Do you speak Cryptoslang?
Are you lost in the immense sea of cryptocurrency' terms? Tired of looking at WallStreetBets and not having a clue about what everyone's talking about? The crypto world can be extremely confusing, not only for newbies. Official sources tend to use standardised terms, but if you start digging in forums and online communities, you might end up encountering words that have a whole different meaning than the one you expect, or words that you simply don't understand. But hey, your friends at Vivid are here to help you. Come with us on a short trip into the world of subreddits and join the dark side; you might even like it.
HODL
Someone at the beginning of the Bitcoin era misspelt the word "hold" in a forum thread, and the rest is history. Some people use it as an acronym for Hold On (For) Dear Life, but it just means hold – don't buy more for now, but don't sell what you have. The term is mainly used to refer to cryptocurrencies, as they're highly volatile, and prices can drastically change in a matter of minutes.
Mooning/To the Moon
Photo by Bruno Scramgnon from Pexels
When a cryptocurrency is mooning, it means that its price is skyrocketing or, as crypto people like to say, heading "to the moon". You'll also see the question "When Moon?" when people ask when the price of a particular coin will spike in value. It's super common on Twitter and other social media sites.
Pump and dump
Pump and dumpers are people who decide to focus on a specific coin as a group hoping to make some profit out of it. The standard practice is to buy vast quantities of it, creating demand in the market, make the coin go up in value and then "dump" the coin and sell it to make a profit.
It's an illegal practice in the regular stock market, but – as often happens – cryptocurrencies fall into a grey area, so it's harder for regulators to stop these behaviours.
It's something that can happen with new coins, and these types of schemes are usually organised through Slack or Telegram. The best way to avoid falling into one of these scams is to understand if FOMO is contributing to your decision to buy whatever you're planning to buy. The second thing to keep in mind is to study the coin you're planning to buy or invest in, the project behind it and the developers. Keep an eye also on where all the buzz is coming from.
FUD
It's the acronym for Fear, Uncertainty and Doubt, very common feelings when dealing with crypto on a daily basis. Some of the most common FUD topics include fear of cryptocurrencies being banned, Bitcoin being the "MySpace of digital money" (the implication being it will fizzle out and become obsolete), and the threat that quantum computing represents for the digital asset ecosystem.
Whale
Photo from Pixabay
It's a term that refers to a person who owns a lot of a specific cryptocurrency.
Large cryptocurrency holders are called whales because their movements in the crypto market “disturb the waters where small fishes swim”, with the small fishes being retail investors. As cryptocurrencies are not truly anonymous, it's actually pretty easy to find the whales because the ledger shows all addresses and transactions.
Whales' concentration of wealth can be a problem for cryptocurrencies. When their coins sit unmoved in an account, they contribute to lower liquidity, which, in turn, can increase price volatility. Volatility is also boosted if the whale moves a large amount of cryptocurrency at once. Let's suppose that a whale plans to sell Ethereum for state currency. In that case, the lack of liquidity and large transaction size could put downward pressure on the price of Ethereum. Other market participants will see the transaction and try to sell as well, starting a chain reaction.
Bagholders
Photo by George Dolgikh @ Giftpundits.com from Pexels
A bagholder is usually someone who is left with crypto assets that are basically worthless, hoping for a market recovery in the future. They aimed to sell at a higher price, but the market moved too fast, and now their assets have no value. It can happen as a result of a pump and dump day or a simple decrease in price over time.
As we like to say, the crypto world is fairly new and moves very fast. All these terms are commonly used nowadays but could become obsolete in a matter of weeks; only time (and the online crypto fanatics) will tell. At least, after reading this article, you'll have a small crypto vocabulary at your disposal and be able to defend yourself next time someone asks you why you are still hodling that coin.
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