The phrase “diamond hands” has gained popularity among those who deal in cryptocurrencies. In a word, it refers to continuing to cling onto an investment asset despite risk and volatility. An investor with expert hands battens down the proverbial hatches, cuts the main, and stays course when an asset is suffering losses or seems destined to suffer significant losses. When it might be wise to have diamond hands and when it might not, a financial counselor can offer insight.
Define Diamond Hands
“Diamond hands” refers to the ability to cling onto an investment no matter what. Regardless of volatility, losses, or gains, you don’t sell it. When prices drop, a person with diamond hands doesn’t worry, but when prices go up, they also don’t become envious. The individual is committed to the long term.
A trader in diamond hands will hold onto their asset and the exact position they have in it. If anything, the user will increase the size of that position by adding additional tokens or stock, for example.
This is a colloquialism that probably originated from the use of emojis on investor and cryptocurrency message boards (literally, the diamond emblem plus a set of hands). Like other online idioms, the term’s precise etymology is unknown. However, since it is neither a technical or financial phrase, you shouldn’t be too concerned about using it incorrectly.
With “diamond hands,” you can either hold your item with hands as strong as diamonds or hold it until it gains diamond-like value. One who sells too soon is said to have “paper hands,” in comparison. They suffer defeats because they gave up readily. It is comparable to the idiom “HODL,” which stands for “hang on for dear life” and probably originated from a typo that spread online.
If You Want Diamond Hands, When
The prices on a digital stock chart are declining.
The expression “diamond hands” is most frequently used in reference to losses. It implies to maintain your position despite declines and volatility. You are not succumbing to the fear. Some traders, however, also use the phrase to refer to controlling their greed. In this context, it suggests that you are putting the long-term returns on your investment ahead of short-term spikes and volatility.
There are two main reasons why this term gained popularity among bitcoin users. First of all, cryptocurrencies are extremely erratic investments. Traders in this community have had many opportunities to discuss sticking it out through both highs and lows. However, Bitcoin represents a psychological and emotional investment for many traders in addition to a financial one. Their possession of diamond hands represents a stake in the future of cryptocurrencies in general.
Many of these investors aren’t only looking to cash out on their bitcoin, ether, or other digital currency holdings. if it appears profitable. They have a stake in the idea of cryptocurrency personally. No matter what, they are keeping their assets for the long term.
As mentioned above, “diamond hands” originally referred to cryptocurrency, but it has now spread to include equities, real estate, nonfungible tokens (NFTs), and any other item you believe will be valuable over the long term.
Diamond hands may be universally seen as positive in some online forums, but this isn’t always the case. On occasion, assets ought to be sold. Many assets are worthless unless they are sold and turned into cash. Here, prudent management and a healthy dose of perspective are required. Selling too soon out of either fear or greed is undoubtedly a bad idea. But neither is remaining in your position indefinitely because you’ve learned to view leaving it as weakness.
Conclusion
A financier with brilliant hands
Holding onto your position through highs and lows is referred to as having “diamond hands.” Although the expression has its roots in the world of cryptocurrencies, it can be used in any situation involving stocks when a decision needs to be made regarding whether to hold steady, sell, or increase a position as prices decline. Paper hands, or selling (or “folding”) too soon and suffering a loss, is contrasted with diamond hands. Some general suggestions Make a plan, follow it through with it, and don’t focus too much on what emoji-based analysts have to say about your choices.
