A bagholder is a term used in finance to describe an investor who holds onto a security that has decreased in value until it becomes worthless. Bagholders typically buy in near the peak when the asset is hyped and the price is high, and then hold it all the way through steep declines, losing a lot of money in the process.
A bagholder may stubbornly retain their holding for an extended period hoping that the security will rebound, fixating on remedying losses rather than realizing gains. The term “bagholder” is derived by combining shareholder with the expression “left holding the bag”. It can also refer to the holder of other assets and financial instruments that become worthless, such as junior bonds of a defaulted company or coins of a failed cryptocurrency.
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