Cryptocurrency Jargon: A Guide for the Crypto-Curious
Personal finance can be confusing and investing in stocks can be intimidating for the uninitiated. Trying to understand buy points, dollar-cost averaging, cup and handle patterns of stock prices and other elements of stock marketing investing — not to mention the various indices that reveal market trends — often requires a lot of study or guidance from an expert.
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And then cryptocurrency investing storms onto the scene with a language all its own, largely driven by retail stock investors, millennials and social media. Some of the jargon applies to stocks, as well, as it was borrowed from meme-stock investors and bandied heartily on the Reddit sub-thread /WallStreetBets during the GameStop stock frenzy.
Here’s your guide to crypto jargon, so that whether you choose to invest or not, you’ll know what Elon Musk means when he pumps his fist to the sky on “Saturday Night Live” and declares, “To the moon!”
Diamond hands – When a crypto or stock investor has “diamond hands” it means they will hold onto their coins or shares even as the value drops. On March 19, amidst Bitcoin plummeting from over $45,500 per coin to under $40,000, Tesla TechnoKing Elon Musk tweeted “Tesla has” with emoji for “diamond” and “hands.” He credited the statement to Tesla’s “Master of Coin.”
Paper hands – On the other hand, someone with paper hands may sell stock or coin too early, losing out on unrealized profits. The analogy comes from poker, where someone may “fold,” or exit the game, if they believe they aren’t going to win.
HODL – Pronounced Ha-dill (rhymes with model), HODL means someone who doesn’t intend to sell their crypto or stock. The term originated in a Bitcoin forum in 2013 when someone misspelled the word “hold,” declaring “I AM HODLING.” The word also applies to meme-stocks.
Whale — A whale describes someone who holds a large percentage of a specific crypto. Investopedia writes that the top 20% of bitcoin holders own more than 80% of bitcoin. When these companies choose to sell coin, it can affect the market more than the singular actions of most investors. Surprisingly, Tesla is just on the cusp of being considered a whale, and the electric vehicle manufacturer doesn’t even own the most shares of any publicly held company, according to Fortune. It seems to be Musk’s tweets alone that move crypto value.
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To the Moon – It’s difficult to trace the origins of the phrase “to the moon,” but the meaning is self-explanatory. Just as landing astronauts on the moon in 1969 (and even today…) was a questionable proposition with high stakes for success, a stock or crypto that goes “to the moon” just means its price will rise to make investors untold profits.
When Lambo – Similar to “To the Moon,” Lambo (short for the luxury car Lambhorghini) comes up when investors ask when a cryptocurrency will be highly profitable for investors, allowing them to cash it in for their dream car.
Mooning – When a stock or crypto is declared to be “mooning,” experts believe it has hit its peak. Of course, those who HODL could get caught losing money if they decide to sell in the future, but those who sell at the high point could “land a Lambo on the moon.”
Bagholder – If crypto or a meme-stock goes in the opposite direction, though, anyone left holding after the sell point is considered a “bagholder,” standing to lose money should they sell their assets.
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Pump and dump – Pump and dump refers to investors who try to illegally drive up the value of a stock or crypto only to sell when it reaches a high point. Previously relegated to small cap stocks, which are easy to manipulate, investors have begun doing it with crypto, too.
Buy the dip – When a stock expected to rise suddenly drops in price, some investors advise people to “buy the dip.” Wednesday’s crypto crash led to a flurry of “buy the dip” memes.
The Musk Effect – This newly coined phrase describes billionaire Elon Musk’s ability to move the market with a single tweet, as he did Wednesday implying that Tesla would not sell its stake in Bitcoin, which helped the cryptocurrency regain some earlier losses.
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This article originally appeared on GOBankingRates.com: Cryptocurrency Jargon: A Guide for the Crypto-Curious
