Here’s What ‘Paper Hands’ Means in the Crypto World

Jakarta, Pintu News – In the cryptocurrency world, the term paper hands often appears in investor forums, especially when the price of digital assets experiences a drastic decline. This expression refers to the behavior of investors who easily panic and quickly sell their assets at the first sign of volatility. This article will discuss the meaning of paper hands, who it refers to, its origins, and how it shapes market dynamics.

What are Paper Hands?

According to Amanda Reaume’s article on Seeking Alpha (2024), paper hands is a slang term for investors who give up too quickly for fear of losing money. They are thought to “fold like paper” in the face of minor stresses, selling assets before long-term profit potential has been proven.

Negatively, this nickname is often used to describe the psychological weakness of investors. However, on the other hand, the decision to sell early sometimes saves them from bigger losses, especially when the market is in a sharp decline.

Also Read: 5 Trading Signals Bitcoin (BTC) is Under Pressure-Is This the Start of a Major Correction?

Who are the Paper Hands?

Novice investors are usually the most vulnerable to being called paper hands. This is because they tend to be risk-averse or unprepared for the market turmoil that is common in the cryptocurrency world.

If the number of these types of investors is large enough, the impact can be significant. Amanda Reaume explains that the phenomenon of mass panic selling can cause a wave of sharp price drops, especially in markets with low liquidity.

When did this term come about?

The term paper hands became popular in 2021, when the r/WallStreetBets forum on Reddit popularized it in debates surrounding GameStop stock and various stock memes. The community used the term to distinguish between mentally strong investors(diamond hands) and those who are easily swayed(paper hands).

Over time, the term has also spread widely in the cryptocurrency world. Investors in Bitcoin (BTC), Ethereum (ETH), and altcoins like Dogecoin (DOGE) or Pepe Coin (PEPE) use it in discussions of volatile markets.

Where is this term often used?

Amanda Reaume writes that the term is most commonly used in online forums such as Reddit, Twitter (X), and the Telegram trader community. In addition, special emojis in the form of toilet paper rolls and open hands are often used to represent paper hands.

In fact, in some cases, the term is used as a form of “encouragement” to keep investors from selling their assets too quickly. However, the author emphasizes the importance of every investor doing their own research and making their own decisions.

Why is the Paper Hands vs. Diamond Hands Debate Important?

Paper hands are often contrasted with diamond hands. Paper hands investors usually exit too soon and may miss the price rebound. Diamond hands, on the other hand, hold on to assets even if the market is red, hoping for a rebound in prices.

However, they don’t always produce better results. Diamond hands investors may suffer huge losses if prices continue to fall, while paper hands may survive deeper losses. This shows that there is no truly risk-free strategy in the crypto market.

How to respond to this phenomenon?

Amanda Reaume recalls an old Wall Street adage: “Hold your winners, sell your losers.” That is, don’t rush to sell assets that go up just for a small profit, and quickly let go of assets that no longer match the initial analysis.

However, no strategy is perfect. Every investment decision has an opportunity cost. Therefore, investors are advised to understand their personal risk profile, make a clear investment plan, and not be too easily influenced by market hype or rumors.

Conclusion

At the end of the day, paper hands are a psychological reflection of how investors deal with uncertain markets. The highly volatile crypto world makes this term even more relevant. Whether you choose the path of paper hands or diamond hands, the key remains in-depth research and discipline in executing your investment strategy.

Also Read: 5 Secrets to Using Crypto Trading Signals to Increase Investment Profits!

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities are subject to high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying andselling Bitcoin and other crypto asset investments are the responsibility of the reader.

Reference

• Amanda Reaume. Paper Hands: Meaning and Origin. Seeking Alpha. Accessed August 21, 2025.