A bag is a large quantity of a given cryptocurrency which has been purchased as a part of an investor’s portfolio.
The title of bag holder is reserved for someone holding their bag for an extended period of time, regardless of significant market fluctuations.
Bagholders are known for keeping their bag even if the market price of the given cryptocurrency drops drastically. Some of these people hold their bag all the way to zero.
The thought process behind a bag holder is sticking through a major dip in price in hopes for a trend reversal, where their portfolio eventually becomes profitable in the future.
Some bag holders only continue holding their asset simply because they forgot they ever purchased it in the first place.
Other people may be deemed bag holders if they merely lack the time and interest to constantly conduct market research and stay up-to-date in the performance of their bag.
One popular motivating factor for bag holders to hold is that there is some potential to make a profit, or at least minimize their losses, as long as they hold the line and don’t sell. As soon as the bag is sold, the investor takes the loss, thereby losing the potential to make any sort of gain, no matter how small.
Bagholders are analogous to HODLers, those “Holding On for Dear Life” during a downturn in the market.
In the field of human psychology this is what’s known as the Disposition Effect.
It’s the natural human tendency for investors to sell assets which have increased in price while continuing to hold assets which have decreased in price. This is similar to the concept of cognitive dissonance, where actions are made contradictory to logic.
The idea is that people hate losing more than they enjoy winning, no matter how small the win is.
It’s not a specific amount but it usually refers to an amount of coins or tokens greater than most people own.
BuyBitcoinWorldWide writers are subject matter experts and base their articles on firsthand information, like interviews with experts, whitepapers or original studies and experience. We also use trusted research and studies from other well-known sources. You can learn more about our editorial guidelines.
Disclaimer: Buy Bitcoin Worldwide is not offering, promoting, or encouraging the purchase, sale, or trade of any security or commodity. Buy Bitcoin Worldwide is for educational purposes only. Every visitor to Buy Bitcoin Worldwide should consult a professional financial advisor before engaging in such practices. Buy Bitcoin Worldwide, nor any of its owners, employees or agents, are licensed broker-dealers, investment advisers, or hold any relevant distinction or title with respect to investing. Buy Bitcoin Worldwide does not promote, facilitate or engage in futures, options contracts or any other form of derivatives trading.
Buy Bitcoin Worldwide does not offer legal advice. Any such advice should be sought independently of visiting Buy Bitcoin Worldwide. Only a legal professional can offer legal advice and Buy Bitcoin Worldwide offers no such advice with respect to the contents of its website.
Buy Bitcoin Worldwide receives compensation with respect to its referrals for out-bound crypto exchanges and crypto wallet websites.
Wallabit Media LLC and/or its owner/writers own Bitcoin.
Registered Address: 530-B Harkle Road Ste 100 Santa Fe, NM 87505