Category Archives: HODL wave

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HODL Waves Show Bitcoin’s History

By graphing the age of unspent bitcoins versus time, HODL waves are revealed. There is the Genesis HODL of 2009-2011, the HODL of 2011-2013, the Great HODL of 2013-2017, and the newest HODL wave starting in 2018, names given by the Co-Founder of Unchained Capital, Dhruv Bansal, who discovered HODL waves. The history of HODL waves gives great insight into Bitcoin’s history.

A HODL wave is generated when a large amount of Bitcoin is transacted during a rally, or generated by mining in the case of the Genesis HODL, and then held by investors long term. On the chart of unspent bitcoins versus time, which can be viewed at this link, a HODL wave visually manifests as a series of nested curves with the percentage of older unspent bitcoins becoming much greater.

The Genesis HODL started in 2009 as the first bitcoins were mined by Satoshi Nakamoto and other early birds. The Genesis HODL is the most well-defined HODL wave since there weren’t any Bitcoin exchanges until the latter part of 2010, so miners just let their Bitcoin sit and accumulated more Bitcoin. The Genesis HODL, for the most part, ended in 2011 as miners traded their bitcoins for cash on the first exchanges, but technically the Genesis HODL is still going because Satoshi is holding onto the nearly 1 million bitcoins he mined.

The HODL of 2011 started when Bitcoin rallied to USD 33, and peaked as Bitcoin’s price collapsed back below USD 10. Essentially, when investors buy during a rally they tend to hold onto the bitcoins even in the following bear market, and this generates the HODL wave. The HODL of 2011 continued until 2013 when Bitcoin first spiked above USD 100, going as high as USD 198 in April 2013, at which point most of the investors who bought during the rally to USD 33 sold their Bitcoins.

The Great HODL of 2013 started when Bitcoin spiked over USD 1,000 for the first time, and this HODL wave matured during the bear market that stretched from 2014 through early 2017. Once again, for the most part, investors that bought as Bitcoin went up to USD 1,000 didn’t sell until Bitcoin exceeded the price they purchased it in late 2017.

The greatest Bitcoin rally in history so far took place in the latter half of 2017, peaking at USD 20,000 in December 2017. Many investors from the Great HODL of 2013 cashed out. The SegWit deployment in August 2017 accelerated the end of the HODL wave, since many investors moved coins to new SegWit compatible addresses.

Now that Bitcoin is back into a bear market during 2018, the next HODL wave is clearly beginning, with the age of unspent bitcoins steadily increasing. As reviewed in a previous article on BitcoinNews.com, 42% of bitcoins in wallets with more than 200 bitcoins are being HODLED and this is maintaining a price floor around USD 5,800 in the Bitcoin market.

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