Diamond hands and paper hands are subjective terms. This means they differ for every person using them. The kids on wallstreetbets call it diamond hands when you boldly hold onto a poopcoin and never sell. It’s paper hands when you decide to sell, either because the coin is mooning or because you’re now uncomfortable with your investment. Going down with a ship, especially when that ship could pay off your student loans… isn’t wisdom.
Where did this “diamond hands” term come from? Diamonds are strong and can push through anything. They are forged in heat and pressure throughout time. No matter what the market is doing, anyone with a pair of infamous “diamond hands” will hold onto their investment even if it adds another zero or if it drops to zero. Hopefully, they believe in the project they invested in and aren’t worried about short-term price changes.
The problem with this? It isn’t always the best financial move. Sometimes coins can be overvalued, for example PancakeBunny recently had a major hack. A flaw in their smart contract code let an exploiter run away with $45,000,000 using a flash loan. If you’re curious what a flash loan is, it’s a cryptocurrency loan that lets you borrow a massive fat stack of cash for absolutely $0 down. Yes, Yes, this is a wet dream for any average investor, but imagine the face of their IRS agent when they report that. Yeah, they probably aren’t. Anyways this person borrowed $700,000,000 FOR FREE, exploited the bug, and then paid back their loan and walked off with a nice gain of $45 mil. If borrowing $700,000,000 sounds like fun to you, check out our video on Flash Loans, where we go in detail about what they are and more uses for them.
Why didn’t they take more than $45 million, you ask? Because they couldn’t. They literally dropped the price of PancakeBunny down to $0. They couldn’t sell more if they wanted to. So that’s why they stopped. A reasonable person would realize that pancakebunny is now super saturated with a ton of tokens that shouldn’t be there, and that probably makes the coin almost worthless. Nope, people are still investing in the coin even though the project has been hacked and the coins should be worthless based on supply and demand. But that’s the issue people are still demanding this token for who knows why.
Now that you understand what diamond hands are, let us tell you one thing you should invest in and hold with your diamond hands, and that is whiteboard crypto, our channel. Make sure to subscribe to this channel and reward our hard work with those diamond hands of yours as these videos take a lot of effort and resources to make. However, you will be rewarded with wisdom and knowledge from the blockchain ancients. What are Paper Hands?
Paper hands is when a trader will sell at the first sign of trouble. So if a coin or token dropped maybe 1% or even 5%, they would immediately sell and this is also known as having weak, paper hands.
Investors with paper hands also are more likely to sell as soon as their investments turns green or they make their money back. They are in for the quick gains, not for long-term sustainability of whatever project they are investing in.
Let’s say a major coin like Ethereum drops $300 overnight, a paper handed investor would sell in fear that it would drop even more and that he could lose his profits even though ethereum is one of the biggest players out there, with tons of projects being built on it and a huge team of developers.
Another investor who could have been called paper handed is someone who invested in PancakeBunny when the price was $50 back in February of 2021. About a month ago, the price raised to a staggering $545. That is more than 10x their money. Let’s say they sold when they 10x their money at around $500. Technically, they were paper handed, but do you think they care that they got in, made a 10 times return on their investment, and then got out? No. They are probably even more happy that they got out knowing the price of pancakebunny literally hit 0 overnight.
Or, what if PancakeBunny fixed their bug, and now are back stronger than ever. Maybe the community who invested believed in the product so much they bought even more tokens at a much cheaper price, since they were literally almost free. Well, this could drive up demand, and then the community could rally, and who knows, maybe the pancakebunny token price will soar even higher than the past all time high of $550.
Which hands are best for you?
Now that is a question that only you can answer. The goal of this channel is to help educate people just like yourself on how cryptocurrency ideas work, so that you can do your own research and decide for yourself.
Each investment is your own journey and if a stock is up 500% you should evaluate whether it’s worth it to get out or stay in. One common play is to slowly sell out of your initial investment as the price rises. For example, I personally bought around $1000 worth of a small Binance token that promised NFTs in a certain niche. That token went from 2 cents up to 3 cents up to 5 cents, and each time it went up, I sold some of my initial investment. Eventually there was a point where I had cashed out my initial investment and still had $5500 worth of the coin, because the price just kept increasing. Even if the price mimicked Pancakebunny, I would still be covered because my initial investment was out, because I kept telling myself “what goes up, must come down”. Now, the price is back to 4 cents and I’ve made a profit of over $3000 just by doing my research and slowly cashing out a coin. Wow, I guess I’m paper handed.
Another thing that helps many smart investors is for them to have an exit strategy. For example, I believe if Ethereum hits $10,000 within the next year, I will definitely be cashing out to Fiat money and taking a vacation or putting a down payment on a house. Why? Because it means I will have more than quadrupled my money and, in my opinion, what’s the point of having that money locked up if you can’t use it to live a good life? An exit strategy is a plan that you have based on the value of your investment. You might tell yourself “if this price doubles, I’m taking out my initial investment and leaving the rest in long term” or something like “If the price goes down below half of what I bought in, I’m selling because I believe other people aren’t believing in the project long-term, and that’s a good reason for me to abandon the project as well”. You can have whatever exit strategy you can come up with, but the purpose is to help you live a more logical investing life. Diamond hands and Paper hands are only meme names given to people who use logic or emotion in their investing.
As we end this video, we encourage you to think about who you get your investment advice from. Is it from paper handed people like me, or someone who’s in it for the long haul? Everyone has motives, and you should keep that in mind during your research phase.