The emerging crypto world has embraced the term paper hands vs diamond hands. They describe the differences between unique investor behaviors that can determine the outcome of their investment patterns. While these terms are not new in investment, the crypto world made them popular again through online forums.
What is a Paper Hand?
Paper hand is a term that describes investors who sell their assets early under pressure. The pressure can be anything, from a dip in prices to anticipation of fluctuations. Therefore, the “paper hand” term is used to describe investors with low-risk tolerance.
In a positive light, the paper hand reflects an understanding of the dangers of high-risk investments. It reflects one’s willingness to embrace the nature of a volatile market and take careful steps. However, the paper hand is often used derogatorily, describing investors without guts who refuse to use long-term strategy.
What is a Diamond Hand?
“Diamond hand” is a term that describes investors with a high-risk tolerance. They are more willing to hold on to their assets longer, even with signs of fluctuations or price dipping. The term refers to the tough quality of diamond as a precious stone, which depicts the resolution that will reward these investors.
Diamond hand is often viewed more positively because it is believed to reflect a true investor’s resolution. However, it is not always the single positive strategy, especially in volatile markets such as crypto.
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Paper Hands VS Diamond Hands in Crypto
Paper hands vs diamond hands in crypto is inevitable due to the highly volatile nature of this ecosystem. Crypto investors must deal not only with price movements and market situations but also with personal aspects like doubt, anxieties, fear, and greed.
Crypto investors tend to lean toward diamond hands because long-run investment is viewed as better in the volatile market. Many investors are advised to hold on to their assets for a long time, anticipating the volatile market by waiting for the right time to sell.
The term diamond hand is similar to HODL, another popular term in crypto communities. A variation of “hold”, HODL is short for “hold on to dear life”; an expression that describes a strong resolution to not sell despite pressures.
However, diamond hands are not always viewed positively. If an investor buys a bad investment product, holding on to it despite better opportunities to sell will cause future loss. On the other hand, selling assets on a whim like in the paper hand method might make you end up with a bad financial decision.
Tips to Embrace Diamond Hands in Crypto
When it comes to paper hands vs diamond hands, it is generally agreed that a diamond hand is a better decision for long-term investment. However, you must start from a good ground. Here are several tips for applying the diamond hand mentality while investing in crypto.
1. Avoid Selling because of FUD and FOMO
FUD and FOMO are popular terms that describe the volatile nature of crypto. FUD (fear, uncertainty, doubt) usually happens when one hears rumors or news that could negatively impact crypto prices. They can be news, statements of influential figures, or general economy and finance news that do not go along well with crypto market sentiment.
Meanwhile, FOMO is “fear of missing out”, a term used to describe wishful thinking or exaggerated wishes following the latest trend. FOMO can make investors make rushed decisions because they don’t want to be left behind the trends.
While both are slightly different in nature, the effect is similar. You should not make rushed decisions just because of FUD or FOMO. Every decision should be based on calculations and fundamental signals. Always remember that not everyone is 100 percent accurate in their investment calculation, including investment “experts”.
2. Use Long-term Thinking in Strategy
Crypto investors should be ready to have long-term thinking when formulating strategy. Holding your assets as long as you can help facing uncertainties and price drops. You can wait until the prices return due to other natural factors, such as scarcity. Therefore, using diamond hands as your long-term strategy might not be bad.
3. Convert to Stable Assets during the Dip
Want to get out relatively unscathed from the dip? Convert some of your cryptos into stable assets. They are more liquid and less likely to lose their value. Stablecoins, for example, give your assets stable values even when a dip happens. However, calculate the amount of loss you are comfortable with. Set aside some tokens to prepare for a market price rebound when it happens.
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4. Learn to Spot Window Opportunities
While it is true that the crypto ecosystem is volatile, this also means that you can spot small window opportunities. When the fluctuation causes the price to increase, buy low and sell high, but don’t get greedy. Even when you get good numbers, make sure to stop before the trend decreases again.
Where to Safely Practice Diamond Hands
When it comes to paper hands vs diamond hands, the latter is a better option for a long-term crypto game. You can anticipate market and price movements better and avoid selling at the wrong time. Duckie Land is one of the places where you can do the diamond hands strategy while having fun in a multiplayer game universe.
Duckie Land is a multiplayer, multiplatform online nft game that runs on blockchain. In this game, you play as a cute duck character having adventures in a charming cartoon world. All the characters in this gaming are NFTs, and you can play to get rewards in the form of crypto tokens.
Duckie Land is a perfect place for practicing diamond hands because it is currently running through development. With every update, you get new opportunities to grow your crypto portfolio. The development period is also a good opportunity to observe the market and practice the HODL and other long-term strategies.
Crypto ecosystem is a field where paper hands vs diamond hands always find their supporters. However, with the highly volatile nature of the crypto market, choosing the safest strategy can be a good choice during the dips or other uncertain periods. Start planning your crypto strategy better to increase the chance of profiting.