Many people say that having diamond hands is one of the best traits to have as a crypto investor. But just what does that mean, and why is it a good thing? Read on to find out all that you need to know about diamond hands – and how to get them!
What Does Diamond Hands Mean In The Crypto Community?
“Diamond hands” is a term often used by retail investors and the cryptocurrency community to signify high risk tolerance. Therefore, someone with diamond hands is a person who doesn’t panic-sell and keeps holding their stock or crypto even in the face of major market fluctuations.
One philosophy behind the phrase diamond hands is that pressure creates diamonds – if you stay strong through the pressure, your stocks will turn into diamonds and increase in value. Another possible origin is that since diamonds are hard, hands made out of diamonds will hold an investment regardless of circumstances.
However, diamond hands don’t apply to every single investment choice. For instance, someone who holds Gamestop stocks despite price drops can post tweets with the emoji for diamond proudly. However, someone with Apple stocks that holds it during a 0.5% price drop may not “deserve” to post the diamond icon.
Where Do Diamond Hands Come From?
Most people believe that the phrase “diamond hands” came from the WallStreetBets subreddit. This is a subreddit known for high-risk, high-reward stock investments and the Gamestop stock short squeeze of January 2021.
The term “diamond hands” isn’t the only one that WallStreetBets originated. Some popular investment terms that WallStreetBets invented include “stonks”, a meme-y way to say “stocks”, and “tendies”, referring to gains on investments.
Diamond Hands Vs Paper Hands
In addition to diamond hands, there’s also a term called “paper hands”. As you might have guessed, people who have paper hands tend to be afraid of losses and will sell at the smallest sign of a crypto or stock price decrease. To put it simply, people with paper hands play it extremely safe and bail at the first sign of trouble.
However, this safety does come with many disadvantages. For example, they may miss out on the price of their investments rebounding after a short dip or they may end up paying more in trading fees because they always buy and sell. They’re also less likely to build long-term value by holding stock or crypto with good fundamentals for a long time.
Are Diamond Hands A Good Thing?
Generally speaking, being diamond-handed is a good thing. When talking about risky investments, sometimes it does get a lot worse before it gets better. That’s why people who can weather the bad days tend to reap the most rewards later on when prices start going up again.
However, HODLing everything isn’t always the best policy. Some crypto and NFTs are just doomed to fail, and you need to accept that. No matter how long you’re holding it, some investments just won’t bounce back. And you need to know which ones are worth holding and which ones need to be offloaded.
How Do You Get Diamond Hands?
So how do you develop hands of diamond? Here are three ways to ensure you won’t panic-sell again!
Doing your own research is the best way to remedy paper hands. If you know for sure that your coin has good fundamentals and will appreciate in value over time, you won’t be tempted to sell even during price drops.
Conversely, if your research shows that a coin doesn’t have potential, you won’t buy them in the first place – allowing you to avoid panic-selling altogether.
Think About Bigger Gains
The best time to buy into a coin is during price drops, and many people think the same. More people buying a coin means prices are likely to come back up again. There are two things you can do when a down market hits:
- Lie back and think of the profits you’ll make when prices bounce back.
- Double down and buy more of that coin so you’ll make even more when prices normalize.
Selling Locks Your Losses
The most important thing to remember is that selling your coin puts an L in your win-loss record. If you panic-sell because you’re afraid of losing money, then you’ve likely fulfilled your own prophecy. Remind yourself why you bought into this coin and think it over before deciding to cut your losses.
Having diamond hands is one of the most desirable traits in the cryptocurrency market because you’re much less likely to panic-sell. However, you also need to know when to sell in case your coin has fallen and won’t get back up. Always remember to DYOR before buying into a coin.
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