Long-Term Holding (HODL)
Holding a crypto asset for more than one year, which typically qualifies for lower capital gains tax rates.
Explained Simply
In many jurisdictions including the US, assets held for more than one year receive favorable long-term capital gains tax rates (0%, 15%, or 20% depending on income) compared to short-term rates (up to 37%). This creates a strong incentive to hold through volatility rather than trade frequently. The crypto community adopted 'HODL' (originally a typo for 'hold') as a rallying cry for this strategy. Long-term holding also reduces trading fees and the complexity of tax reporting.
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