One of the most recognizable catchphrases within the crypto space is the concept of HODLing, which is taking a long-term long position on a cryptoasset and enduring losses with the hopes of large gains down the line.

However for many HODLers there is now an optimal way of placing the capital in the hands of the most high-performing traders in the crypto market in order to maximize the profit that they gain over the long-term.

We’re taking a deeper look into what covesting is, how it is a better option for HODLers, and how to get started with covesting in the crypto market.

HODLing - The Most Simple Crypto Strategy

HODLing is easily the most simple strategy for crypto investors, and as such it has become quite popular within the cryptocurrency market over the past 10 years.

HODLing is essentially the process of buying a cryptoassets and holding it for a prolonged period of time, ignoring the natural fluctuations in price that may happen throughout that period, no matter whether the fluctuations lead to significant losses or not.

The goal of HODLing is to take a simplified approach to long-term investing within the cryptocurrency space, and the concept is that over a long enough period of time any investment within the crypto space will become profitable.

Why is HODLing So Popular?

HODLing has become popular particularly because of the lack of a need for a detailed understanding of how to trade different assets, and also because of the reduced amount of time that is needed in comparison to actively trading.

This allows traders to be able to set and forget, buying an asset and waiting for often months or years to sell at a higher price.

In comparison to actively trading, HODLers are able to get on with their lives without having to dedicate time and stress to making buy and sell orders, with large losses of value not even phasing them.

What is the Problem with HODLing?

There are a number of problems with HOLDing, however the primary issue is that it is massively inefficient, being that although over a long enough period of time most investments in the crypto space become profitable, throughout that period they could have been a lot more profit generated by actively trading.

As well as this, another problem is that HODLers inevitably have to absorb significant losses with this being an undesirable way of trading in the cryptocurrency market, and it also being unnecessary if there are other options available.

Overall, HODLing is a hands-free strategy for investing in cryptocurrency, however it is also an extremely inefficient strategy and there are better ways of achieving a similar result of hands-free trading but with higher returns.

Covesting - A Optimised Alternative to HODLing

Covesting is the first form of social trading that has been available in the cryptocurrency market and it was first launched in 2017, although over the past few years it has rapidly grown in popularity.

Covesting allows traders and investors to work together, with the best performing traders in the industry being able to be hired to generate higher levels of profit that are typically available in return for a 20% success fee on all profit.

This provides an optimal situation to HODLers, being that by investing capital into the strategies of the best performing traders in the market, not only is it still a hands-free approach that doesn’t require significant amount of time or stress, but also the trader that is working on your behalf will generate much higher returns done is the case with HODLing.

Where is Covesting Available?

Initially covesting was launched when fintech startup, Covesting.io, launched in 2017 after securing more than $18 million in funding in order to build a team and technologies that would be necessary to bring crypto social trading to the market.

In early 2020 however, a partnership between Covesting.io and the world's leading multi-asset margin trading platform, PrimeXBT, has meant that now covesting is also available at the later platform via the Covesting module that was developed in partnership between the two platforms.

PrimeXBT manages up to $2 billion worth of global trade every day and is a leader in the multi-asset margin trading space, allowing for a combination of the benefits of covesting and of high-leverage margin trading.

The Covesting Module Beta Phase

In April 2020, the beta phase of PrimeXBT’s Covesting module began and continued for 4 months until August 2020 when it was closed successfully, and the full version of the Covesting module was launched.

Throughout the 4-month beta phase, more than $1 million worth of equity was provided by different followers into funds at the Covesting module, representing a strong demand for crypto social trading within the market.

As well as this, the top performing strategy managers in the Covesting module beta phase generated more than 1800% ROI for the followers, with this being dramatically higher levels of profitability then would be able to be achieved without covesting.

Final Thoughts

For many HODLers, using covesting in order to be able to maximize the profits they generate over the long-term is an optimal solution and one which still requires no kind of time or effort input.

Instead of leaving the capital as a deadweight in the market, investors are able to use covesting to be able to let provably profitable strategies in the market generate higher levels of revenue then they would be able to with HODLing.

To learn more about covesting and about how many HODLers are transitioning their funds for more optimal results, check out this link.