Crypto Terms You Should Know
One of the most confusing parts of joining the blockchain revolution is the many unique terms and phrases used by traders. Terms like REKT and HODL can seem like a foreign language to a new trader. Luckily, it doesn’t take too much to learn the key terms used in the market today. Here are the top crypto terms you should know.
Hold On for Dear Life is a term used to describe those that are long-term project holders. HODLers are mostly found in the Bitcoin sector but every project has some die-hard believers that are willing to hold on to the coin no matter how low it goes. HODLing can be trying and at times depressing. However, studies have shown for the average Bitcoin trader, HODLing is the most profitable option.
Thankfully, HODLers have more options than ever. Users can leverage advanced DeFi systems like staking protocols to secure passive returns without the risk of losing their original assets. You can even use your saved asset as collateral to mint other tokens and unlock liquidity. For those who have +$30k stored in a single Bitcoin, this option is a game changer.
The Fear of Missing Out is another popular term that has managed to make its way into mainstream media. This term describes the emotion you get when you see a project making positive moves. Untrained traders will often fall victim to FOMO and go all-in on questionable projects due to their lack of emotional control and experience evaluating platforms.
FOMO is dangerous because it taps into your natural emotional response. Nobody wants to miss the bandwagon and when discussing tech markets like crypto, where millionaires are made daily, the FOMO can get heavy. Mastering trading takes controlling your emotions.
Those who want to trade but can’t seem to get over their urges do have some options. They can seek out trading bots. These programs enable you to preset trading parameters that execute when the conditions are met. Trading bots eliminate emotion from the equation and they provide 24/7 market monitoring.
Fear, Uncertainty, and Doubt are three things that can cause a trader to dump their bags. New traders are often speculative in their goals. They are simply seeking to get some quick profits. The problem with this approach is that they don’t understand or research the long-term merits of the projects they trade. As such, they are quick to dump all of their holdings at the slightest whim of bad news.
FUD has become a major issue for the market as social media has become more prevalent. Nowadays, a Tweet from a well-known businessman or celebrity can cause an entire project to take massive losses. FUD combined with the influence social media has on the market makes for instability.
The best way to overcome FUD is to only trade projects that you trust. Projects like Bitcoin, Ethereum, META 1 Coin, and many others have proven their merits in the market. Take the time to understand why they are successful and what they bring to the table. That way, if the market conditions change, you have faith in the long-term viability of the projects you hold.
Safehaven tokens are on the rise in 2023. These advanced digital assets take the best aspects of stablecoins and combine them with advanced network protections. Safe Haven tokens can include smart contracts that prevent whale manipulation or protect asset value.
The META 1 Coin is a prime example of a popular safehaven token operating today. The network prevents bots and non-humans from entering the DeFi ecosystem. Additionally, it has an asset protection mechanism that cross-references all trades against the reserves to ensure no market dumps occur.
Safehaven tokens provide a new level of stability to the market. They leverage reserves. In the case of META 1 Coin, the token derives value from a basket of gold-related assets. This strategy provides the tokens with self-appreciation over time. When coupled with other network DeFi options, it’s easy for users to generate low-risk wealth over time.
Decentralized Exchanges are growing in popularity in the market. These open platforms enable anyone to trade certain digital assets. Unlike CEXs, DEXs enable anyone to launch tokens. This openness offers more opportunities for both startups and traders. However, it does mean that you are responsible for vetting firms before trading them.
DEXs are often non-custodial which means they don’t require you to upload your crypto to participate in the network. This structure means that you aren’t separated from your assets. As such, DEXs are safer from hacking, company theft, and even government confiscations.
The term no coiner is used to describe someone who is anti-crypto. No coiners will often complain about the same issues with the market such as velocity and no regulatory framework. They will claim to understand the technology but will be unable to explain the simplest concepts regarding blockchain networks.
It is best to not try and convince no coiners as many of them are now emotionally invested in the debate. The best way to handle a no-coiner is to continue on your path and let your success speak for itself. No coiners are a lot like people that didn’t believe in the internet when it came out. Sadly, they may never be convinced otherwise.
A Bitcoin MAXI is a person that believes that Bitcoin is the only cryptocurrency project that matters. Bitcoin maximalists religiously believe in the world’s first cryptocurrency. They don’t care how technologically inferior the network becomes because to them, Bitcoin is more than a monetary system, it’s a way of life.
Dealing with Bitcoin Maxis isn’t that hard. The main thing to do is avoid debating with them on the merits of projects. They aren’t going to change their mind. However, Bitcoin maxis serve a vital role in the market as they are the core of the crypto movement.
The term shill refers to a write-up where a project is touted as the best thing to hit the market. Sadly, you can find a lot of shill when researching crypto projects. It’s been that way since day one and will remain as such due to the competitive nature of the industry and the lack of understanding surrounding the tech by new traders.
There are a few ways to tell if the project you are researching is providing shills. The first thing you may notice is the use of CAPS or exclamation points. For example, if you were to see “XY coin is the BEST project to hit the market this year!”, with no other data to back up the claim, it’s obvious shill.
Satoshis are the smallest form of Bitcoin available currently. Sats are finding new life thanks to a host of recent technological upgrades to the Bitcoin ecosystem. It used to be too expensive to send small amounts of sats to people. However, the Lightning Network changed everything with its low cost and speedy transactions.
Sats have recently got another boost thanks to the introduction of Ordinals. The ordinal protocol enables users to inscribe data on Sats directly. This information is then etched into the Bitcoin blockchain forever. Notably, the ordinal theory isn’t recognized by the entire Bitcoin community which ensures it doesn’t disrupt the tokens’ fungibility.
The term REKT describes when your trade goes south. Trading crypto takes some experience and skill. The average person will disregard these prerequisites and jump right into the market. When you combine this lack of knowledge with FOMO, you get the perfect recipe to get Rekt.
There have been multiple occasions this year where traders got Rekt due to circumstances out of their control such as the massive FTX exchange collapse. The important thing to remember is that if you trade long-term projects or safehaven tokens, you can be more confident in their stability and growth.
Whales are the largest traders in the market. They can control millions and even billions in funding. These major traders hold so much funding that they can use their weight to influence projects. When operating in the Bitcoin market, they can create some waves, but whales get dangerous when they enter smaller projects.
A perfect example of a whale creating a headache for a project occurred when the LUNA/UST crash occurred. UST began to lose its peg which caused LUNA holders to panic. One trader held around 5% of the total LUNA supply. The market dumped their bags which then kicked in a wave of bots dumping their holdings. At the end of the process, LUNA was down 94% in 24 hours.
The term pump and dump is one of the oldest in the market. This term refers to a common form of whale manipulation in which a trader or group of traders will suddenly pump the value of a project up by making massive buys. The goal is to make the project look like it’s about the moon.
Once the momentum for the project begins to swing up the dump comes into play. The plan depends on new traders who aren’t experienced to see the scheme succeed. These new traders, driven by FOMO, hop onto the project and buy the tokens that the original traders are cashing out.
Suddenly, the original traders will sell all of their holdings in an instant. The speed and timing of the dump are coordinated to enable them to get rid of their tokens at the highest value possible while the new traders buy at the highest prices right before the token value plummets leaving them holding the losses.
A bag holder is a trader that’s left at the end of the dump. These are the people that are left with a bag of worthless tokens. In some instances, people have had their entire life-saving vanish overnight due to a massive dump. As such, it is wise to set up your trading to prevent these losses.
One of the best ways to not get left holding the bag is to set up stop losses on your account. These options can automatically sell your tokens if the market has a certain value. Bots are another smart way to prevent waking up to massive losses. Of course, the bet option is to use a token that is stable such as safehaven coins.
Non Fungible tokens are one of the fastest growing sectors in the industry. These digital assets have changed the market forever. Non Fungible tokens can represent individual items on or off-chain. They are extremely flexible and have been used for everything from collectibles to art and digital IDs.
NFTs are one of the most exciting areas of the market and these tokens find new use cases daily. The expansion of the metaverse has added extra value to these assets as they enable people to bring items in and out of the digital realm while still being able to authenticate the assets in seconds.
Crypto winter is the term given to a long period of a market downturn. There have been many crypto winters and all of them have thawed into bull markets. The main thing to understand about a crypto winter is that altcoins get hit the hardest. It is during these times that most traders start with the largest, most established projects.
Crypto winters can be brought on by many factors including major exchange failures, regulatory biteback, and hacks. There have been crypto winters that have lasted years and taken 80% of the value from the market. Crypto winters may seem like a bad thing but they are an essential part of market growth as they help to show the true bottom for projects and lock in value.
Now that you have a better understanding of the top crypto terms you need to know, you’re ready to hit the market running. There are lots of great projects in the market today. Finding the right one can lead to exciting ROI opportunities. Be sure to DYOR (Do Your Own Research), avoid FOMO, and success will not be far away.