Bitcoin value history: the impact of HODL

We look at Bitcoin's value history and whether spending or hodling can impact its price.

The debate over what exactly Bitcoin “is” has a long history. Is Bitcoin a form of digital gold and thereby a store of value, or should Bitcoin be seen as peer-to-peer electronic cash? This debate has caused some of the largest divides in the crypto community, and also led to the fork of Bitcoin Cash. For Roger Ver and the Bitcoin Cash crew, Bitcoin is there to be spent. It is, in essence, digital cash according to them. From their perspective, the idea of HODLing can be detrimental to the ecosystem and result in a net negative. The decision to HODL has impacted Bitcoin’s value history and not always for the better.

The HODL meme of holding Bitcoin

The birthplace of the HODL meme was on a Bitcoin Talk forum many years ago in 2013. One man in his drunken state wrote a lengthy piece on why he was going to hold his Bitcoin for the long term. However, he made a typo, and the rest is history in the world of Bitcoin. The meme has taken on a life of its own and is firmly stored in the lexicon of the Bitcoin community. Whenever there is uncertainty about the price, you can be sure that HODL will make an appearance. Since then though, even the person responsible for the HODL meme has disavowed his own words.

The Bitcoin Cash belief

According to members of the Bitcoin Cash community, the way to create value is to spend your Bitcoin Cash and replace it. Through this, you can create an ecosystem of value. The opposite to this is to HODL, which means that Bitcoin is not being spent and therefore not providing much of a use case.

On the other side of this debate, people argue that through HODLing, the supply of Bitcoin is reduced and therefore the value of Bitcoin will rise.

This debate came to a head in the bull run of 2017. As the Bitcoin mempool started to fill up, the cost to transact Bitcoin rocketed along with it. Transaction prices went into double figures in terms of dollars. In essence, Bitcoin needed to scale to handle the amount of transactions it was seeing.  Two different solutions were provided for this: a second-layer solution known as the Lightning Network (Bitcoin) and an on-chain solution whereby the size of the blocks was increased (Bitcoin Cash). Both would allow for a greater amount of transactions and reduced cost for the user.

Key events impacting Bitcoin’s value history

Whilst the Lightning Network continues to advance and make progress, there is still a long way to go for the network to become usable for the average person.

Since separating from Bitcoin, Bitcoin Cash has continued to push the “spend, don’t HODL” narrative. With the current bear market, the prices of both have suffered greatly, but it is Bitcoin Cash that has been the worst performer of the two, suggesting that the community disagrees with Ver and the Bitcoin Cash gang.

Of course, there is still a long way to go to see who will be the true winner in the battle, but as for right now, Bitcoin is king and doesn’t appear to be getting challenged any time soon. For many supporters of Bitcoin, the fear of larger blocks stems from a fear of centralisation. The situation wasn’t helped when the largest miner of Bitcoin, Bitmain, supported the larger block hypothesis. The debate has reemerged in recent weeks, with Luke Dash Jr suggesting that the Bitcoin block size needs to be reduced further to 300kb, although this has been met with some resistance.

Bitcoin Cash has also suffered from the split with Bitcoin SV, which has fragmented the community even more. Initially, Roger Ver and the ABC crew were friendly with Craig Wright and the nChain crew. The relationship soon turned sour, but both Bitcoin Cash and Bitcoin SV agree on the notion that Bitcoin should behave more like electronic, digital cash, but disagree on the roadmap to achieve this.


The debate over whether one should hold Bitcoin or spend it will continue to rumble on for as long as there are competing versions. Whilst HODLing is certainly an option, the fact that both camps are incorporating ideas to make spending Bitcoin more feasible shows that Bitcoin is also a form of peer-to-peer electronic cash. The issue arises over the best way to achieve this.

Whilst there are some merchants and websites that accept Bitcoin, there are still not enough for Bitcoin to be considered similar to the US dollar or the British pound. If, or when, Bitcoin reaches mainstream adoption as a viable currency, then holding Bitcoin will definitely not be as common and spending your Bitcoin will be the way to use the currency.

Until then though, the choice is yours. If you own your Bitcoin, then whatever you choose to do with it is up to you and you alone.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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