Whether you should buy and hold bitcoin is a personal decision that depends on your risk tolerance, financial situation, and investment goals. As of late 2025 and early 2026, Bitcoin has demonstrated significant long-term growth, with a 5-year gain of over 200%, but it is also highly volatile and carries risks of significant short-term losses.
Fun fact: the verb “hodl” (Wiktionary entry) is used in the bitcoin community to refer to buying and holding bitcoin.
Here is a breakdown of some factors to consider for a buy-and-hold (“hodl”) strategy.
The bull case (why you should consider holding):
- Long-term performance: Despite severe downturns (e.g., 2018, 2022), bitcoin has historically rewarded patient investors over long periods.
- Digital gold/inflation hedge: Some investors view bitcoin as a “store of value” and a potential hedge against currency devaluation, similar to gold.
- Institutional adoption: The regulatory approval of spot bitcoin ETFs (exchange-traded funds) and increased interest from institutional investors has provided more stability and legitimacy to the asset.
- Fixed supply: Bitcoin has a hard-capped supply of 21 million coins, which, unlike fiat currency, cannot get diluted through printing of more currency.
The bear case (risks to consider):
- High volatility: Bitcoin is known for extreme price swings, which can result in significant losses if you need to sell during a downturn.
- Speculative nature: Bitcoin does not produce cash flow or dividends, meaning returns depend entirely on the prospect of selling at some future time at a higher price.
- Regulatory uncertainty: The regulatory environment for cryptocurrencies is still evolving, and future government regulations could affect its value.
- Security risks: If you self-custody, losing your keys (your seed phrase) means losing your bitcoin forever. If you store it on an exchange, you face counterparty risk (the risk of the exchange failing), and the risk of the exchange getting hacked and the bitcoin being stolen.
Recommended strategies:
- Dollar-Cost Averaging (DCA, Wikipedia article): Rather than buying a large amount of bitcoin at once, consider buying smaller amounts at regular intervals to reduce the impact of volatility.
- Long-term horizon: Some people recommend a minimum four-year holding period, prompted by the “halving cycles” of bitcoin (article in The Guardian). Another way to say this is that if one’s risk tolerance, financial situation, and investment goals are such that one is not comfortable with holding periods measured in many years, then perhaps one ought to hold little or no bitcoin.
- Limited allocation: Financial planners suggest limiting your investment in any particular type of asset to no more than 1% to 10% of your total portfolio, particularly for speculative assets like cryptocurrencies.
- Secure storage: For long-term holding, using a “cold wallet” (an offline storage device) is generally considered more secure than leaving assets on a trading exchange.
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