Diamond Hands
A slang term describing investors who hold onto their cryptocurrency positions through extreme volatility and price drops, refusing to sell regardless of market conditions.
Last updated: January 5, 2025
What Does Diamond Hands Mean?
Diamond hands (💎🙌) is crypto and stock market slang for investors who hold their positions through severe price drops and volatility without selling. The term implies unwavering conviction—hands as strong as diamonds that won’t let go.
Origin of the Term
The phrase gained popularity on Reddit’s r/WallStreetBets during the 2021 GameStop (GME) short squeeze and quickly spread to crypto communities. It’s often paired with:
- 💎🙌 Diamond hands (strong holders)
- 🧻🙌 Paper hands (weak sellers)
Diamond Hands vs Paper Hands
| Trait | Diamond Hands | Paper Hands |
|---|---|---|
| Behavior | Hold through crashes | Sell at first dip |
| Emoji | 💎🙌 | 🧻🙌 |
| Time horizon | Long-term | Short-term |
| Risk tolerance | Very high | Lower |
| Criticism | Can hold losing bags | Miss recoveries |
When Diamond Hands Makes Sense
Strong Fundamentals
- Project has real utility and adoption
- Team continues building during bear market
- Long-term thesis remains intact
Historical Context
- Bitcoin has recovered from 80%+ drops multiple times
- Short-term volatility often reversed
- Early holders were rewarded for patience
Tax Benefits
- Long-term capital gains often taxed lower
- Frequent trading creates tax events
- Holding simplifies reporting
When Diamond Hands Is Risky
Sunk Cost Fallacy
- Holding just because you’re down
- Project fundamentals have changed
- “It’ll come back” without evidence
Opportunity Cost
- Capital stuck in underperforming assets
- Missing better investment opportunities
- Not all projects recover
Actual Red Flags
- Team abandons project
- Major security breach
- Regulatory action against project
Diamond Hands in Practice
Successful Example
- Bought Bitcoin at $19,000 (2017)
- Held through $3,000 crash (2018)
- Still holding at $50,000+ (2024)
Unsuccessful Example
- Bought Luna at $100
- Held through the crash
- Now worth ~$0
A Balanced Approach
Most successful investors combine:
- Long-term conviction in quality projects
- Willingness to cut losses on fundamentally broken projects
- Regular portfolio review
- Dollar-cost averaging for entries
Trade and hold crypto on trusted exchanges like Coinbase and Kraken.
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