paper hands

The concept of „paper hands” is a term used in the world of crypto assets to describe a situation in which an investor only possesses virtual financial resources in the form of cryptocurrencies but lacks the ability to withdraw them to a bank account or physical cash. This means that the investor’s investments are „locked” in the virtual world of blockchain and do not have a direct reflection in the real world of finances.

Origin of the Term

The term „paper hands” is derived from an analogy to a scenario in which an investor may feel as if they are holding only a virtual, paper trail of their investments instead of actual funds. This is related to the inability to convert these virtual assets into traditional cash.

Examples of Use

The situation in which an investor has „paper hands” can occur on cryptocurrency exchange markets where some platforms do not allow the withdrawal of funds in traditional currency. Other examples include situations where an investor takes short positions on cryptocurrencies, speculating on their future value but without planning to physically realize profits.

Risks and Benefits

For an investor, having „paper hands” can entail greater risk because there is no certainty regarding the ability to withdraw funds when needed. On the other hand, some investors choose this option due to potential benefits associated with the dynamics of the cryptocurrency market and the avoidance of additional fees related to conversion into traditional currencies.

It is worth noting that the concept of „paper hands” is often used in the context of speculative activities in the cryptocurrency market and requires investors to approach the management of their funds carefully. A professional financial advisor can assist in understanding the risks associated with such investments and making the best investment decisions.