October 5, 2022

Bag Holder Meaning

2 min read

If you’ve ever gone to any investment or crypto forums, you may have heard the term “bag holder.” It is mainly used to describe retail investors and has a negative connotation.

What Is a Bag Holder?

A bag holder is a term utilized to explain traders and (primarily) investors who are holding onto possessions that have actually lost pretty much all of their worth. It originated during the Great Depression when individuals in soup lines held potato bags with their only ownerships.

Modern bag holders generally have more “properties” than their namesakes from 1929, but they keep them just as securely. Lots of people associate bag holders’ behavior to either ignorance, sunk expense fallacy, or hesitation to confess that they have actually made a bad investment decision– all of which lead to them not leaving what are undoubtedly losing positions.

Bag Holder Example

Here’s an example of a normal crypto bag holder: picture there’s a person called John, who one day comprised his mind to invest in cryptocurrencies. He saw a bunch of moonings on the news and chose he likewise wanted to make a substantial profit. So, instead of investing carefully, he purchased some SHTC– a cent cryptocurrency that has actually been booming recently.

Of course, instead of mooning or a minimum of locking in a reputable typical price, this crypto, which had no technical foundation to speak of and an absent dev group, has started dropping in value. While lots of other financiers closed their positions and offered all their SHTC, John chose to hold on, not wishing to squander his initial investment and expecting the coin to increase again in the future. Naturally, it never ever did– in a few weeks, it collapsed to no. John was entrusted to absolutely nothing.

market crash

This may be an extreme example, however bag holding is certainly really common in crypto. It’s primarily because many investors in this market are rather inexperienced and psychological and do not have an investment method. So, to avoid ending up being a bag holder, we suggest you to practice investing with smaller sized sums first, keep a cool head, and, naturally, DYOR!

Disclaimer: Please note that the contents of this article are not monetary or investing guidance. The info provided in this short article is the author’s opinion only and ought to not be considered as offering trading or investing suggestions. We do not make any warranties about the completeness, dependability and accuracy of this info. The cryptocurrency market struggles with high volatility and occasional approximate motions. Any financier, trader, or routine crypto users ought to research several viewpoints and recognize with all regional regulations prior to dedicating to an investment.

The post Bag Holder Meaning appeared initially on Cryptocurrency News & & Trading Tips– Crypto Blog by Changelly.