Have you found you are somewhat confused when it comes to discussing cryptocurrency? If so, you aren’t alone. The fact is, if you don’t take the time to learn all the terms and slang used around this market, you may lose more money than you earn.
If you are interested in trading bitcoin, then it is best to learn these terms and slang. This will ensure that you know what you are doing and what to expect from the market. If you don’t take the time to get to know how to trade and the words and terms you are likely to encounter, then issues may arise. Make sure to keep this in mind, which will help ensure you are prepared for anything that may occur. Taking the time to do this will pay off in the long run.
“Altcoin” is short for alternative coin and encompasses any coin other than Bitcoin, which is accepted as the “main” cryptocurrency. Altcoins can be created and used for much more than simple transactions and often exist to improve upon the Bitcoin framework.
The actual act of selling and buying on various exchanges for earing the difference in the spread. The Arbitrage opportunities take place because of the differences in the exchange of reputation, the community coin options and the ese of the bank funding. Keep in mind, that the fees, prices and limits will change at anytime when you decide to transfer the coins in between exchanges, specifically during the volatile times.
This is a shorthand term for “All-Time High.” It refers to the market being at the highest historical price for a certain coin.
The blockchain is the way that the data is structured and the actual foundation of various cryptocurrencies, such as bitcoin. In fact, it is considered somewhat of a coding breakthrough, which is made up of blocks of transactions. This allows competitors to share their digital ledger across several computers with no need for a central authority. There is no way for a central party to mess with the records – this helps to keep everyone honest.
Learn more about “What is the Blockchain?“
Bullish and Bearish
These are words that relate to the market conditions of an investment, including cryptocurrency. Bullish means that the share prices are increasing, while bearish means the share prices are falling. If Bitcoin looks “bullish”, that means that the charts and trading volumes suggest that the price is going to increase. The opposite is true if Bitcoin looks “bearish”.
This is a shorthand way to say, “Distributed Denial of Service.” When a DDoS attack is well-timed, it will attack the exchanges during the volatile movements, which can be devastating to traders. This won’t allow traders to complete any order manually and cause them to be completely at the whim of the pre-set of the limit orders.
This is a shorthand way of saying “fear of missing out.” If you see a huge green mark on a chart and you don’t own that particular coin, then you sell other items to purchase into it. In many cases, crypto trading is driven by emotions, instead of valuation and FOMO is a significant factor that has to be considered when swing trading in this market.
FUD is an acronym for “Fear / Uncertainty / Doubt”. When someone is “spreading FUD”, it means they are spreading news that suggests something bad or negative will happen. Example: China banned bitcoin exchanges today and it’s causing FUD about bitcoin’s longevity. (Hint: Just HODL!)
This is a misspelling of the world “hold,” that stuck around and that actually means “keep.” Many traders insist that it’s actually an acronym for “Hold On for Dear Life”. Regardless, it’s a commonly used term among traders due to the huge volatility of the markets. Bitcoin’s price can fall by the thousands and most experienced traders will tell you to “HODL” instead of getting nervous and selling for a loss. Any crypto trader who decides to purchase a coin and who doesn’t see himself selling it in the foreseeable future is considered a coin holder.
This is another shorthand term that means “Initial Coin Offering.” This takes a page from the typical IPOs that investors are more familiar with.
Coins that are purchased during an ICO are typically sold for a profit after the coin initially hits the exchanges. This is because of all the initial hype, which will increase the demand for this particular coin.
In regard to the supply side, the ICO will create entry barriers because the buyer has to create their private wallet so they can receive the coins that they purchase from the ICO purchase.
Learn more about “What is an ICO?“
The market cap of a stock refers to the market value of the outstanding shares a company has. On the cryptocurrency market, this cap is used for illustrating the coin’s dominance over the entire market.
Pumping is when Bitcoin or other altcoins start drastically rising in price. This can happen legitimately due to events or news involving that specific coin or when a group of people artificially rise the price of a coin by promoting it or endorsing it. They will spend several minutes, hours or in some cases, days, buying cheap coins, with the intention of dumping them by building up the buzz first.
Pumping is when Bitcoin or other altcoins start drastically dropping in price. Dumping occurs after a coin has gained momentum because of all the buzz. The dumping process is when the sellers sell a large amount of coins.
Pump & Dump
The pump and dump process is one that is illegal. It is made up of artificially pumping and then dumping, which is described above.
Signals are used with day trading cryptocurrencies and come in the form of updates from technical analysts and insiders. After analyzing a chart, analysts will send signals to users telling them when to buy and sell a certain coin in order to make a profit.
The wallet is essentially the bitcoin equivalent to a bank account. It lets you receive and store bitcoin and other cryptocurrencies. You can also use wallets to send your bitcoins to others. There are two primary types of wallets, the cold wallet and hot wallet. Cold wallets aren’t connected to the internet, which makes them safer than other storage options.
Learn more about “Wallets & Storage“