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DIAMOND HANDS
(Holding Through Volatility)
DIAMOND HANDS describes investors who refuse to sell assets despite extreme price drops or volatility, believing in eventual recovery. The term (visualized with 💎✋ emojis) became iconic during the 2021 GME saga when Reddit traders held against 80% dips.
This mentality contrasts with PAPER HANDS who panic sell. While sometimes profitable (Bitcoin HODLers saw 100x returns), diamond hands can become sunk cost fallacy - 90% of 2017 ICO buyers still holding have losses exceeding 95%. The strategy works best for assets with strong fundamentals, not meme-driven pumps. Psychologists note diamond hands behavior often stems from ego protection (avoiding realization of losses) and community reinforcement in forums like WallStreetBets.
This mentality contrasts with PAPER HANDS who panic sell. While sometimes profitable (Bitcoin HODLers saw 100x returns), diamond hands can become sunk cost fallacy - 90% of 2017 ICO buyers still holding have losses exceeding 95%. The strategy works best for assets with strong fundamentals, not meme-driven pumps. Psychologists note diamond hands behavior often stems from ego protection (avoiding realization of losses) and community reinforcement in forums like WallStreetBets.