What determines the price movement of cryptocurrencies?

It is still unknown whether the price of Bitcoin will repeat the success of last year and whether it will grow at all. However, people seem to be realizing that the cryptocurrency market is not going away that easily.

Despite this, there are still many supporters of the idea of ​​a single gold standard and various Nobel laureates who think otherwise. 

With the creation of a new class of assets, a problem arises - assessing their fundamental underlying value. Over the past few years, many theories and speculations have arisen about how to value Bitcoin and other cryptocurrencies, and those who dare to make predictions based on a traditional value report usually end up looking pale.

Of course, there is a theory that has been around for many years that is often overlooked. The theory is that long-term holders of crypto assets have the greatest influence on the digital currency market and that the convenience of transactions is not that important. This theory was published in a 2014 paper, although no empirical evidence was provided. The main idea of ​​the article is that the price of Bitcoin in US dollars or any other currency is determined by nothing more than the desire of the holder to withdraw or not withdraw funds. To better understand this theory, let's try to look into the mind of a Hodler.

What is a Hodler?



Hodler (from the English. Holder - holder, Hodler - typo) - ma'am, who arose in 2013 on the forum Bitcointalk.org, when the price of Bitcoin was falling due to tightening laws in China and user GameKyuubi posted a drunk post about his disappointment in not selling Bitcoin before the price crashed. This post quickly gained popularity and turned into an anthem for people who will hold Bitcoin until the end and will not sell it, no matter what the market conditions.

 The HODLers will remain, they will not go anywhere. They are the ones who don't sell their assets even if the price drops 25% down in one day or 50% in a month. In fact, at such times they prefer to make purchases.

 Hodlers really believe in Bitcoin. Some of them are because of political beliefs (they want cryptocurrency to dominate the world, not fiat), others are simply confident that Bitcoin can become a widely used medium of exchange in the future. In short, hodlers walk because they believe that Bitcoin is the digital equivalent of gold. 

Hodlers are the foundation of Bitcoin price.. True holders will never sell a crypto asset, they patiently wait for the moment when they don’t need to, when they don’t have to exchange Bitcoin for a dollar to buy something for themselves.

 Of course, the study released by LendEdu said that the average holder would sell Bitcoin at a price of $200,000 per piece, but this is what distinguishes a holder from a HODLER.

Every short-term sharp increase in the price of Bitcoin is attracting more and more people's attention, some of whom may well become hodlers. And instead of connecting data dots and copying other traders' strategies, it might be worth taking the advice of a drunken hodler from 2013.

According to https://www.forbes.com