It doesn’t matter what asset class you are looking at; due diligence is important. However, doing your homework is even more important where digital currencies are concerned because they have not been around for as long as traditional assets, such as bonds and stocks, and come with a great deal of uncertainty. In the last few years, Bitcoin and other cryptocurrencies have gained a lot of attention and this means that jargon that had once only been used for making inside jokes on Reddit threads and early crypto chat rooms has now become a vital part of the dialogue.
Today, there are Bitcointalk forums, Telegram, Facebook groups, and Reddit that all provide opportunities to crypto enthusiasts for discussing the latest news events, exchanging various investment strategies, and helping each other out with some of the more practical elements of trading cryptocurrencies. But, to be able to do that, you need to be familiar with the crypto slang terms that are used. You may come across crypto enthusiasts say something like Don’t pay attention to FUD and just continue HOLDING your Bitcoin.
What does all of this mean? Let’s take a look at some of the popular crypto slang terms to become familiar with the industry:
Perhaps, the most famous typo that can be found in the crypto community is HODL. Originally, it had been used on a Bitcoin forum and the intention was to say ‘hold’. But, hold on to dear life or HODL has now become a popular strategy in the crypto world. It is often recommended to people when prices are crashing and there is a really big temptation to cut your losses and sell the crypto you own. This is the time where you HODL your coins in hopes of a bullish market in the future.
A coin is heading ‘to the moon when it is expected to rally dramatically, both in terms of price and volume. It is often overused by numerous excited investors who believe they have just bought into the ‘next big thing’. When a coin’s price is experiencing such a spike, it is said to be ‘mooning’. The term is also used for offering support amongst the community with phrases like ‘See you on the moon’ being used.
This stands for Fear, Uncertainty, and Doubt and it is a tactic used for inducing investors into selling the crypto they own. FUD is often created by demeaning a certain cryptocurrency, and even by calling it a scam. Due to this, a lot of the weaker hands decide to sell their holdings, which can push down the price of the coin in question. This allows those creating FUD to buy the crypto at a lower price. It can have a major impact on the entire crypto market. Many people believe that some of the biggest names in the financial industry strategically engage in FUD for triggering market panic.
DYOR stands for Do Your Own Research. It is good advice for everyone who is interested in the crypto space. Sure, you can talk to friends, family, and the community in general for getting a decent perspective about the growth potential of a coin, but ultimately, if you are serious about making an investment, then it is better for you to do your own investigation and research. This term is often used when reviewing future ICOs and aptly so. It can often be risky to invest in a new project, so you shouldn’t just take others on their word and do your own research.
The largest mammal in the ocean is none other than a whale, which equates to having the most power as opposed to the other sea creatures. Likewise, when it comes to the crypto ‘ocean’, a whale refers to someone who owns a significant portion of the circulating supply of a coin. This gives them the ability to influence the price to their advantage. It is possible for whales to manipulate the market by selling a large volume of a coin quickly to send its price crashing.
The price then hits the stop-loss levels of the traders on its way down, which can exacerbate the collapse even further, and this allows the whale to buy in cheaply once again. Moreover, whales are also usually responsible for the massive buy and sell walls that you are most likely to see on crypto exchanges.
Having FOMO means that you have the Fear of Missing Out. This is a term that actually pre-dates the rise of cryptocurrencies, but has undoubtedly been enthusiastically adopted by the online community. When a coin’s price begins to rally significantly, investors who missed out initially start to buy in because they are experiencing FOMO. If they buy in too late and have missed the rally altogether, then it is highly likely that things won’t end well for them.
Pump and Dump
This refers to a coordinated scheme, which is typically arranged through a messaging app like Telegram. It involves collectively purchasing a chosen coin for rapidly boosting its price, which is referred to as the ‘pump’. Those who are participating in this scheme sell the coin while it is pumped for the purpose of making a profit. When the selling continues, the price of the coin will eventually crash and this is referred to as the ‘dump’.
An investor is rather unfortunate because they are left holding the bag at the end of the day, generally after a ‘pump and dump’. This means that they own crypto, which they wanted to sell at a higher price, but the market moved too quickly for them to be able to do anything. Hence, they are now left with a coin that they don’t want and it is at a price where they cannot expect a recovery.
Understanding these crypto slangs will make it easier for you to navigate the crypto market when you decide to dive into it.