Bag Holder

A “Bag Holder” refers to an investor who holds onto an Asset that has decreased significantly in value, typically because they are unwilling to sell at a loss. This term often carries a negative connotation, suggesting that the investor is stuck in a losing position and may be hoping for a rebound in price.

For example, if an investor buys Shares of a company at $100 each, and the Stock price falls to $30, that investor may become a bag holder if they choose to hold onto the Shares in the hope that the price will recover instead of selling at a loss.

In another case, during a market downturn, a bag holder might be someone who purchased a Cryptocurrency at a peak price, say $50,000, but refuses to sell as the price drops to $20,000, believing it will eventually rise again.