Slangs are a major part of the cryptocurrency world that have significant importance. And as the crypto community continues to grow and evolve, it’s important to get familiar with some of the common terms.
Having a proper understanding of these digital languages would make it easier to scale certain crypto market challenges, amongst other benefits. Therefore, in this article, we will delve into the most popular terms used by crypto enthusiasts for easy understanding by newbies in the industry.
This is arguably the most common crypto term out there. And while many may have guessed correctly, some are not aware that it originates from a misspelled word. The term is often used when the market shows high volatility.
It first appeared in a forum post for Bitcoin in 2013 when a user wrote “HODL” rather than “HOLD”. But ever since then, the digital community has taken this term to mean “Hold On for Dear Life”. The term itself means to hold onto a particular asset despite an increase or decrease in market value.
The word HODL perfectly encompasses the principle of most investors that it’s best to keep a firm hand instead of selling during hard times.
In the cryptocurrency market, certain assets pump overnight or at high-speed rates. And this makes some investors who are yet to invest feel like they have missed out on the coin. Thus, FOMO is a term used to depict this emotion.
FOMO is an abbreviated version of “Fear Of Missing Out”. And when crypto enthusiasts experience this, they tend to make impulsive decisions like buying the coin regardless of the value. This would more often than not, end up driving the price higher.
For this reason, investors are usually advised not to allow FOMO to drive their buying decisions. This way, they would be able to do the necessary research and avoid making poor investments.
“Rekt” is a word derived from the transcribed version of “wrecked”, and it means exactly what it implies. It describes the feeling any investor experiences when he/she encounters huge losses from assets that dip.
The world of digital assets is a very volatile one and prices change rapidly. As such, several assets may experience a quick decline while some others may go sky-high just as quickly. And as a result, those holding the assets that decline lose a substantial amount of money which leads to them feeling “Rekt”.
4. To The Moon
“To The Moon” is another common term used by investors. It embodies the belief that a particular coin with prospects would experience a significant increase in price. So when you say that a coin, Ripple, for example, is going to the moon, it means you believe its value will soon go on a substantial bull run.
In general, people use the phrase “to the moon” in relation to shit coins that are yet to receive as much recognition as Bitcoin or altcoins. So this phrase depicts the optimism associated with the market where investors hope for an increase in the price of their assets.
5. Pump and Dump
When dealing with digital assets, certain coins experience a rapid increase in value, but then they also decline just as fast. Usually, when this happens, sometimes it may be due to a drop in demand and supply but other times, it is often because there was artificial inflation. And this is what pump and dump means.
Thus, a pump means when a group of traders use artificial means to increase an asset’s value through coordinated buying. And once the price increases, they dump their holdings at that new price which brings down the asset’s price once again. This then allows them to take out their profits and leave while other investors get left with crashing holdings.
A “whale” in the cryptocurrency market is different from the regular definition of a whale in the sea. Whales in this market refer to individuals who hold a very significant amount of a certain digital asset. And these individuals have enough of this asset to influence its value with their trading activities.
These whales usually are crazy rich, and their wealth allows them to be able to purchase or sell huge amounts of coins. And they usually have up to 5% or more of the coin’s total supply. Thus, any trading activity they engage in could trigger either FOMO or a widespread panic dump by investors.
7. Market Cap
This is a short form for the term “Market Capitalization”. And people use it to measure or determine the total value of a coin while giving an idea of what the coin’s overall worth is. The market cap of any coin is calculated by multiplying its total circulating supply by the current price of a cryptocurrency.
8. Buy The Dip
When investors “buy the dip”, otherwise known as “BTD”, it means they are capitalizing on the fact that a coin has dropped in value. The main goal and belief behind this is that the value of the coin in question would bounce back and increase later on.
Usually, crypto enthusiasts buy the dip when they are sure that regardless of short-term fluctuations, the asset would still recover in the long run. And generally, they do this with coins that they have tested and trusted, like Bitcoin and Ethereum.
Crypto markets have certain trends depending on whether the price of the asset is increasing or reducing. And these patterns or trends are depicted by certain terms – “Bullish” and “Bearish”.
A bullish market movement refers to a situation where the value is rising or will increase. Investors in this kind of market usually expect a continued increase, so they may buy or keep their holdings.
But a bearish market, on the other hand, signifies a trend where the price is crashing or will fall later on. If this is the case, enthusiasts sell the assets they have and avoid buying more to reduce losses.
While there are several other terminologies in use, the above-mentioned are some of the most common. In the crypto world, getting familiar with these languages is important so as not to miss out on specific investments.