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ABC’s of Trading: Cryptocurrency Slang
Are you new to the crypto realm and finding the number of new words puzzling? We’ve all experienced a learning curve when it comes to the cryptocurrency market. Nevertheless, it’s easier than you think to start using the industry lingo like a pro. So, to help you with the terminology, we’re rounding up the most well-known crypto slang terms you’re bound to stumble upon.
An amalgamation of the words alternative and coin, an altcoin is used to describe any crypto coin that is not Bitcoin. Since the birth of Bitcoin, the first established cryptocurrency in 2009, there are now over 5090 altcoins.
An airdrop is a marketing endeavour where a small number of complimentary crypto coins are sent to some users in a bid to increase awareness.
The highest recorded value of a specific coin is its ATH or all-time high.
A bag holder refers to the person who holds coins after missing out on the moment to sell, and as a result, he/she is left holding worthless coins.
A Bearish market or trend is a term used to describe a downturn in the financial market or when a trader believes the stock value will go down.
A bit is a unit used to designate a fraction of a Bitcoin. For example, 1,000,000 bits is equal to 1 Bitcoin (BTC).
A blockchain is a digital structure that records transactions in chronological order made by cryptocurrencies. If you break the word into 2, the block represents the individual records and the chain that links them together.
Many trading platforms permit the use of crypto trading bots, where the goal is to generate additional profits for the trader. The bot will work on your behalf, and if configured correctly, will watch the market conditions, and buy/sell a cryptocurrency in rapid succession.
A Bullish market describes a strong uptrend or rising share prices. So, a trader will use the term when he/she believes that the market is on the rise.
A transaction usually requires up to 6 confirmations on the Blockchain to be deemed valid, which can take approximately 3-6 hours.
Crypto or Cryptocurrency
A cryptocurrency is a type of digital currency that is separate from those government-issued currencies. Crypto or cryptocurrency, uses cryptography to ensure that all financial transactions are secure.
Cryptography is the art of writing or encrypting regular text into codes. A cryptographer will execute various techniques where plain text would be hidden while stored or in transit.
Fomo stands for the fear of missing out and differs from trader to trader. For instance, when hearing about crypto success stories and a trader’s crypto gains, FOMO could encourage you to buy. As a result of watching a chart on the up and up, that feeling or impulse will drive you to purchase, hold assets for longer, or even hold after the price dips.
Fud is an acronym for the words fear, uncertainty, and doubt. It is largely used to describe negative instances that are spread by someone through social media, and in turn, lead to price drops. For example, if someone describes Bitcoin as a bubble that is about to burst, they are spreading FUD.
A hash rate is a unit that measures the transaction processing speed.
Keep calm and Hodl
Hodl, an acronym for hold on for dear life, is now a legitimate crypto term. Back in 2013, a somewhat exhilarated blogger misspelled word hold in a Bitcoin Forum, and the rest is history. For example, the statement ‘I am hodling’ is used when a trader decides to hold a cryptocurrency rather than sell it. Furthermore, a trader with the desire to hold his coins would be referred to as a coin hodler.
Leverage will allow you to control a larger market share and increase your potential profits. Similarly, leverage can also magnify potential losses. For example, a $50 stake with leverage 100x will become as strong as a $5,000 position. Due to the risks involved with higher leverages, traders should use them responsibly.
Bitcoin’s second layer technology aims to decongest the Blockchain by processing smaller transactions instantly with reduced fees.
Liquidity is the ability to turn an asset into cash without affecting the price.
Margin is defined as the funds that are borrowed from a broker or third party to purchase an investment. In most cases, the margin provides purchasing power to the trader that he/she wouldn’t have been able to afford otherwise.
The market price is the current price that a cryptocurrency can be purchased or sold.
The mempool is known as a waiting area or foyer for those unconfirmed transactions on the Blockchain.
Cryptocurrency mining is a process where miners use specialized systems to secure a network for confirming Bitcoin transactions.
Pump & Dump
A pump and dump will happen when a group of individuals comes together to inflate the price of a crypto coin. It is usually a smaller coin with more controllable parameters and achieved through information without any factual basis. As soon as the demand for this particular coin increases, these individuals sell off their coins at highly inflated prices.
Shill or Shilling
As a result of someone promoting or shilling a coin, there is interest, and people are led to buy. Therefore, the value increases as a result of the shilling.
The main difference between a token and a crypto coin is that a crypto coin is mined. A token is a unit of value that exists within the blockchain ecosystem. We’ve delved deeper into the topic, and you can read more in our blog Coins vs Tokens: Understanding the Difference.
Your crypto wallet is the virtual space where you store your crypto coins. Just like a physical wallet contains your coins and banknotes, your virtual one keeps all your digital assets in one convenient place.
A wallet address consists of a series of 26-35 letters and numbers that will act as your account number for a crypto transaction. You will need this to send and receive cryptocurrency. It is important to note that all cryptocurrencies do not practice the same rules. For example, a Bitcoin wallet address is unique. It changes with every transaction and cannot be re-used. Whereas with Ethereum, your address will not change.
A crypto whale is essentially a big player in the crypto world. A whale holds a very substantial amount of coins and could potentially impact the market with their actions. While crypto whale is a generic term that’s used for the different cryptocurrencies, the term Bitcoin whale describes someone who holds between 1,000 BTC and 1 million BTC or more. We have an entire article dedicated to crypto whales, so if you’d like to know more, read Crypto Whales: Investors That Shake The Blockchain.
The exciting thing about the crypto market is that it is a dynamic scene that is continuously evolving. So, expect more crypto slang words and acronyms to emerge as the market expands and permeates more aspects of everyday life.
If you suffer from FOMO, bookmark this page and use it as your little black book of crypto slang.