Diamond Hands

Diamond hands is a slang term for market participants who hold onto their digital assets despite market volatility.

What Does Diamond Hands Mean in Crypto?

Diamond hands is crypto jargon referring to cryptocurrency traders who refrain from selling their coins regardless of market pressure. While it can also define investors who hold traditional assets like stocks, it is popularly used for highly volatile assets, such as crypto and meme stocks (e.g., Gamestop stock circa 2021). It signifies the unwavering or high risk tolerance of such investors amid price fluctuations.

It is the opposite of paper hands or weak hands, which describes investors who immediately start selling at the first sign of price fluctuations or sell pressure. On the contrary, diamond hands HODL their coin, even when facing a major decline in value. While others sell, Diamond handers may even buck market trends by buying the dip. In other words, people with diamond hands are true believers in their chosen asset.

That said, the phrase can also be used negatively to define traders who are too stubborn to exit their positions and cut their losses before an asset’s value plummets further.

Where Did It Come From?

The term first appeared around 2018 on the social media platform Reddit, used frequently in the WallStreetBets subreddit: a community as focused on discussing high-risk, high-reward investments as it is on sharing and creating investment memes. The term Diamond Hands later spread to online investor communities on other social media platforms, such as X (formerly Twitter). 

The origin of this phrase can be interpreted as a derivative of the metaphor “pressure makes diamonds” to imply that if one can withstand the selling pressure, their investments will eventually grow in value. It also paints a picture of someone holding onto their proverbial crypto bags with hands as hard and resilient as diamonds.