Crypto is a world unto itself. Not only it has its own currencies - obviously! - it also has a peculiar lingo, which can often confuse a newbie trader. For example, are you afraid of whales? Do you find it easy to scalp without suffering from FOMO if your token moons after you exit a trade?
Here’s a quick guide to get you through the linguistic pitfalls of the crypto trading world:
HODL - The act of buying a coin and keeping it in a portfolio for a long period of time, through high and lows, waiting for its value to increase.
The term is mostly used for Bitcoin, the main cryptocurrency in circulation, and it originated from a typo on the Bitcointalk forum back in 2013. As the price of Bitcoin tanked by 39% in a day, one user named GameKyuubi wrote: "I AM HODLING. I type d that tyitle twice because I knew it was wrong the first time. Still wrong. WHY AM I HOLDING? I'LL TELL YOU WHY. It's because I'm a bad trader and I KNOW I'M A BAD TRADER.”
The rambling rant, full of mistakes and typos, went viral. The term hodling was born.
As of 2020, it turns out the writer might have been a bad trader, but was probably quite a good investor. The price of Bitcoin back then was ranging between $400 and $700. Today it is over $10,000.
FOMO - The “Fear of Missing Out”, while not unique to the world of crypto, is particularly prevalent among investors and traders. And how could you not be afraid of letting an opportunity slip through your fingers when the value of some coins can grow exponentially in a matter of days?
FUD - “Fear, Uncertainty, and Doubt”. Should you sell before the numbers get even worse than they already are? Or maybe this is the bottom and you should buy the dip? And what about those altcoins that seem to be doing so well? You may want to buy them - but what if they turn out to be a bad investment…
These and many more are instances where you can suffer from FUD, the feeling of uncertainty and fear that can sometimes take hold of a trader, especially when prices make big moves.
Moon - When a coin “moons” or “goes to the moon” its price is rising fast. In the crypto world, you will often find investors asking “when moon?”, wondering when their holdings will increase in value. (A particularly important issue for hodlers.)
Bitcoin famously “went to the moon” in 2017, when its price skyrocketed from under 1,000 to over 19,000 in 12 months.
Stablecoin - Welcome to the world of crypto trading, where volatility is king. Traders, of course, like volatility - if prices did not move, there would be no way to make money fro trading assets. But too much volatility makes most crypto unsuitable for one of the main functions played by fiat currency - as a medium of monetary exchange. The public is not likely to use a coin that can be subjected to huge swings in price even on an hourly base to buy and sell products.
Enter the stablecoins, whose price is pegged to fiat currencies, allowing them to remain relatively steady over time.
Whale - No these are not the massive, often endangered species populating the world’s oceans. In crypto lingo, a whale is an asset holder large enough to be able to sway the market by either buying or selling tokens.
Whales are not retail traders’ best friends. And not just because you might be jealous of their portfolios, but because smaller players often accuse them of manipulating the market in their favor.