Market Analysis

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For those of you unfamiliar with the HODL meme, it’s an intentional misspelling of the word “Hold” that is commonly repeated during turbulent periods in the cryptocurrency market.

Where the HODL meme was born

Over time, HODL has become synonymous with investors abating fear, and not selling in times of market despair.

Anecdotally, I’ve noticed a flood of of HODL mentions in the past year. So I decided to analyze every Reddit comment mentioning “HODL” to examine the relationship of HODL vs. the total value of the cryptocurrency market over time (market capitalization).

Here’s what I found:

HODL Mentions Over Time

Late 2017 — early 2018 was an explosive time for HODL.

The HODL meme spiked in popularity in December and January. This corresponded to some very large market losses in the cryptocurrency market.

Originally I thought that if I overlaid the price movement of BTC, a negative price movement would match up perfectly with an increased # of HODL mentions.

I was wrong. It wasn’t just market losses that increased #HODL mentions.

Market Volatility

Market volatility increases the number of HODL comments.

Both the days with the biggest market losses, along with the days with the biggest market gains saw a higher # of HODL comments on average.

By grouping daily market performance into bins and calculating the average # of daily HODL mentions for each bin, we see the two camel humps of a bimodal distribution form.

The two humps on each side matching both large positive and negative market movements saw much higher # of HODL mentions than the flat, neutral performance area.

The left hump was taller than the right, meaning that on average:

# HODL on losses > # HODL on gains

HODL fatigue in recent months

After February, the # of HODL comments has significantly diminished despite sustained market volatility.

Is HODL a dying meme? Or are investors’ spirits low after a tumultuous bear market in the last few months and simply cannot muster the energy to rally behind HODL as they did before?

When I posted this data on Reddit, it seemed that many who had loved the meme now had nothing but scorn for it.

How can a sane person care so much about HODL?

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For the coders that want to see how I fetched Reddit data, continue reading…

The Code

After looking around, I found the best way to retrieve Reddit data was from PushShift API. A huge shoutout to PushShift. The person behind this is no less than an internet hero. He has committed to preserving, protecting, and making terabytes of Reddit data available for free. You can support him by donating.

Comment Schema

400: Invalid request

API calls & DB Insertion

400: Invalid request

Counting # HODLs per Day

400: Invalid request

Historical Cryptocurrency Market Capitalization Data

https://github.com/dylankilkenny/CoinMarketCap-Historical-Prices

Clone this and run crypto_history.py for the time period you want to fetch historical cryptocurrency market cap data for.

About the Author

Written by Anthony Xie

I’m the founder of HodlBot.

I’m a big data nerd. I like to talk about all things data, finance, and crypto. You can find me on Twitter here.

At HodlBot, we make it easy to automatically create diversified cryptocurrency portfolios.

We created HODL10, HODL20, HODL30 indices and the first ever application that allows you to create your own personalized cryptocurrency index fund.

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