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Bag Holder

Beginner
Definition
A bagholder is a slang term for an investor who holds onto his or her assets until their value decreases to zero.

A bagholder is someone who holds onto a losing investment for too long, missing the opportunity to minimize losses. Bagholders can emerge when investors become emotionally attached to an asset or have a strong belief in its value.

Investors may hold on to their assets out of loyalty or even due to denial, hoping that the asset will regain lost value rather than cutting their losses and moving on.

Where does the term “holding the bag” come from?

The term “holding the bag” refers to a situation where an investor or trader has invested in an asset and it becomes worthless, or nearly so.

For example, if you purchased stock in a company that went bankrupt and became insolvent, your investment would be considered “held by the bag” because its value would be zero.

When used in reference to crypto, people will say things like “I’m holding my bags until next year when Bitcoin hits $50k again!”

What is bag holder in Crypto?

Bagholder is a term used in the crypto community to describe someone who holds onto a losing investment for too long. Besides being emotionally attached, a bagholder might also hold on because they don’t want to admit that their initial investment was wrong.

Key Points 

Bagholder is a term used in finance to refer to someone who holds an investment that has lost value. Bagholders might also be called “bagowners” in reference to the fact that their assets are now “out of the bag”. They have “bags” full of worthless securities instead of money that could be invested in something else.

Learn more about investing

No matter your level of financial literacy, we have more than enough financial education resources to get you started. Also, with our wealth management app, you can easily save, invest, and begin your own path to financial independence. Find out more about Cowrywise.

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