From remittance to financial inclusion, cryptocurrencies bring great opportunities to the table. However, trading is what they’re best known for. In this article, we’ll walk you through some of the common terms that you may hear while trading cryptocurrencies.
Centralized Crypto Exchanges (CEXs) provide you with a platform where you can buy, sell, or trade cryptocurrencies like Bitcoin. You can simply use your credit card to change your fiat currency (i.e. dollar) to any coin you like.
Centralized Crypto Exchanges manage your assets for you which may leave you vulnerable to hacks and fraud. Therefore, it’s better to keep only a small amount of your assets on the exchange that you can afford to lose.
DIFX is a good example of a CEX that offers unique benefits to its users. DIFX uses Fireblocks, a digital asset custodian, to store and transfer its users’ assets. In this way, you don’t have to worry about your crypto being held by the exchange, as a reputable company is protecting them for you.
Cryptocurrencies use blockchain technology to facilitate the transfer of value between users. Details of each transfer are stored in a data structure called Transaction which then should be verified by the members of the blockchain (nodes). For this, you have to pay a fee which is called a Transaction Fee.
You may have heard about Ethereum’s high Gas prices which hit the headlines from time to time. Gas is a measure of costs on the Ethereum network and users need it to pay for their transactions.
A typo of “hold” that is now quite famous in the crypto world. HODL is a trading strategy in which owners don’t sell their crypto and hold on to it regardless of the price movements or market news.
It now stands for “Hold On to Dear Life”.
Fear, Uncertainty, and Doubt (FUD) is a tactic used to influence market members by spreading negative news and information. For example, imagine an investor that wants to buy Bitcoin. They start spreading false news about Bitcoin to cause Bitcoin holders to panic sell. Before you know it, the market price starts to drop which will give the investor a great chance to enter the market.
Fear Of Missing Out (FOMO). You’re not a member of the crypto market and you keep hearing about whopping profits people are making. Suddenly, you get this unsettling feeling that you’re the only one left out. That is what we call FOMO.
Joy Of Missing Out (JOMO) is the opposite of FOMO. Consider the same scenario but this time, you hear that the crypto market crashed 30% overnight!
Wrecked. In crypto trading, you get REKT if you lose a huge amount of money.
An unlucky person who’s left with a bag of losing assets.
Investors who own large amounts of cryptocurrencies. Their holding is so huge that if they decide to sell even a portion of it, the market could experience a crash. For example, this address is one of the largest Bitcoin whales which holds 123,752 bitcoins!
Algorithmic Trading or Algo Trading is a method of trading that makes use of a computer program to execute orders based on some predefined rules.
DIFX Algo Trading is a good example of this which allows you to automate trading strategies in cryptocurrency, forex, stocks, and derivatives.
This refers to a situation where a cryptocurrency’s price is increasing without a break. So “when moon?” means when the asset in question will experience such a price movement and “to the mean!” reflects the enthusiasm of the fans to make it happen!
Didn’t find the terms you were looking for? No worries. Let us know in the comments so we can cover it for you in our next episode.
You can also join our DIFX Academy to learn more about trading strategies, financial markets, crypto and blockchain fundamentals, and much more!