For the first time since the 7th century, the paper economy has found a real competitor in the Internet age. When Bitcoin (BTC) emerged in 2010, the fiat ecosystem faced the challenge of not only proving its value in day-to-day transactions, but also protecting the investment ecosystem it helped build.
Over the years, the cryptocurrency ecosystem has fascinated people from all walks of life. We have responded to unique financial needs while filling the gap left by the fiat currency ecosystem. While most of the world sat on the sidelines trying to decipher the true potential of cryptocurrencies, the first group of Bitcoin billionaires turned investors’ attention to the budding ecosystem.
The freedom to stick to what makes the most economic sense has spawned different classes of investors, each distinguished by the intentions behind their crypto investments. Based on the holistic approach taken by investors, there are four major categories of crypto bag holder mindsets: maximalists, hodlers, formers and traders.
maximalist
From the day Bitcoin demonstrated cross-border dominance after being used as a currency on the dark web, many investors saw a true peer-to-peer currency system for the first time. What followed was a pledge to stick with Bitcoin and make sure it overwhelmed centralized entities—putting power back in the hands of the people.
This full support for Bitcoin and the belief that BTC is the only true alternative to the fiat economy gave birth to the term Bitcoin Maximalism. Bitcoin maximalists have repeatedly advised community members to hold onto their assets during bear markets. Instead, they often recommend buying dips, the process of investing in crypto when the market is performing poorly.
#bitcoin are a swarm of cyber hornets that serve the Goddess of Wisdom, feeding on the Flame of Truth and growing exponentially smarter, faster, and more powerful behind a wall of encrypted energy.
— Michael Saylor ⚡️ (@saylor) September 18, 2020
However, maximalism is not confined to Bitcoin and is widespread in other crypto ecosystems. Investors and crypto enthusiasts who have been committed to growing their preferred blockchain and cryptocurrency for years have a belief pattern similar to Bitcoin’s Maxis. Ethereum (ETH), Dogecoin (DOGE), Shiba Inu (SHIB) and XRP (XRP) are among the few major cryptos that have acquired loyal maximalists over the years who continue to preach the strength of their respective tokens. currency.
HODLer
Hodler is the type of crypto investor who believes in making long-term investments. This type of investor does not fear notoriously volatile market volatility, instead focusing on accumulating cryptocurrency tokens over time.
— CZ Binance (@cz_binance) November 13, 2020
Hodler can be found in all crypto ecosystems and is known to be the most resilient. For new Bitcoiners, the dream behind Hodling is to accumulate at least 1 BTC of his over time. Ultimately, after many halvings and resulting scarcity, Bitcoin hodlers envision a future where their investments will yield unimaginable returns in traditional fiat currency settings.
This dream seems more achievable for other cryptocurrencies given that investors can accumulate large amounts of tokens with relatively little capital. Most of his Gen Z and millennials prefer to buy thousands of meme his tokens in hopes of hitting the jackpot in a bull market.
FOMOers
Formers are the subset of investors who make the biggest mistakes in investing. Fomo is an abbreviation of “Fear of Missing Out”, which means a sense of anxiety about price movements.
By design, Fomoa tends to react adversely to all market conditions. As cryptocurrency prices rise, these investors buy more tokens in the hope that the price will continue to rise. However, this approach does not always yield fruitful results. As a result, they often end up buying tops and selling bottoms.
Related: Is it possible to achieve financial freedom with Bitcoin?
Getting out of this mindset requires a broad study of the market, putting aside the noise of misinformation. Additionally, prominent cryptocurrency entrepreneurs often advocate against fomo-ing and ask the general public to pay attention to the big picture.
trader
These are the simplest investors who are primarily focused on day-to-day prices in search of profit opportunities. Traders closely monitor market sentiment, new developments and regulations to determine how the market will react.
Whether the price goes up or down, traders are ready to take advantage of market volatility by going long or short. must be saved. But his FTX fiasco in 2022 is a reminder that self-management is the ideal way to store cryptocurrencies.
In fact, all types of cryptocurrency holders can potentially make a lot of money buying and selling cryptocurrencies if they know the real strategy. Find out how Cointelegraph Markets Pro members made 120x more with the help of advanced machine learning algorithms and trading opportunity news indicators.