For those who are unfamiliar, understanding the terminology used in the world of cryptocurrencies can be a real challenge. The crypto sector is scarcely to blame for this since it only exhibits behaviour typical of any emerging movement, be it the AI or a steam engine. You can always try to make an effort to catch up with at least the most popular of these, and the guide we give to you here is aimed as a useful point of reference, even though cryptocurrency phrases are hardly the stuff of dictionaries and standard definitions found in them.
What Does HODL Mean?
In essence, “HODL” refers to holding on to one’s cryptocurrency tokens during times of high market volatility, especially if you buy them as part of an intended buy-and-hold strategy. It is a perfect example of how some of the popular cryptocurrency words were formed off-hand. You might think of HODLING as acting like Ebenezer Scrooge with your tokens, either as a result of general worry or as a component of a bigger investment plan that calls for you to be inactive at a specific time. Whoever swears by hodling believes that keeping your tokens in reserve today will turn out to be a successful move in the future, i.e. when their price increases.
The phrase was retroactively transformed into a backronym that purports to mean “Hold On for Dear Life,” which adequately captures both the mindset and the behaviour.
The phrase actually has a more humble beginning, first appearing in a bitcoin forum post by a GameKyuubi user who was purportedly intoxicated at the time and blissfully ignorant that he was inadvertently establishing a global crypto mistake for posterity.
What Does Bearish and Bullish Mean?
The adjectives “bullish” and “bearish,” which crypto experts and novices alike frequently use to describe the present status of the market, have a tenuous connection to the aforesaid HODL-ing. Actually, the origins of both names may be found in the trading lingo used on Wall Street. A market that is “bearish” is one that is driven by expectations that the price (or prices) of a certain currency would increase. By example, a “bullish” market describes the prevalent attitude of expectation that a specific price will decrease.
Similar to this, the terms “bulls” and “bears” can occasionally refer to a specific kind of person commenting on the status of the market. A bear in this instance would be someone that acts pessimistically and may indulge in HODLING because they anticipate the price to drop. Bulls have higher expectations for the prices and, hence, for their ability to profit from price increases.
A bullish “whale,” often known as a wealthy individual who makes hazardous token purchases based on personal optimism, ignorance of the market, or as a result of peer pressure, is a subspecies of the bull. Those falling prey to larger predators and carrying smaller quantities of cryptos in their wallets are often referred to as “fish,” whereas a less wealthy form of a “whale” is sometimes dubbed a “dolphin.”
In any event, bears also need to be concerned about bear traps. By selling a specific asset in large quantities all at once, this approach artificially creates the perception of an impending price reduction in the market. Unaware traders typically respond by selling assets in large quantities, which eventually drives down the price of the asset. The trap is established when the conspirators repurchase the targeted asset at a reduced cost, hoping to profit from the ensuing, usually inevitable price recovery.
What Does FOMO Mean?
Another expression that has become increasingly common in the cryptoverse is FOMO. Its meaning is rather clear because it stands for the “fear of missing out,” unlike some of its rivals. This is related to market movements once more because those who are suffering from FOMO fear missing out on the opportunity to profit from the anticipated increase in the value of a certain cryptocurrency. When someone has FOMO, they typically begin to acquire something hastily, frequently falling into a trap designed for them by people looking to manipulate the market.
The phrase “JOMO,” which stands for the “Joy of Missing Out,” is derived from this. This alludes to the happiness cryptocurrency sceptics may experience in not having to worry about unexpected price drops, con artists, thefts, etc. These people are occasionally referred to as “no-coiners.”
Other Popular Terms
Airdrops have something to do with “campaigns,” which fortunately rely on marketing rather than planes and guns while having a moniker that seems more appropriate for a military manoeuvre. The phrase describes the giving out of tokens to individuals in order to encourage their use and acceptance. Receiving tokens as part of an airdrop typically entails a demand to post reports about a token online, refer users and friends, etc. because no meal is ever completely free.
Supporting atomic swaps means removing the requirement for a centralised third-party platform like a cryptocurrency exchange and enabling users to directly trade one cryptocurrency for another across different blockchains or outside of them (off-chain).
KYC and AML
These terminologies, which are frequently used in the context of crypto laws, are genuine legal terminology. The term “know your customer” (KYC) refers to a requirement for organisations, especially those dealing with cryptocurrencies, to confirm and validate the identity of their clients, whether they are small-scale investors or individual users.
AML (anti-money laundering) rules, which outline the steps to be followed to prevent utilising cryptocurrencies as a weapon for fiat currency money laundering, are closely tied to KYC procedures.