Crypto Trading Glossary of Terms

This crypto trading glossary is comprised of a wide array of commonly used terms relating to the cryptocurrency market and the world of digital asset trading.

To jump to a specific crypto trading glossary definition, simply click on the first letter of the word or phrase in question..

A

Airdrop

A marketing strategy that involves distributing tokens to the crypto asset’s target audience

Algorithmic Trading (Algo-Trading)

An automated trading system that places buy and sell orders using an algorithm.

Altcoin

Short for “alternative coins,” it refers to all coins other than Bitcoin

Annual Percentage Rate (APR)

The APR is the amount of interest that must be repaid on a loan each year. It is calculated by multiplying the periodic interest rate by the number of times per year that it is charged.

Annual Percentage Yield (APY)

The APY is the annual profit earned on a given investment, factoring in compounding interest.

Arbitrage

Arbitrage involves profiting from an asset being available at different prices simultaneously, by buying it on one market and then rapidly selling it at a higher price on another market.

Ask Price

The Ask is the lowest price that a seller will accept for an asset.

B

Bear Trader

A trader who believes that the market prices will drop.

Bid Price

The cost that someone is willing to pay for a security, asset, commodity, service, or contract is referred to as a bid price.

Bid-Ask Spread

The difference between the top price a buyer will pay and the lowest price a seller will accept.

Bitcoin ATM (BTM)

A cashpoint, or automated teller machine (ATM) for the purchase and sale of Bitcoin.

Bit (Bitcoin Unit)

A unit of measurement, referring to a millionth of a single Bitcoin.

Block

Blocks are the constituent parts of a blockchain. Each block is a file that contains data on transactions completed over a specific time frame.

Blockchain

A blockchain is a sequence of blocks of digital data, stored consecutively in a public database. This distributed ledger system serves as the basis for the creation of cryptocurrencies.

Bounty

A reward given in return for the performance of tasks relating to the operation or promotion of a blockchain or project.

Bull Trader

A trader who believes that the market prices will rise.

Burned

Coins or tokens that have been permanently taken out of circulation.

C

Candlesticks

A type of trading chart that presents price movements over time. Each candle provides data relating to high and low prices as well as the opening and closing price.

Central Bank Digital Currency (CBDC)

A cryptocurrency issued by a central bank, which, depending on government regulation, can have the status of legal tender.

Centralized

A system where one node, or a small number of nodes, controls an entire network.

Centralized Exchange (CEX)

A crypto exchange that is operated by a company, which has a centralized organizational structure.

Circulating Supply

The number of coins currently in market circulation and in the hands of the general public.

Coin

An individual cryptocurrency or a single unit of that cryptocurrency.

Cold Storage

Offline crypto storage using paper wallets, hardware non-custodial wallets, offline computers, or USBs.

Cold Wallet

A crypto wallet, not connected to the internet, in cold storage.

Crypto Debit Card

A debit card that enables its owner to purchase goods and services using digital currencies.

Crypto asset/ Cryptocurrency

A digital asset that operates as a decentralized application or currency using cryptographic technologies.

Cryptojacking

The use of another person’s computer to mine crypto, without their knowledge or consent.

D

Day Trading

The intraday buying and selling assets to profit from short-term fluctuations in price.

Decentralized

A system with nodes that work collectively in a distributed manner to achieve a common purpose.

Decentralized Applications (DApps)

An application that operates on a decentralized, peer-to-peer network, without a single controlling authority or reliance on a single computer.

Decentralized Exchange (DEX)

A peer-to-peer exchange enabling users to trade crypto without any middlemen.

Decentralized Finance (DeFi)

A distributed peer-to-peer financial services system not controlled by banks or institutions

DeFi Aggregator

A means of bringing trades from various decentralized financial platforms together in a single location.

Delisting

The act of removing an asset from a trading exchange.

DEX Aggregator

A blockchain-based service that enables crypto traders to take advantage of a range of financial tools, via a single interface, benefiting from greater liquidity and better prices on various crypto pairs.

Digital Asset

A form of content presented in a digital format, with a right of use.

Dump

A rapid asset sell-off

E

Emission

The rate at which new crypto coins are released.

ERC-20

A technical standard by which tokens are created and issued on the Ethereum platform.

Ether

The mode of payment used in the operation of the Ethereum platform.

Exchange (Crypto)

A platform where crypto can be traded for fiat money or other cryptocurrencies.

F

Faucet

A crypto reward system for completing certain tasks on behalf of a website or app.

Fee Tiers

The fee structure for depositing, withdrawing, and executing trades on a crypto exchange.

Fiat

A medium of exchange, legal tender backed by a central government, with its own banking system.

Fiat On-Ramp

A means of getting hold of cryptocurrency from fiat money.

Fiat-Pegged Cryptocurrency

A crypto asset issued on a blockchain, which is linked to a bank, or government-issued fiat currency.

Fish

A crypto investor with only a small investment amount.

Flash Crash

A situation where the asset price sinks rapidly within a very short period.

Flash Loan

A type of uncollateralized lending used in DeFi, where liquidity is borrowed and repaid in the same transaction or block.

FOMO

The acronym for “Fear of Missing Out.”

Fork (Blockchain)

A fork, or chain split, creates a divergence, splitting one blockchain into two that run simultaneously.

FUD

The acronym for “Fear, Uncertainty and Doubt,” a strategy of spreading negative or false information to impact the perception of a competitor’s crypto asset

Fungible

A token or coin that is not unique and can be replaced by an identical token or coin.

G

Game Channels

Game channels enable games and dApps to run off-chain securely and rapidly, allowing faster gameplay by eliminating wait times for block confirmations.

GameFi

GameFi, or play-to-earn (P2E) gaming, refers to games designed with economic characteristics of blockchain and crypto, enabling players to control their in-game assets and earn revenue.

Gas

The fuel of the Ethereum network, gas is a unit of measurement for calculating the computational effort of executing transactions or smart contracts and launching DApps via the Ethereum platform.

Gas Limit

The maximum amount of gas the user is willing to spend on a transaction on the Ethereum network.

Gas Price

The price the user is willing to pay for executing a transaction on the Ethereum network.

Gems

Undervalued, relatively unknown, low-cap coins with a massive amount of potential.

Governance Token

A token that provides voting power over decisions that impact a specific crypto ecosystem

Gwei

The denomination of Ethereum used to determine the cost of gas in Ether transactions.

H

Halving

An event where the total rewards for mining cryptocurrency transactions are cut in half.

Hard Cap

The absolute maximum supply of a crypto asset.

Hard Fork (Blockchain)

A protocol change, validating previously invalid transactions, and invalidating all previously valid ones.

Hardware Wallet

An offline crypto wallet, storing the user’s private keys, often resembling a USB stick.

Hash

The output of a hashing algorithm, which creates a unique, fixed-length string to encrypt a specific batch of data.

Hash Power / Hash Rate

A unit of measurement for the computing power the network consumes to maintain operations.

HODL

HODL, or “Hold On for Dear Life,” refers to a passive investment strategy where you hold onto a crypto investment over the long-term, regardless of any short or mid-term price fluctuations.

Hosted Wallet

A wallet that is managed by a third-party.

Hot Storage

Online storage of private keys enabling more rapid access to crypto capital.

Hot Wallet

A crypto wallet connected to the internet for hot storage, in contrast to an offline, cold wallet.

I

Infinite Approval

Using smart contract pre-approval to allow a platform to spend an unlimited amount of coins.

Initial Coin Offering (ICO)

A crowdfunding/ crowdsale strategy that uses cryptocurrencies to raise capital for start-ups.

Initial Exchange Offering (IEO)

A crowdfunding opportunity for crypto start-ups to generate capital through an exchange listing.

Initial Farm Offering (IFO)

A means for DeFi projects to raise capital through the farming feature in a DeFi exchange.

Initial Game Offering (IGO)

An opportunity to invest in gaming projects, as an early adopter, in the initial stages.

Initial Token Offering (ITO)

Like an ICO but focused on tokens that have intrinsic utility.

Instamine

When shortly after the launch of a coin a large part of the total supply is distributed to investors.

Institutional Investor

An organization, financial or governmental body that trades on behalf of its clients.

Interoperability

The capacity to view and share information across multiple blockchains.

Intrinsic Value

The complex calculation of an asset’s actual financial worth, as opposed to the current market price.

J

JOMO

JOMO stands for Joy of Missing Out (the opposite state to FOMO).

K

Know Your Customer (KYC)

KYC, short for Know Your Customer, refers to verification procedures performed by crypto exchanges and trading platforms to confirm the identity of their users.

L

Ledger

A record of financial transactions that cannot be altered, only added to with new transactions.

Leverage

A loan from a brokerage that enables a trader to control a far larger position than their capital allows.

Limit Order/Limit Buy/Limit Sell

Trading platform tools that automatically buy or sell crypto when a certain price target is hit.

Liquid Market

A platform with a large quantity of buyers and sellers, where all trades are executed easily, at low cost.

Liquidation

The conversion of crypto asset other assets into fiat money or its equivalents.

Liquidity

The ease with which an asset can be bought and sold without the overall market price being affected.

Liquidity Mining

A process by which participants loan their cryptocurrency to a liquidity pool, and are rewarded with tokens and a percentage of the trading fees, based on their share of the total pool.

Liquidity Pool

Funds locked in a smart contract to facilitate the trading of crypto assets on a decentralized exchange.

Liquidity Provider

A decentralized exchange user who funds a liquidity pool with the tokens they hold.

M

Margin Call

A demand from the broker to deposit funds if the trader’s balance falls below the maintenance margin.

Margin Trading

Trading assets by using funds that have been borrowed funds from the broker.

Market Capitalization/Market Cap/MCAP

The total value of all the mined coins, which is calculated by multiplying the number of coins in circulation by the current market price of one coin.

Market Maker/Market Taker

A market maker is a liquidity provider buying and selling at a quoted price, while the market taker accepts that placed order at the quoted price.

Market Order/Market Buy/Market Sell

The process of buying or selling a digital asset on a crypto exchange at the best available current price

Max Supply

The maximum number of coins that will ever be created of a specific cryptocurrency.

Meme Coin

A type of coin initially created as a joke meme, claiming to offer huge gains; for example Dogecoin.

Metaverse

A digital universe that represents the real world, with virtual interactions and economic systems.

Mining

The process of adding blocks to a blockchain and verifying transactions and the way new coins like Bitcoin are created.

Mining Farm

A collection of miners, who are mining together to conserve resources.

Mining Pool

The pooling of resources by a group of miners to increase their chances of finding the next block.

Minting

The process of creating new coins using the proof-of-stake (PoS) mechanism and putting them in circulation.

Moon

A scenario where a cryptocurrency is on a continuous upward price trajectory.

Multi-coin Wallet/ Multi-chain Wallet

A wallet enabling users to simultaneously store digital assets from multiple blockchain networks.

N

Network

A network is a collection of all a blockchain’s operational nodes, at any point in time.

Node

Nodes store data and are the basic units of blockchain infrastructure.

Non-Fungible Token (NFT)

Non-fungible tokens are unique digital assets, such audio, video, photos, drawings and trading cards.

O

Off-Chain

A transaction processed faster and more cost-effectively outside the blockchain.

Option

A contract that allows but doesn’t oblige the owner to buy or sell an underlying asset at a specified price before a future date.

Oracles

A party that finds and verifies data, delivering it to smart contracts to enable their execution

Order Book

Electronic documentation of asset’s buy and sell activity

Over-collateralization (OC)

The request for collateral valued far above the amount necessary to cover potential losses in the case of a loan default.

Over the counter (OTC)

A transaction made through private trades as opposed to through an exchange.

P

Pair

Trade between two currencies, such as the trading pair BTC/ETH.

Paper Wallet

A physical document that contains the holders seed phrase or private key.

Passive Income

Revenues that are generated by investments that do not require the active involvement of the earner.

Peer-to-Peer (P2P)

Within a distributed network, P2P refers to the interactions and division of tasks between parties.

Pegged Currency/ Stablecoin

A currency with its value pegged to a real-world asset, such as a fiat currency like the US dollar.

Permissionless

A system where no single entity can control or regulate who can use the system and how they can use it

Play-to-Earn (Play2Earn)

A business where players who bring value to a metaverse are rewarded financially.

Player Payout

A new means of automatically rewarding game participants as soon as the tournament ends.

Private Key

Used with a public key to facilitate crypto transactions, it decrypts the data hashed with the public key.

Proof-of-Stake (PoS)

A blockchain consensus mechanism for processing transactions and creating new blocks.

Proof-of-Work (PoW)

A blockchain consensus mechanism for validating transactions and creating new blocks, requiring comple math problems to be solved.

Protocol

The rules defining network interactions like consensus, transaction, and validation.

Public Address

Used as an address to receive payment, it is the cryptographic hash of a public key.

Public Key

A series of alphanumeric characters, the public key is used to facilitate crypto transactions. It verifies the digital signature, which proves ownership of the private key.

Pump and Dump (P&D) Scheme

A type of scam where the price of a coin is artificially inflated price with misleadingly positive messages.

Q

Quorum

A quorum is the minimum membership of a group that must be present, or providing their vote remotely, in order to validate proceedings.

R

Rebase

A token enabling the circulating supply to automatically adjust in accordance with price fluctuations.

Rug Pull

A form of fraud where developers abandon a project and disappear with the investor’s capital

S

Satoshi (SATS)

The tiniest denomination of bitcoin with a value of 0.00000001 BTC.

Satoshi Nakamoto

The unknown person or group responsible for creating Bitcoin.

Security Token

A tokenized share of an asset, a security token is a digital tradable financial instrument holding monetary value, as opposed to a utility token that has value tied to a use or function.

Slippage

Slippage occurs when a sudden price movement requires the trader to settle for a different price.

Smart Contract

A computer protocol meant to facilitate, verify, or enforce a blockchain contract without third parties.

Soft Cap

The minimum capital that an initial coin offering (ICO) hopes to raise.

Soft Fork (Blockchain)

A software protocol upgrade where only previously valid transactions are invalidated.

Spot

A contract to buy or sell a crypto asset for immediate settlement, as opposed to a futures contract, where settlement is due at a later date.

Stablecoin

A type of crypto asset with exceptionally low volatility like gold-backed and fiat-pegged cryptocurrencies.

Staking

Participation in a proof-of-stake (PoS) system to put your tokens in to serve as a validator to the blockchain and receive rewards.

Staking Pool

A mechanism for enabling participants to pool their resources and increase the size of their rewards, by offering more staking power to the network to validate new blocks.

Stop-Loss Order

A tool that enables investors to set the lowest price at which they are willing to sell an asset and trigger an automatic sell order if this target is hit.

Swing Trading

A strategy for profiting from short to mid-term price changes, over a period of days or weeks.

Symbol

The ticker for a digital currency, such as ETH, the symbol for Ethereum or BTC, the symbol for Bitcoin.

T

Ticker

An abbreviation, used to refer to a unique cryptocurrency, such as BTC, the symbol for Bitcoin.

Timestamp

A means of verifying when a specific transaction was executed.

Token

A digital unit that enables the holder to access and use a broader crypto economic system

Token Economy

An economy of goods and services able to function without middlemen, using blockchain technology.

Token Issuance

The process of issuing new tokens to be added to the cryptocurrency’s total token supply.

Token Lockup

A period during which tokens are inaccessible and cannot be exchanged or traded.

Token Sale

The initial offer of a crypto token to a private pool of investors before it goes on the market officially.

Tokenize

The process of converting a real-world asset into a token, an asset with digital value. It is then divisible, so ownership of a portion of the asset’s value can be divided between a few token holders.

Total Supply

The total amount of coins that currently exist, minus those that have been burned

Total Value Locked (TVL)

Тhe TVL refers to the amount of crypto assets currently being staked in a given protocol.

Trading Bot

An automated program that trades on the user’s behalf, executing pre-coded strategies.

Trading Tournament

Cryptocurrency trading campaigns that are created and run by exchanges for the purpose of incentivizing users to trade more to win rewards, such as tokens and wallets.

Trading Volume

The amount of the cryptocurrency that has been traded over the last 24-hour period.

Trustless

A trustless environment is one where there is no centralized controlling authority.

Two-Factor Authentication (2FA)

A security measure that requires two separate modes of authentication to access data.

U

Unbanked

Individuals who are disinclined or unable to access banking services.

Utility Token

Tokens that have been created to help people use a specific product or service.

V

Validator

A person who receives rewards for validating blocks on a proof-of-stake (PoS) blockchain.

Volatility

The measure of how much an asset’s price has fluctuated over time.

W

Wallet

A virtual purse that can be used to store send and receive crypto assets.

Weak Hands

The type of investor that tends to panic sell at the first sign of a price drop.

Wei

The smallest denomination of Ethereum (one quintilionth).

Whale

An investor who holds an exceptionally large amount of crypto, which is sufficient to enable them to manipulate the market price.

When Moon

A phrase that refers to the question of when the price of a cryptocurrency will shoot up.

Y

Yield Farming

A means of earning interest and other rewards by lending or staking cryptocurrency in decentralized financial markets.

Z

Zero Confirmation Transaction

A transaction that has not been recorded or verified on the blockchain

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