Finance and cryptocurrency terms are almost like a new language; they’re so many of them with different meanings that it can be tough for new investors to get into. A lot of these terms are a part of the meme culture that is prevalent in these financial circles and can be really esoteric which is why I want to list some of the slang words, ideas, and terms that you may not be familiar with.
This may not be every single word or meme in the crypto lexicon, but it’s a great starting point to get you introduced to the language of retail investors and look smart doing so.
DeFi — It’s short for Decentralized Finance which is the system that cryptocurrency exists on. It’s a system written on blockchains that allows crypto buyers, sellers, and borrowers to interact with each other (peer-to-peer) free from a central bank or company. Uniswap is one of the biggest systems.
Diamond Hands — It’s a rallying call common in crypto-circles referring to the idea that you don’t sell in a Bear Market. You hold on tight to that asset with an “unbreakable” grip. You ride out the lull in the market until the price goes back up, and with cryptocurrency, it usually does after a while.
— DOGE ARMY Europe (@TeamDogeEurope) July 26, 2021
The opposite of this is weak hands, someone who sold their crypto in a panic.
Fiat — This refers to fiat money which is a currency issued by the government, like the American Dollar, that is not backed by a commodity, but the government itself. It’s a currency issued and governed by a central bank; the opposite of cryptocurrency.
FUD — It stands for Fear, Uncertainty, and Doubt. It’s a term adopted by crypto-supporters to denounce what they see as misinformation trying to cast doubt on an asset.
FUD is not good. FUD is bad. Don’t spread FUD.
This write up will be dedicated for debunking common FUD in crypto I see all too often.
A thread by 🥐…
— croissant (@CroissantEth) July 23, 2021
HODL — It’s a purposeful misspelling of the word, “hold” but it’s also an acronym for “Hold On [for] Dear Life.” It means the same as Diamond Hands, a rallying call to not sell.
Short-seller/Short selling — A short seller is an investor who borrows a stock or asset from a broker with the belief that it will decrease in value. The investor then sells the borrowed stock to a buyer. If the price of the stock continues to go down, the buyer (usually) sells the stock back to the investor to recuperate some losses. The investor returns the stock to the broker and the money lost from the time of borrowing to its return is given to the investor. The whole process is short selling. Educational Youtuber The Plain Bagel explains it in detail.
Short squeezing — Short squeezing is the opposite of short selling where the price of the stock goes up instead. The buyer (usually) keeps the stock and the investor now has to give the money earned from that increase to the broker. But the investor doesn’t have the money from that increase and must use their own money to pay the broker. Short selling is incredibly risky because the investor could stand to either gain a lot or lose a lot of money. This Investopedia video explains it in detail.
Stonks — Stonks is a silly and deliberate misspelling of the word, “stocks.” Some people use stonks to refer to a share losing money. A superstonk usually refers to GameStop stock, a popular asset among retail investors, but it also means a popular stock.
The cryptocurrency community is also filled with surreal and esoteric humor.
I hope this guide served well as a starting point in understanding the bizarre culture and language in the cryptocurrency community. I’m sure with this new found understanding that you’ll have diamond hands in no time.