Diamond hands is a reference to crypto investors who hold on to assets with high volatility for a long time, regardless of prevailing market conditions. It is the opposite of paper hands, which is someone who sells as soon as the value of their crypto holdings drop
The phrase diamond hands is mostly used to describe users involved in risky investment ventures. Diamond hands investors are mostly motivated by potential gains that assets may accrue. Most of them are firm believers in the value of crypto assets in the long haul, making them hold on to them until such a point in the future when they can sell at higher prices.
Diamond hands not only withstand all the panic when prices tank but also refrain from the urgency to sell when said prices briefly shoot up. In most cases, diamond hands keep their crypto assets.
Origins of Diamond Hands Explained
Like many words and terms used in the crypto sphere, the precise etymology of diamond hands is unclear. But since it is not a technical term or one recognized in official financial circles, traders need to worry about using it in the wrong context.
It highlights the ability of a crypto investor to clinch onto assets for long periods to the extent that it makes the investor’s hand become as hard as a diamond. Some traders liken the term diamond hands to the expression HODL, which loosely translates to ‘hold on to dear life.’ No matter what, diamond hands won’t let go, whether in times of short-term highs or during dips.
However, a widely accepted theory in cryptocurrency is that the word diamond hands was first used on Reddit. More precisely, on the WallStreetBets subreddit in 2018. Since then, the term has gained notoriety among users and is not a preserve of the crypto community alone. The term can be used in stocks and other assets that investors think will gain them monetary value in the long run.