Bag Holder

Bag Holder is used to define users who keep one or more cryptocurrencies in their investment portfolios for a long time and also have a serious commitment to their investments.

Users who are defined as bag holders don’t take any action for sale even though their cryptocurrencies prices are decreasing. Their loyalty comes from this.

What is Bag Holder?

The “bag” word that is used in the cryptocurrency market refers to a user’s portfolio of cryptocurrencies. Users can keep one or more cryptocurrencies in their bag. Users who hold cryptocurrencies for a long time in their bag in line with their own investment strategies are called Bag Holders.

What is The Logic Behind Being a Bag Holder?

In the traditional financial system, the term Bag Holder is used for investors who insist on holding their assets even if the investment is a failed one. These users believe that no matter how much their investment loses value, they will eventually succeed. They insist on keeping all their assets with this logic.

Bag Holders and Sunk Cost Fallacy

Also, with the same logic, users who are called Bag Holders in the cryptocurrency industry buy and store a cryptocurrency in large quantities at a low price because of their belief in the possibility of a serious profit rate in the long term. These users believe that even though their investments are seen as dead investments at first, they will ultimately make big profits.

Sunk Cost Fallacy is a concept that defines the situation in which an investor believes he has no chance of recovering the investment he has made so far, so he raises his investment and believes that he will eventually make a huge profit. Many investors, who eventually bag older, are experiencing this fallacy.