Trading101: Top 10 Terms Every Crypto Trader Should Know

Welcome to Bitget – the world’s fastest growing crypto derivatives trading platform.

Is it complicated to be a crypto trader? What are the criteria for making money from crypto investing? In the following article, we will go through 10 key terms that all professional crypto traders know, but they are not familiar with new investors.

Don’t worry. Crypto investing is not rocket science. We are going to make it simple. They are quite useful if you want to keep up with the crypto market.

FUD (Fear, Uncertainty, and Doubt)

FUD is often a common strategy used in the financial markets. It aims to discredit a particular market, company, product, or project by spreading misinformation about it. So that fear can be raised in the market and those rumor mongers may profit from the decline in the stock price. 

FUD is also common in the cryptocurrency market. In many cases, investors may do short selling on an asset, which means selling an asset in the hopes of buying it later at a lower price. Then they release misleading information that discredits the project. Finally, they make a great profit from the decline in asset values.

One of the most common FUD in the crypto market is regulatory concerns coming from any national government. As crypto is a fast growing market, many countries have yet to announce laws and regulations on cryptocurrencies. Whether the threat is real or perceived, the cracking down action from governments on crypto transactions may raise the fear of investors.

FOMO (Fear of Missing Out)

Similar to FUD, FOMO is common in both the traditional financial and crypto markets. It is an emotion that investors are afraid of missing the investment opportunities that may bring in a great profit. 

Back then, on May 22, 2010, 10,000 Bitcoins could be exchanged for two pizzas in a pizza restaurant in Florida. About a decade later, the price of a Bitcoin reached an all-time high in February 2021, as values exceeded over 65,000 USD. What if the pizza restaurant kept the 10,000 Bitcoins and sold them in 2021?

Sounds familiar? Regret is one of the most powerful and common emotions of investors. They are afraid of missing the next Bitcoin that may skyrocket.

When there is FOMO by a large number of investors, it may lead to a great velocity for different asset prices as investors shift their money within the assets.  

HODL (Buy and Hold)

HODL comes from the misspelling of “hold”. It is an investment strategy in which traders buy the crypto intending to hold it for a long time even if there is a price drop.

This strategy is typically used in long-term investment portfolios without considering the entering timing. The investor may not be good at short-term trading but they focus on the investment potential of the crypto asset. They try to find undervalued assets and hold on to them for a long time.

You may think you are not familiar with short-term trading and fear of losing your capital. But we guess you still want to profit from crypto investing, like an expert trader. 

On Bitget’s One-Click Copy, you may choose an expert trader to follow by copying their trading movements, including what to trade, when to trade and the percentage of holdings. It can be carried out automatically and instantly.

There are 12K+ professional traders, with 380K+ followers so far. Our traders have earned over US$100M in total income, while our followers have collectively made over US$120M. Let’s start trading on Bitget now!

BUIDL 

BUIDL describes the participants of the cryptocurrency industry who continue to contribute to the development of the cryptocurrency no matter how the price fluctuates. They don’t take cryptocurrency as speculation and believe in the potential of cryptocurrency, which may be the infrastructure serving billions of people in the future.

You don’t need to have any technology background as a builder of the cryptocurrency industry. Through participating in the airdrop of a new project, which is a way of gaining attention and new followers for a new cryptocurrency project by distributing the token for free, to numerous wallet addresses. 

Bitget Launchpad is a new platform for launching new crypto projects and airdrops. It aims to discover more quality projects for users. You can buy or earn new tokens directly on Bitget Launchpad. 

ROI (Return on Investment) 

ROI is a way of measuring the investment performance of an asset. It’s a convenient way to compare the performance of various investments.

Here is the formula of ROI: (Current Value – Original Cost) / Original Cost = ROI  

Assume you invested various cryptocurrencies at the beginning of 2019, the ROI will be: 

AssetPrice in 2019 (USD)Current Value (USD)ROI
Bitcoin3441.0339468.35(39468.35 – 3441.03) / 3441.03 = 1,047%
ETH107.572611.46(2611.46 – 107.57) / 107.57 = 2,328%

Looking to get started with cryptocurrency? Invest in crypto on Bitget now!

CAUTIOUS: ROI is not the only factor of investment. It doesn’t reflect the risk, liquidity and the time of payback. Please consider your risk management ability before investing in the assets.

51% Attack

51% attack refers to an attack on the blockchain system by trying to control more than half of the total hashing power of the network.

If the bad users control more than half of the total network hashing rate for a blockchain, they are able to rebuild the consensus mechanism. The attacker would have the power to change the ordering of transactions, preventing the transactions from being confirmed. As they control the mechanism, they would also be able to prevent other miners from mining, leading to the so-called mining monopoly.

Luckily, most of the large blockchains like BTC and ETH have not yet suffered from the 51% attack. But it sometimes happens on some smaller chains. 

ATH (All-Time High)

ATH is the highest recorded price of an asset. For example, the ATH of Bitcoin so far was $68789.63 in 2021. This was the highest price that Bitcoin was traded on the market at that time. 

If the price changes at a sharp rate, the asset may end up in a sharp price drop. As many investors realize the uptrend may end very soon and they are rushing to exit from the market. Don’t forget the FUD and FOMO emotions in the market.

ATL (All-Time Low)

The opposite of ATH, ATL is the lowest recorded price of an asset. For example, the ATL of Bitcoin was as low as $33,000 on January 24,2021 before rebounding. But on November 8, 2021, Bitcoin hit its all-time high of nearly $69,000. 

Here is the ATL of Bitcoin in the previous year:

AML (Anti Money Laundering)

AML refers to the regulations, laws, and procedures preventing criminals from disguising their illegally obtained money as legal income.

There are several ways to conceal the source of the illegally obtained money in the complicated financial markets. For example, different complex market machinations such as the derivatives products made up of derivatives products may hide the true source of funds.

AML regulations require financial institutions such as banks to monitor the transactions of their customers and report on suspicious activities. This increases the difficulties of money laundering.

Bull Market Vs. Bear Market

Bull MarketBear Market
Market TrendMost assets are increasing in value.The economy is declining and most assets are dropping in value.
Investor’s Attitude Investors expect the price of assets to rise and are optimistic about the future of the market.Investors expect the price of assets to fall and are pessimistic about the future of the market.
EconomyThe growth rate of the economy increases.The growth rate of the economy slows down and the unemployment rate rises as companies start laying off workers.

The terms Bull and Bear Market are often used for the financial markets, including different kinds of assets such as cryptocurrency. In the Bull Market, the price of assets continues to rise while the price continues to fall in the Bear Market.

The trading strategies are different for the two markets.Investors usually go long in the Bull Market while they either go short or hold cash in the Bear Market.

If you want to know more crypto-trading information, follow us on Bitget Academy. We have constantly provided useful information for crypto investors, so that they can enjoy better trading and a better life.

Subscribe to our social media today!

Twitter | Telegram | LinkedIn | Youtube | Facebook | Instagram