For the first time in centuries, paper money or fiat money found its true competition in the Internet age. When Bitcoin (BTC) debuted in 2009, the fiat ecosystem was faced with the challenge of not only proving its worth in day-to-day transactions, but also safeguarding the investment ecosystem it helped build.
Over the years, the crypto ecosystem has attracted people from all walks of life, meeting their unique financial needs and filling in the gaps left by the fiat ecosystem. While most of the world watched from the sidelines, trying to fathom the true potential of cryptocurrencies, the first batch of Bitcoin millionaires drew investor attention to the fledgling ecosystem.
The freedom to stick with what makes the most financial sense spawned various classes of investors, each distinguished by their intent behind cryptocurrency investments. Based on the general approach taken by investors, there are four main mindset categories of crypto exchange holders: maximalists, hodlers, fomoers, and traders.
maximalists
Since the day Bitcoin showed its cross-border supremacy after being used as a currency on the dark web, numerous investors witnessed a true peer-to-peer monetary system for the first time. What followed was a promise to stick with Bitcoin and see it dominate 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 replacement for the fiat economy gave birth to the term Bitcoin maximalism. Bitcoin maximalists have, time and time again, advised members of the community to hold onto their assets during the bear market. They often recommend buying the dip, a process that involves investing in cryptocurrencies during poor market performance. And for the last decade, the recommendation is verified.
#Bitcoin is a swarm of cybernetic hornets in service to the goddess of wisdom, feeding on the fire of truth, growing exponentially smarter, faster and stronger behind a wall of encrypted energy.
—Michael Saylor⚡️ (@saylor) September 18, 2020
However, maximalism is not limited to Bitcoin. It has also spread widely through other crypto ecosystems. Investors and cryptocurrency enthusiasts who have been committed to growing their preferred cryptocurrencies and blockchains for years have a similar belief pattern to Bitcoin maxis. Ether (ETH), Dogecoin (DOGE), Shiba Inu (SHIB), and XRP (XRP) are the few leading cryptocurrencies that have gained loyal maximalists over the years who continue to preach the strength of their respective tokens.
HODLers
Hodlers are the type of crypto investors who believe in making long-term investments. This type of investor does not fear the infamous volatile fluctuations of the market and instead focuses on accumulating cryptocurrency tokens over time.
—CZ Binance (@cz_binance) November 13, 2020
Hodlers can be found in every crypto ecosystem and are known to be the most resilient of the bunch. For new Bitcoiners, the dream behind hodling is to accumulate at least one BTC over time. Through many halving cycles and the resulting scarcity, Bitcoin users envision a future in which their investments pay out a return unimaginable in a traditional fiat environment.
This dream seems more achievable for other cryptocurrencies considering that investors can accumulate a large number of tokens using comparatively lower funds. Some millennials and generation z’ers prefer to buy thousands of meme tokens in the hope of hitting the jackpot during bull markets.
FOMOers
Fomoers are a subset of investors who end up making the biggest mistakes when investing. Fomo is short for “fear of missing out,” which implies a feeling of apprehension related to price movements.
Fomoers tend to react negatively to all market conditions. When the price of cryptocurrencies rises, these investors buy more tokens in the hope that the prices will continue to rise. However, this approach does not always produce fruitful results. As a result, they often end up buying the top and selling the bottom.
Related: Is it possible to achieve financial freedom with Bitcoin?
To get out of this mentality, it is necessary to study the market thoroughly and put aside the noise of misinformation. Additionally, prominent crypto entrepreneurs often recommend against fomo-ing and ask the general public to focus on the big picture.
Merchants
These are the more straightforward investors who focus primarily on day-to-day prices looking for opportunities to make a profit. Traders closely monitor market sentiment, new developments, and regulations to gauge how the markets are reacting.
Regardless of whether prices are going up or down, traders are ready to take advantage of market fluctuations by going long or short. The need for liquid tokens for trading requires traders to store a significant amount of their assets on crypto exchanges. However, the FTX fiasco of 2022 is a reminder that self-custody is the ideal way to store cryptocurrency.
In reality, every type of cryptocurrency holder can potentially make a lot of money buying and selling cryptocurrencies if they know the real strategy. See how Cointelegraph Markets Pro members managed to earn 120x returns with the help of advanced machine learning algorithms and news indicators for trading opportunities.
