Morgan Creek Co-Founder Says It’s Better for Most Investors to HODL Crypto

October 15, 2019 1:00 PM UTC

If you follow some of the best traders on Crypto Twitter (CT), you would think that trading with leverage is the best way to grow your crypto portfolio. After all, some of these traders post tremendous gains in short periods of time.

Active trader shows off unrealized PnL of nearly 60%. | Source: Twitter

While these traders flex their skills, they unwittingly make many of their followers think that trading is an easy game to play. Nothing could be further from the truth. As a result, a lot of retail traders lose a huge percentage of their capital trying to chase gains.

Perhaps this is one of the reasons why a crypto investment firm executive suggested that it is better if most investors couldn’t access their investment accounts for years.

Anthony Pompliano: ‘Most Investors Would Be Better Off If They Lost the Password to Their Account’

The lure of doubling or tripling their portfolio drives many retail traders to jump in on trades without managing risk. It’s no wonder that only a small percentage of traders actually make money.

Thus, it makes sense for most investors to buy cryptocurrencies or any other assets and wait for the bull market. This might take a year or two but if it happens it virtually assures them of massive gains. In addition, it will be without the stress that comes with swing trading.

Anthony Pompliano, co-founder of Morgan Creek Digital, took to Twitter to share this message to his followers. The big bitcoin enthusiast said it would be better if most investors lost their login credentials so they can’t access their account for a few years.

Pomp thinks that investors are better off forgetting about their investment accounts for a couple of years. | Source: Twitter

The strategy, better known as HODL to crypto traders, was supported by Fundstrat co-founder Thomas Lee. In a reply to Mr. Pompliano’s tweet, the investment research executive said that there’s a benefit to timelocking bitcoin.

Thomas Lee sees the value of HODLing. | Source: Twitter

Crypto Analyst: ‘Holding a Position for Years Is Theoretically Effective’

Pompliano isn’t the only one who believes that HODLing is an effective strategy to grow your bitcoin or crypto stockpile. Ricky Li, co-founder at Altonomy, says that HODLing tends to outperform quant funds in a bullish bitcoin market. On top of that, the strategy is also used by the smart money. In an interview with, Li said,

HODL is not just a retail investment strategy. Large institutions, especially crypto VC funds, possess large parts of exposure to bitcoin spot in order to capture market beta. In the case of this strategy, bitcoin mining is arguably a better approach than just spot purchasing, as mining is considered a consistent discount to spot purchases given the large capital and operational investment needed upfront.

In addition, technical analyst Tomas Salles agrees that HODL is an effective strategy. He said,

Of course, a professional trader, who knows how to get in and out at the right time, can greatly improve the return on investment. But it is not advisable for a majority of investors.

The trader added,

Large market movements are often unforeseen and concentrated over time. Being out of the market on a few of these positive days can ruin a positive year. When implementing a buy and hold strategy, it must be clear that these are very long-term strategies, as market cycles are temporarily very large.

Most Bitcoin Gains Come in the Best Ten Days of the Year

The statement of Mr. Salles about large market movements being concentrated is supported by research. Thomas Lee reported that most of bitcoin’s gains in the last six years came in the best ten days of each year.

Bitcoin may be down for most of the year but it wipes out losses in ten days. | Twitter

The report clearly affirms Pompliano’s tweet. It might be better to forget about your crypto investments for now and wait for the bull market.

This article was edited by Sam Bourgi for If you see a breach of our Code of Ethics or Rights and Duties of the Editor, or find a factual, spelling, or grammar error, please contact us and we will look at it as soon as possible.

Last modified: June 14, 2020 9:39 AM UTC

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Kiril Nikolaev @kirilnikk123

Kiril is a CFA Charterholder and financial professional with 6+ years of experience in financial writing, analysis and product ownership. He has a bachelor's degree with a specialty in finance and lives in Canada. Kiril’s current focus is on finance and cryptocurrencies. He also has his personal website, where he teaches people about the basics of investing. He owns Bitcoin, Ethereum, and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.

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