Cryptocurrency “Vital Terms” a Dictionary Won’t Teach You
When examining cryptocurrencies or watching Twitter, I think there are times when unfamiliar terms come up. In this article, I will explain the important terms within cryptocurrency that you may want to know.
Terminology 1: Pump-n-dumper
Pump-n-dumpers are traders for speculative purposes that swarm in as a group to a particular cryptocurrency to raise the price in the short term in the wake of some material. It is derived from the insect locusts of grasshoppers, the appearance of traders swarming in stocks suddenly comes from the fact that pump-n-dumpers resemble how rice crops look after they all leave. The chart of brands that these pump-n-dump traders generate draws a so-called “pump-n-dump tower.” Prices rise for a short stretch in a short period of time with great momentum, calling for a tower-like formation on a chart. The advantage of pump-n-dumpers is that they can hope for great profit in the short term. If you can buy and make a profit while the price is rising rapidly, you can profit in ultra-short periods.
But pump-n-dumping is also accompanied by risks. That is because there is great possibility that it may result in an unreasonable loss with a sharp drop in price for many participants if the material which became a trigger does not come the forefront or if they purchased after the ‘Tower’ was completed. In pump-n-dumps, let’s identify the ingredients and timing of purchase and let other pump-n-dumpers sell well while still is momentum.
Terminology 2: HODL
HODL is an abbreviation of “Hold On for Dear Life” and refers to holding on to purchased cryptocurrency until profit comes without being distracted by short-term price movements. Looking at Bitcoin as an example, in 2017 the price increased more than 10-fold, so if people who were so-called “HODLers” saw large value increases with their cryptocurrency assets.
However, this is a result theory, if you actually own cryptocurrency, many people are not able to do it because they are deceived by intense price fluctuations that cannot be imagined by the traditional stock market and exchanges. Also, depending on the timing of purchase it is necessary to consider holding the possibility of looking at the future of the currency and the market trend, because there are so many other factors to consider.
Terminology 3: Shit coin (LOL)
A shit coin is a coin that is worth as much as what its name implies. Most of the cryptocurrency market, which is said to have more than 1,500 kinds, is full of these “shit coins,” which is characterized by a small number of users trading and very low market capitalizations.
On the other hand, because the price is low, many tokens can be purchased for cheap; so if the price of the shit coin skyrockets, significant profit can be made. Cryptocurrency investing itself has much greater volatility than traditional financial products with high risk, high return, but shit coins are a pure gamble, so let’s do extreme due diligence before purchasing any.
There are many terms that are essential when talking about cryptocurrencies. Everyone remember these meanings and please try using them by all means.