Investment is something that every person needs to do. No matter in which age group or income group you are in. Especially these days when there are so many ways of investing is open. And one of those is cryptocurrencies. Nowadays it is the most famous way of investing your money.
For any kind of investment, the first thing to do is research and to do so you need to know different kinds of terminologies that are used in that particular market. Certain lingo is highly unique to the digital currency, making it unlikely that traders would have picked it up when studying other asset classes like stocks, bonds, and commodities.
With this article, I will try to guide you through the most commonly used crypto terms.
This word is very common in the financial market. In the stock market as well as crypto market this term means the same. Arbitrage refers to taking advantage of the price difference between two different exchanges. If bitcoin is selling for £8,950 on one exchange and £9,000 on another, a trader can buy the digital currency on the first exchange and sell it on the second for a modest profit.
This term is widely used in the crypto market. But many people get confused with the meaning of it. In simple words, Cryptography is basically the process of encoding and decoding information so that would-be observers are unable to understand the information being sent.
* Long position
This term is also used in the stock market as well. Going long, also known as taking a long position, means making a wager that an asset will rise in value. If a trader purchases a digital currency like bitcoin, for example, they are making a bet that the cryptocurrency will appreciate.
* Short position
This the exact opposite of the term long position. Shorting an asset, also known as taking a short position, means making a bet that the asset will fall in value.
* Pump and dump
This is a technique that is highly popular in cryptocurrencies. As the name suggests, a market participant or several works together to increase the price of an asset so they can sell it when its value is artificially high.
This term is given to the stocks whose prices are rising sharply or are on the moon.
For example, a crypto trader could talk about how an altcoin is going “to the moon!”
* Market Cap
Market cap is short for market capitalization, which is a term for total market value. The market cap of bitcoin, for example, is the number of BTC outstanding multiplied by the digital currency’s price.
These were some of the most commonly used terms in the crypto market. If you are a beginner and wanted to earn more about the basics of cryptocurrency then you can check out cryptoemotions.com.