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DIAMOND HANDS BABY!
At least that's what we think we want to be? On the other side, we see paper hands. These two terms describes the investor perfectly, as they are either buying, selling, or holding onto their precious crypto assets. It's more of a meme rather than correct terminology, but we see it all over social media platforms. Apparently, even large corporations have diamond hands. The difference, you ask? Let's take a look at the difference between diamond and paper hands and figure out which type of investor you are!
I am not sponsored by anyone or anything mentioned in this article.
This is not financial advice. I am not a financial advisor.
Please do your own research before making any decisions before investing.
This article is meant for educational purposes only.
"Paper hands" refers to someone who sells too early. In the world of trading, an investor with paper hands exits their position, or folds early because the financial risk is too high for their comfort level. This leads to a wave of FUD and then, in return, leads to mass panic selling. They are described in such a way (paper) because the investor folds or breaks with the slightest amount of pressure.
Investors with paper hands rarely see profits from their initial investments. The cost of transferring crypto between wallets and exchanges adds up rapidly, exchanges charge a fee to buy/sell, they bought at a peak and lost money already, etc. They are most likely to sell as soon as their investment turns green or breaks even. Paper handed individuals have an extremely low appetite for risk and rarely see their profits due to this.
While it's always nice to rake in some profit from your investments, small profits shouldn't be jumped on immediately... especially if the crypto project has a promising future! These investors are typically only in it for the trading aspect itself, not for research and development of a blockchain. These investors will bail out even when they have lost their investment, as they are constantly too worried about their financial future.
An investor with diamond hands will hold their assets regardless of profiting or losing their portfolio value. Large spikes in price will leave the diamond handed investor undeterred. These investors have a more optimistic mindset, as they see their assets becoming even more valuable than they were at their previous all-time-high. If the market is crashing, the bull-headed investor might even buy more of that crypto to "buy the dip". These investors generally have done a great deal of research for all of their assets and believe in the future growth of them.
Like with paper hands, diamond hands also run the risk of losing a good portion of their investment. If the market never recovers fully, the investor is at a significant loss from where they began. It's not necessarily a good move to have your diamond hands secured constantly. To obtain the high reward, there's always higher risks involved. Although ideal, the market cannot continually go up 24/7, 365 days a year. We would all be rich and would miss out on the opportunity to buy the dip since there never would be one! Diamond handed investors will either profit greatly over a longer period of time or crash into the ground. It makes you think... does paper actually beat rock?
Investing is always a risky gamble. It doesn't matter if you are diamond or paper handed, it's important to always do your own research prior to investing in something either short-term or long-term. The extreme volatility of the crypto market can either make the investor extremely happy or extremely discouraged... always invest at your own risk and never invest more than you are willing to lose. Whether it be Bitcoin, Ethereum, or some junk DeFi token, that statement still stands.
Do you have diamond hands or paper hands?
Let us know in the comments down below!
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