As a new cryptocurrency trader or investor, you are likely to find most terminologies (shorthand – terms) very strange and complicated. This is totally understandable. You don’t have to feel lost or that you can’t catch up with the trends happening in cryptocurrency communities. Many pro traders and investors today most likely felt the same way before leveling up and becoming more knowledgeable with cryptocurrency terms and the space in general.
In order to have more knowledge about the cryptocurrency industry, all you are required to do is to make your research, which is why we made this post to save you the stress and time of researching a comprehensive introduction to cryptocurrency terms for beginner investors and traders.
Most Popular Cryptocurrency Terms you Should Know
Alternative coin or Altcoin is basically any cryptocurrency launched after Bitcoin, which is the first and largest digital currency in the crypto market today. It’s one of the cryptocurrency terms mostly used by traders. Examples of altcoin are Ethereum (ETH), Ripple (XRP), Bitcoin Cash (BCH), and many more.
All-time high or ATH simply refers to the highest price ever reached by a cryptocurrency since its history. For example, the leading cryptocurrency, Bitcoin has an ATH of $49,531 at the time this content was made.
Blockchain is a distributed ledger technology that powers pretty much every cryptocurrency in the market today. Data stored on blockchain technology are immutable and can be accessed by the general public. Today, blockchain is applied in other sectors to boost operation, aside from cryptocurrencies.
Bull/Bullish is one of the common cryptocurrency terms used to describe an investor or trader who is confident or anticipates an increase in the market price of a cryptocurrency. For instance, an investor or trader will be called a Bitcoin bull when he/she expects an increase in the price of Bitcoin in the future. This feeling or attitude is said to be “bullish.”
Basically, the cryptocurrency term, Bear/Bearish, is the opposite of Bull/Bullish. A trader or investor is said to be a bearish or a bear when he/she expects the price of the cryptocurrency to decrease in the future.
In the cryptocurrency space, cold refers to offline. Hence, cold storage means keeping or storing your cryptocurrencies offline, i.e, in wallets or devices that don’t necessarily depend on an internet connection to function. Cold storage usually recommended for keeping your cryptocurrencies safe from hacks.
Fiat refers to any currency or physical money issued and controlled by the government and central banks. Examples of fiat currency are the US dollar, Euro, the British Pounds, etc. Fiat is definitely one of the common cryptocurrency terms new traders and investors already know.
The full meaning of FOMO is Fear of Missing Out. This is a market condition where a cryptocurrency is hyped of an imminent increase, causing many traders and investors to start buying the crypto so they won’t miss out on the rise. FOMO can be dangerous as some people might end up being exposed to market manipulation.
Fork refers to any critical change in the protocol or rule in a blockchain or cryptocurrency. There are two types of forks, they include:
- Soft fork: This is a backward-compatible upgrade on a blockchain and it doesn’t result in the split of the blockchain. In a soft fork, the upgraded nodes can interact with the non-upgraded nodes. Using Bitcoin as an instance, SegWit is the soft fork of Bitcoin.
- Hard fork: Hard forks are backward-incompatible updates on a blockchain that results in the split of a blockchain. Bitcoin Cash (BCH) is a hard fork of Bitcoin.
FUD is a terminology in the cryptocurrency market that refers to “Fear, Uncertainty, and Doubt.” FUDs emanate from propaganda or publications that demotes investors’ confidence about a particular cryptocurrency. This usually causes panic selling, which will eventually affect the price of the cryptocurrency involved.
Fudster is a cryptocurrency term used to describe anyone that promotes or spread FUDs in the crypto community.
HODL is a very commonly-used term that stands for “Hold on for Dear Life.” It’s one of the cryptocurrency terms every new investor and trader ought to know. To HODL means holding onto your cryptocurrency for a much longer-term, regardless of its price movement. People with such a strong hand/mindset are referred to as HODLers.
ICO stands for Initial Coin Offering. It’s more like a crowdfunding method that allows a company or project to raise capital from investors, who would receive the native digital currencies of that project in return. The Tezos cryptocurrency (XTZ) is an example of the many cryptocurrencies launched through ICO.
Long/Longing is a crypto trading term that means taking a long or buy position on a cryptocurrency you think will increase in value.
Market capitalization refers to the total valuation of cryptocurrency. This is calculated by multiplying the current price of a cryptocurrency by its current circulating supply. For instance, Bitcoin was trading at the value of $48,564, with a circulating supply of 18,629,587 BTC, during the time of writing. Hence, the market cap or valuation of Bitcoin would be over $904 billion.
The term, Moon, is commonly used by cryptocurrency traders and investors to explain an exponential increase in the value of any crypto.
In the cryptocurrency industry, new traders and investors are usually regarded as Noobs.
PoS stands for Proof-of-Stake. It’s a consensus model that uses network validators for new block production rather than miners. Examples of PoS cryptocurrencies are Cardano (ADA), Tezos (XTZ), etc. Ethereum is on track to transition into the PoS model.
PoW or Proof-of-Work is another consensus model that uses miners to achieve agreement on the blockchain network for confirmation of transactions and new block production. Bitcoin is a typical example of a cryptocurrency running on the PoW model.
In the cryptocurrency market, P&D is known as pump and dump. This is more like a market manipulation strategy where people use exaggerated statements to influence a surge in the price of a cryptocurrency, so they can sell-off their bag.
Sats or Satoshi is a cryptocurrency term for Bitcoin traders and investors specifically. It was derived from Satoshi Nakamoto, the unknown creator of Bitcoin. Sats refers to the smallest unit of Bitcoin that can be transferred, which is 0.00000001 BTC or one-millionth BTC in word.
Short/Shorting is a term mostly used by cryptocurrency traders. It means taking a short or sell position on a cryptocurrency, which you feel will decrease in value anytime soon.
ROI stands for Return of Investment. It’s among the important cryptocurrency terms every beginner should know, as it represents the percentage of gain expected or made from an initial invested capital.
QA means quantitative analysis. It’s a research technique used to better under behaviors in the cryptocurrency market based on quantifiable information.
TA is one of the popular cryptocurrency terms all traders are expected to know and use almost every time. It stands for Technical Analysis, which is research conducted from trading activities to determine or predict the next possible move of a cryptocurrency in value.
A wallet is a software program or hardware device that can allow you to store your cryptocurrencies.
This is also one of the frequently used cryptocurrency terms. A whale refers to a person that holds a significant number of a particular cryptocurrency. It can be a single individual or a company.
As a beginner investor or trader, chances are you are going to find some cryptocurrency terms to be very confusing and intimidating. However, they will eventually become easier as you regularly follow up with crypto enthusiasts in different communities, while also learning and reading up on strange terms or phrases used by these people.
Don’t stop asking questions, and feel free to visit this article regularly, as we keep updating new cryptocurrency terms that come up in the different communities.