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Three Compelling Reasons for Having Strong Hands in Crypto
Between the thrill, the potential for striking it big, and the ever-present risk of losing it all, the stakes can often feel high in crypto.
And yet, sometimes, the way to succeed in the crypto industry is simply to have “strong hands.” Strong hands — which is crypto speak for holding on to your portfolio — can enable you to ride out the craziness of the crypto market without losing your mind — and still make money.
In this guide, we’ll talk about the concept of strong hands and why you need, well, a pair.
What are Strong Hands in Crypto?
Strong hands, a.k.a diamond hands, is when you don’t sell your investment no matter what’s happening in the market. When you have strong hands, your eyes remain on the prize (depending on your investment goals) regardless of temporary price dips or spikes, market cacophony, or drama.
Journalist Eric Reed captures what diamond hands are about — characterizing an investor with that attribute as one who “battens down the proverbial hatches, trims the main and holds course.”
Investors with strong hands are the polar opposite of those known pejoratively as “weak hands” or “paper hands.” These are investors easily swayed by market movements and sell at the slightest nudge of the market in one direction or the other.
The concept of strong or diamond hands was popularized by the Subreddit r/wallstreet bets before quickly making a major crossover into the crypto community. Thanks to the meme-ready culture of the community, “strong hands” is now a staple in crypto lingo, up there with HODL, the moon, WAGMI (we’re all gonna make it), degens, and other go-tos.
Below, we’ll make the case for having strong hands in crypto.
1. Letting Your Stash Pay Off
A simple yet compelling reason for having strong hands in crypto is you want to make the best bang for your buck.
By their nature, cryptocurrencies are mega volatile. Your favorite coin could take a thrashing this week only to climb dramatically to new highs the next month or year.
While this wasn’t the original grand vision behind cryptocurrency, that volatile nature means an opportunity for risk-loving investors to dive in and “bet on” or capitalize on the price swings.
But the problem with such price swings is it’s easy to, say, panic and consider selling when the price slightly gains. Such a move could be because you want to minimize any potential losses. But it’s a knee-jerk reaction that can cause you to miss out on more money if the currency continues on a favorable trajectory.
Investors with strong hands refuse to buckle in the face of price fluctuations. They understand that the crypto market is super cyclical, and what goes down eventually comes back up, at times manifold.
Take Bitcoin, for example. The leading cryptocurrency, which began at “a price of zero,” has reached several new peaks. Folks that got in and rode out its lows eventually cashed in handsomely when the currency’s price neared or touched those peaks.
It’s not just Bitcoin that’s worth waiting it out. Going through the top 100 to 150 cryptocurrencies on CoinMarketCap, you’ll find cryptocurrencies that have gained with thousands of percentage points from their all-time low, such as TWT (+12360.88%), RUNE (+23694.18%) and SOL (+3823.15%).
Having strong hands can position you to make tidy gains when your coin embarks on a rally.
2. Keeping Emotions Out of the Equation
Emotions and crypto trading do not do well together. Whether it’s fear, uncertainty, and doubt (FUD), fear of missing out (FOMO), greed or euphoria, letting emotions dictate your trading never ends well.
This dynamic first came into focus in traditional finance as economists explored how emotions impact decision-making. In the world of cryptocurrency trading, the stakes become even more amplified thanks to the capricious nature of the market.
An emotion such as FOMO, say, can lead a trader to sell prematurely, as well as other impulsive trading decisions, such as panic selling when the market dips, buying at the top, and so on.
Strong hands are something of a saving grace in such an environment. With that steadfastness, you resist the allure of quick gains and position yourself to gain more when the price surges further. They can help you remain level-headed and make better trading decisions.
3. Belief in a Currency’s Philosophy
Sometimes, strong hands have nothing to do with money. It can be a conviction and belief in what a cryptocurrency represents. Holders of such a cryptocurrency may view it as more than a speculative asset but something bigger that’s exciting to be part of.
Bitcoin, in particular, has attracted hordes of investors who see HODLing it as a vote of confidence in its revolutionary ideals of decentralization, censorship resistance, financial inclusion, and transparency. Such investors see investing in the trailblazing cryptocurrency as a movement, a revolution, a sense of ideology.
Finn Breton, a professor of science and technology at the University of Southern California, Davis, articulates this phenomenon as Bitcoin being part of a “culture,” which is “part of the appeal.” He says buying Bitcoin is “buying into a whole scene” that can be “part of your identity.”
Such a belief and pride in crypto is a reason to have strong hands. Think of projects like Bitcoin and Ethereum. These two continue to dominate the market not only due to their compelling use cases but also thanks to a robust community that’s been like a moat against regulatory overreach, detractors, and even newer and shinier projects that could undermine them.
If you believe in a cryptocurrency’s fundamentals, then having strong hands demonstrates such a belief, which goes a long way.
Final Thoughts: The Long-Term Vision
Patience is a virtue, and in crypto, patience is having strong hands.
Whether you’d like a worthwhile return on your portfolio, to avoid the emotional trading rut, or to show your conviction in a cryptocurrency, having strong hands might just be the recipe.
