As a beginner crypto investor, there are high chances that you may feel lost in the space. Both on crypto exchanges and even on social media, you would find that many expert crypto investors use words that may not be understandable by the rest of the public. This also applies to beginner investors who are still trying to figure out what coins to invest in and what projects to look out for. Luckily, this article will remove most of the confusion you may have as a crypto investor.
10 Crypto Terminologies You Should Know About
- Decentralised Exchanges
Decentralised exchanges are crypto exchanges that do not have a central authority. Instead, such exchanges are controlled by the users themselves and funds are also kept in the custody of users.
- Central Bank Digital Currency (CBDC)
A CBDC is a cryptocurrency or digital currency that is owned and issued by a government. Unlike other cryptocurrencies in the market, a government completely controls a CBDC. A CBDC has all the features of a real-world currency, only that it is digital.
- Bull Run
When investors mention a bull run in the market, it means that the values of cryptocurrencies are constantly rising in the market. So, for example, when Bitcoin reached $60,000 last year, everyone referred to the market as ‘bullish’, because investment funds were rising.
- Bear Run
A bear run is the opposite of a bull run. When markets are in a bear run, the value of cryptocurrencies is constantly reducing. At the beginning of 2021, Bitcoin’s value was reduced by more than half. The markets were bearish, as it also affected the value of other coins.
In the crypto world, ‘hodl’ is used to describe a situation in which crypto investors decide to hold on to their assets for a long time. This is the best way to gain huge returns on your crypto investment for many experts within the space. You may be thinking that ‘hodl’ is a spelling error. It isn’t.
- Day Trading
Day trading happens when investors sell their crypto assets to receive gains on daily price changes. Under this practice, investors hardly hold their crypto assets and they are more likely to jump on the next profitable coin.
Since the launch of Bitcoin in 2009, other coins have been called ‘altcoins’. These altcoins are alternative coins to Bitcoin, which is the biggest coin in the market. So basically every other coin apart from Bitcoin is an altcoin.
FOMO means Fear of Missing Out. It happens when crypto investors quickly buy or sell a coin because they are scared that they might either lose out on a big gain or lose their investments.
A crypto whale is an investor that holds a large amount of cryptocurrency. Because of the huge volume of crypto that these whales hold, their actions can affect the crypto market. This is why in all the times you might have heard about a whale in the crypto space, it is usually about how they moved their crypto assets and what the action means for the market.
In crypto language, a wallet is a storage for your crypto assets. These wallets can either be a cold or hot wallets. A cold wallet is usually offline and has a high level of security. On the other hand, a hot wallet is used for day-to-day transactions.
Being a beginner investor can sometimes be frustrating, as you may feel lost in the web of terms that you don’t understand. However, as you progress in the market, it is advisable to conduct more research on crypto terms. This will improve your understanding of the crypto market and community.