The Crypto investing glossary: words you need to know as a crypto investors
Over the past few years, the cryptocurrency sector has been gaining more attention from people all over the world. An increasing number of people are either investing in cryptocurrencies or are considering them to be an extra source of investment.
Due to the increasing interest in cryptocurrencies, it is important that people know the common terminologies used by investors and traders. This article will list some of the terms and acronyms commonly used in the cryptocurrency space. We aim to make it easier for you to understand the landscape. The glossary will give you an overview of the day-to-day terms used in the crypto world and explain what they mean.
Crypto investment glossary
Fiat
A term for the usual government-issued currencies
Whale
A term used to describe traders and investors who have an unusually large amount of cryptocurrencies. Whales are those with enough funds to manipulate a market
Going long
A margin trade that benefits the trader if the price decreases
Going short
A margin trade that benefits the trader if the price decreases
Limit order/limit buy/limit sell
This refers to orders placed by traders to purchase or sell a cryptocurrency when the price meets a specific target.
Sell wall/buy wall
Traders can see the current limit buy and sell points when they use a depth chart.
Bearish
The expectation that the price of a cryptocurrency will decrease
Bullish
The expectation that the price of a cryptocurrency will surge
ATH
Stands for ‘all-time high’ and represents the highest amount a certain cryptocurrency since its creation.
ATL
Stands for ‘all-time low’ and is the lowest amount a cryptocurrency was traded since its creation.
Altcoin
This is short for alternative coins. Altcoins are every cryptocurrency asides Bitcoin.
Market order / market buy / market sell
This is the simple buy or sell of a crypto on an exchange at its current price. Market buy purchases the cheapest crypto available on the order book while market sells fill the most expensive buy order on the books.
Margin trading
This refers to when a trader increases the intensity of a trade by risking the existing coins. Margin trading is very risky and is usually for experienced traders only. They also occur only on a few cryptocurrency exchanges.
Margin call
Max supply
This is the same as the total supply. It is the maximum number of cryptocurrencies created by the developers of a crypto.
Market cap
This is the total value held in a cryptocurrency. It could be in US Dollars, Bitcoin, or any other fiat currency. The market cap is measured by multiplying the total supply of coins by the current price of an individual unit.
ROI
Stands for ‘return on investment’ and it is the percentage of profit you make from your initial investment in a cryptocurrency project.
TA
This stands for ‘technical analysis’. Alongside fundamental analysis, technical analysis is used by crypto traders and investors to weigh the market before staking their money.
MACD
Short for ‘Moving Average Convergence Divergence’, it is a trend indicator that shows the relationship between two moving averages of prices.
Tokens
This is another term for coins or cryptocurrencies. They could be coins hosted on their own blockchain or on other blockchains.
ICO
Stands for initial coin offering. It is similar to IPO for stocks but in this case, a crypto company sells its cryptocurrencies to the general public and raises capital to fund its projects.
Pumping/shilling
A person advertising a cryptocurrency to create excitement around it.
Stablecoin
This is a cryptocurrency with very low volatility. Usually, these cryptocurrencies are tied to gold or to fiat currencies.
FOMO
It stands for ‘fear of missing out’. It represents the panic by investors who think they will miss out on good buying opportunities for a cryptocurrency.
FUD
Stands for ‘Fear, Uncertainty, and Doubt’. FUD is done to create panic and drag the price of a coin down.
Arbitrage
This stands for taking advantage of a difference in the price of the same cryptocurrency on two different exchanges.
Pump and Dump
This refers to an altcoin getting a lot of attention leading to a rapid surge in its price, which is followed by a huge decline in the price.
Bag Holder
Someone who still possesses an altcoin after the pump and dump period.
Bollinger Band
A margin around the price of a coin, which helps indicate when the cryptocurrency is overbought or oversold.
Cold wallet/ hardware wallet
A hardware wallet or cold wallet refers to devices that store cryptocurrencies securely. They are regarded as the most secure form of storage for cryptos.
Software wallet
This is storage for digital currencies that exists only as software files on a computer. Software wallets are generated from multiple sources including MyEther Wallet (MEW) and a few others.
Address
A place where cryptocurrency can be sent to and from. Cryptocurrency addresses are comprised of letters and numbers.
Ledger Nano S / Trezor
These are the major types of hardware wallets.
MEW
MyEtherWallet. A free site that can generate ethereum software wallets for you.
Hodl
This is the misspelled form of Hold, and it stands for holding your cryptocurrencies despite price decline or increase.
Liquidity
Liquidity is the amount of a cryptocurrency available for transactions at each point in time on a platform. The largest exchanges have high liquidity for most of the cryptocurrencies on their platforms.
Mooning
This phrase stands for the price of a cryptocurrency increasing dramatically within a specified time.
Bag
A large amount of specific crypto is regarded as a ‘bag’.
Bear trap
A technique used by a group of traders to manipulate the price of a cryptocurrency. The trap is set by selling a huge volume of the same cryptocurrency at the same time, deceiving the market into thinking there is an upcoming price decline. Other traders sell their stash, leading to a further decline in the price. Those who set the bear trap now take advantage of the lower price to repurchase the cryptocurrency at a lower rate.
Bubble
A scenario where investors and traders drive the price of a crypto above its value. A bubble is often followed by a rapid plunge in the price of the coin.
Bull trap
Similar to the bear trap, the bull trap is a false signal but in this case, the market is tricked into believing the price of the cryptocurrency is overturning after a period of decline.
Buy wall
A trader setting an order to purchase a large volume of a cryptocurrency once it reaches a certain price.
BTFD
Stands for ‘buy the fuxxx dip). It is an expression urging traders to buy a crypto when the price is down.
Candlesticks
This is a graphing technique that showcases the price changes of a coin over time.
Circulating supply
This is the amount of a cryptocurrency currently in supply. The circulating supply is usually the coins that have already been mined or released by the developers.
Coin
It can be used in place of cryptocurrency.
Cold storage
Offline storage of cryptos is known as cold storage. The popular cold storage methods include hardware non-custodial wallets, USBs, offline computers, or paper wallets.
Confirmations
Transactions are confirmed once they are added to the blockchain.
Co-signer
An individual or entity that has part control and access to a crypto wallet.
Cryptocurrency
Digital currencies that are decentralized, independent of government or any financial entity. Cryptocurrencies are managed by a community and serve as P2P currencies.
Custodial
This refers to the storage of keys of a wallet of an exchange.
Decentralized exchanges
These are P2P exchanges that enable users to buy and sell cryptocurrency and other assets without the use of any intermediary.
Derivative
This is a contract that gets its value from the performance of an underlying asset, index, or interest rate.
Derivatives market
A platform where derivatives are traded.
Deterministic Wallet
This is a type of wallet where the keys are obtained from a seed. The seed makes it easier to regain control of the account in case the key is lost or forgotten.
Digital currency
This is the same as cryptocurrency.
Distributed ledgers
This is where transactions on a blockchain are recorded. The transaction details are made public on a blockchain to boost transparency.
Dolphin
These are investors who do not own as much as whales but have enough crypto they are not regarded as minnow.
Double spending
A scenario where an amount of cryptocurrency is spent on more than one occasion. It is illegal in the crypto space.
Dust transactions
Tiny transactions that flood and eventually slow down the network.
Exchange
These are platforms where cryptocurrencies can be bought, sold, and traded with each other and with fiat currencies.
Exchange-traded fund (ETF)
A security that tracks a wide range of assets such as stocks, bonds, and cryptocurrencies but can be traded like a single stock
Fiat-Pegged Cryptocurrency
These are usually stablecoins that are pegged to fiat currencies. These cryptos are less volatile compared to the regular cryptos.
Fish
This is a term for investors and traders with a tiny reserve of a cryptocurrency.
Flipping
This is an investment strategy where you purchase something with the aim of selling it at a higher price later on.
FA
Stands for fundamental analysis. It is used by traders and investors to determine the directional movement of a cryptocurrency in relation to upcoming news.
Futures
This is a legalized contract to purchase or sell a particular cryptocurrency or commodity at a set price at a predetermined date in the future.
Gains
The profit made from cryptocurrency investment.
Gold-Backed Cryptocurrency
These are cryptocurrencies whose values are tied to gold.
Halving
A popular event in the crypto space where the total rewarded bitcoins per confirmed block halves. It happens at every 210,000 blocks mined.
Hard cap
This is the total amount an ICO project will raise.
Hierarchical Deterministic Wallet (HD Wallet)
These are wallets that use the Hierarchical Deterministic (HD) protocol to support the creation of crypto wallets.
Hidden cap
This is an unknown limit to the sum of money a team expects to receive from investors during its ICO.
Hosted wallet
Wallets managed by third-party entities.
Hot storage
This is the opposite of cold storage and it refers to storing cryptocurrencies online.
JOMO
Stands for ‘joy of missing out’ and it is the opposite of FOMO
Lambo
Short form of Lamborghini. It is used interchangeably with Moon in the crypto space.
MicroBitcoin (uBTC)
One millionth of a bitcoin or 0.000001 of a bitcoin
Miners
Those who solve complex algorithms to unlock cryptocurrencies and help approve transactions on a network.
Mining
This is the act of solving complex algorithms to unlock cryptocurrencies and help approve transactions on a blockchain.
Minnow
This is the same as fish and is used for investors and traders who own a minute amount of a cryptocurrency.
Mt. Gox
Mt. Gox was one of the first cryptocurrency exchanges. The platform crashed after over 850,000 BTCs were declared missing or stolen.
Multi-Signature (Multi-sig)
It is an extra layer of security that requires more than one key to initiate a transaction.
Off-Ledger Currency
A currency created outside its blockchain but accepted and used by investors and traders.
Offline Storage
This is the same as cold storage
On-Ledger Currency
A currency created on its blockchain but accepted and used by investors and traders.
Online storage
This is the same as hot storage
Open/close
The price at which a cryptocurrency starts trading at the beginning of the day and its closing price by the end of the day.
Option
An agreement that gives the investor the right, but not the obligation, to purchase or sell an asset at a predetermined price.
Options market
A public market where options trading is conducted.
Overbought
A situation where a cryptocurrency is purchased by more investors over time, with the price increasing during that period.
Oversold
A situation where a cryptocurrency is sold by more investors over time, with the price decreasing during that period.
Over the counter (OTC)
OTC are transactions made outside the crypto exchanges. They are usually P2P transactions and occurs in areas where exchanges are not allowed to operate.
Pair
Trade between one cryptocurrency and another. The BTC/XRP pair is an example.
Paper Wallet
A physical document that contains your private key or seed phrase.
Peer to Peer (P2P)
Direct transactions between the buyer and the seller, without going through an intermediary.
Ponzi scheme
These are fraudulent investment schemes where funds from new investors are used in settling old investors.
Portfolio
The collection of cryptocurrencies and assets owned by a company or an individual.
Pre-sale
A sale of cryptocurrencies prior to the ICO.
Private Key
A code generated in the asymmetric-key encryption process. It comes with the public key and is used in decrypting hashed information.
REKT
The short form of ‘wrecked’, which describes a huge loss from a trade.
RSI
The relative strength index is a technical
Satoshis
The smallest unit of bitcoin with a value of 0.00000001 BTC.
Satoshi Nakamoto
The pseudo-name of the individual or group that created Bitcoin. To this day, the identity of this individual or group remains a mystery.
Securities and Exchange Commission (SEC)
A United States federal agency charged with enforcing federal securities law, proposing securities rules, and regulating the securities industry. They also regulate the country’s stock and options exchanges and other related entities.
Simplified Payment Verification (SPV)
Refers to a lightweight client tasked with verifying blockchain transactions, downloading only block headers and requesting proof of inclusion to the blockchain in the Merkle Tree.
Shilling
This is enthusiastically promoting an ICO or a crypto project
Shitcoin
A coin with zero value and usage.
Soft cap
The minimum amount an ICO project wants to raise.
Spot
This is a contract or transaction for buying and selling cryptocurrencies for immediate settlement.
Spot market
A publicly accessible market where cryptocurrencies are traded for immediate settlement.
Symbol
This is the ticker of a cryptocurrency. Bitcoin is represented as BTC while Ethereum with ETH.
Taint
This is the percentage of the crypto in an account that can be traced to another account.
TLT
It stands for ‘think long-term’. It is given to long-term investors that think months and years ahead.
Ticker
An abbreviation used to uniquely identify the cryptos. It is similar to symbols
Timestamp
A display of the time and the day a certain transaction occurs on the blockchain.
Tokenize
This is the process whereby real-world assets are given digital value.
Total supply
The maximum supply of a cryptocurrency. This number is usually set during the development of the cryptocurrency by its creators. Bitcoin’s total supply, for instance, is 21 million coins.
Trade volume
The amount of a cryptocurrency that is traded within a certain period. This data is usually taken in different times such as 1 hour, 3 hours, 24 hours, 7 days, and a month.
TX
Stands for transaction and it is the act of exchanging cryptos on a blockchain.
Transaction fee
The cost charged for using the blockchain to transact
Unconfirmed
A transaction that is yet to be confirmed on a blockchain
Venture capital
A private equity given to fund small and early-stage companies with huge potential for growth.
Virgin Bitcoin
This term refers to a Bitcoin that has never been spent or used in any transaction.
Volatility
This is a statistical measure of the dispersion of returns and it is measured by using the standard deviation or variance between returns from that same security or market index.
Wallet
A term for where you save your cryptocurrencies
Wash trade
This is market manipulation by investors as they buy and sell the same cryptocurrencies to create artificial activity in the marketplace.
When moon
An extension of moon
When Lambo
Similar to when moon
Whitelist
A list of participants who showed an interest in an ICO
YTD
Stands for Year to date
Zero Confirmation Transaction
Another term for unconfirmed transactions
Weak hands
An investor that panic sells at the slightest price decline