Bitcoin first traded above $100 on April 1, 2013.

An ebullient Isaac Miller created the video below on that date, celebrating the milestone in real time. “I’m right here,” he says, “watching history be made.”

It’s impossible not to love him.

It’s been nearly 8 years and the price of bitcoin has increased 500 fold. If Issac started with $2,000 and held, he’s a millionaire today.

So did he HODL or did he sell too soon? We’ll get to that but first let’s discuss the whims of human nature for a minute.

The Disposition To Sell Winners Too Soon

Sometimes, people act irrationally in markets.

This is a foundation of the science of behavioral economics, which studies how people and markets actually behave, not how they should behave, which is more the subject of traditional economics.

Two of the most common irrational investor behaviors are two sides of the same coin. We tend to hold losers too long and sell winners too soon.

Hersh Shefrin and Meir Statman labeled these tendencies The Disposition Effect in The Journal of Finance back in 1984. They chose this name precisely because selling winners too soon and holding losers too long are inherent qualities of human nature.

The rational thing would be to hold winners and let them run and to cut losers quickly thereby avoiding large losses. But we don’t do that.

We get excited when we’re winning and prematurely realize the gains and fearful when we’re losing and avoid realizing the losses.

Bitcoin Culture

There are a lot of winners who are holding bitcoin. Anyone who bought more than 9 days ago is sitting on gains.

A few weeks ago, we examined data depicting how so few people were selling despite the increasing price and popularity. You can revisit that post here.

So the HODLers, of which there are many, have behaved in a manner discordant with human nature. They have defied the Disposition Effect.

They have held their winners and avoided realizing gains too soon. They have been rational actors.

To the behavioral economists out there – this is probably worth studying.

So Did Isaac HODL?

Now back to Isaac Miller.

Eight years have passed and his old video made the rounds across social media. So he made a new one. Here it is.

ht: @DocumentingBTC

Phil Pearlman is the Chief Behavioral Officer at Osprey Funds.

This information should not be relied upon as investment advice, or a recommendation regarding any products, strategies, or any investment in particular. This information is strictly for illustrative, educational, or informational purposes and is subject to change. The author of this article owns bitcoin, directly and through the Osprey Bitcoin Trust.