένας χρήστης του BitcoinTalk φόρουμ με το όνομα GameKyuubi προσπάθησε να γράψει “hold”, αλλά έγραψε “hodl”. Το μήνυμά του, γεμάτο πάθος και... ανορθογραφίες, έγινε αμέσως viral:

“WHY AM I HODLING? I’LL TELL YOU WHY... It’s because I’m a bad trader and I KNOW I’M A BAD TRADER…”

Τότε το Bitcoin είχε ανέβει από τα $130 στα $950 μέσα σε λίγους μήνες. Ο χρήστης ενθάρρυνε τους υπόλοιπους να μην πανικοβληθούν και να κρατήσουν τα νομίσματά τους. Μέσα σε λίγες ώρες, το “HODL” έγινε meme — και παραμένει μέχρι σήμερα.

HODLing ως στρατηγική

Το HODLing είναι μια τακτική που στηρίζεται στην υπομονή. Σε έναν χώρο όπως τα crypto, όπου οι τιμές ανεβοκατεβαίνουν διαρκώς, το να κρατάς τις επενδύσεις σου χωρίς να τις πουλάς πανικόβλητα μπορεί να οδηγήσει σε σημαντικά κέρδη στο μέλλον.

Πολλοί Bitcoiners — γνωστοί και ως “maximalists” — έχουν υιοθετήσει το HODL σαν τρόπο ζωής. Για αυτούς, η διακράτηση του νομίσματος δεν είναι απλώς στρατηγική, αλλά πίστη στη μακροπρόθεσμη αξία του.

Πότε είναι η κατάλληλη στιγμή να κάνεις HODL;

Ακριβώς όπως λέει και η κινέζικη παροιμία: “Η καλύτερη στιγμή για να φυτέψεις ένα δέντρο ήταν πριν από 20 χρόνια. Η δεύτερη καλύτερη στιγμή είναι τώρα.”

Το ίδιο ισχύει και για το HODL: αν πιστεύεις στη μελλοντική αξία ενός crypto, τώρα είναι πάντα η κατάλληλη στιγμή να το κρατήσεις. Δεν βασίζεται σε καθημερινές προβλέψεις ή φόβο, αλλά σε εμπιστοσύνη στο μέλλον της τεχνολογίας.

Άλλοι βασικοί όροι που πρέπει να ξέρεις

Καθώς μαθαίνεις τα crypto, υπάρχουν και άλλες εκφράσεις που σίγουρα θα συναντήσεις:

• BTFD (Buy The F**ing Dip*): Όρος που ενθαρρύνει την αγορά όταν οι τιμές πέφτουν.
• FUD (Fear, Uncertainty, Doubt): Αρνητική προπαγάνδα ή φήμες που προκαλούν φόβο και πανικό στην αγορά.
• FOMO (Fear Of Missing Out): Ο φόβος μην “χάσεις την ευκαιρία”, που οδηγεί σε αγορές υπό πίεση.
• Lambo: Όρος που δηλώνει πλούτο ("πότε θα αγοράσουμε Lamborghini;").
• To the Moon: Χρησιμοποιείται για να περιγράψει μεγάλες αυξήσεις στην τιμή.
• Whale: Άτομο ή οντότητα που κατέχει τεράστιο ποσοστό ενός κρυπτονομίσματος.

Επίλογος

Το HODL μπορεί να ξεκίνησε από ένα τυπογραφικό λάθος, αλλά εξελίχθηκε σε έναν από τους πιο αναγνωρίσιμους όρους στον χώρο των crypto. Είναι κάτι παραπάνω από στρατηγική — είναι στάση, υπομονή και πίστη στη μεγάλη εικόνα.

Και όσο συνεχίζει να υπάρχει η μεταβλητότητα, το HODL θα συνεχίσει να είναι η ήρεμη φωνή μέσα στο χάος.

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