Disclaimer: This is for informational purposes and is not meant to serve as financial or investing advice.
11 Crypto Acronyms To Know
1. FUD
Fear, Uncertainty, and Doubt
FUD is an investing term that the crypto world has co-opted. In investing, FUD means general pessimism about an asset or industry. Crypto FUD is usually event-driven. Meaning bad news has come out about a specific investment or asset class.
Fear means fear of financial losses; uncertainty refers to a lack of clarity in asset performance; doubt can refer to distrust of an asset’s stewards.
Crypto investors use “FUD” in two ways. The first way is the same as in traditional finance. Bad news may come out about a cryptocurrency’s team or adoption rate. As a result, FUD can lead to selling and price decreases.
The second way is to manipulate prices or accuse others of manipulating prices. Influencers are often accused of spreading FUD about projects so they can buy at a lower price. And it can work due to the hive mind of Crypto Twitter, forums, and Discord chats.
Accusing someone of spreading FUD implies that they have something against the project or are unreasonably pessimistic.
2. BTD
Buy The Dip
The most common investing metric is “buy low, sell high.” In crypto, BTD is a common refrain when prices decrease. It’s a way of saying, “stop complaining about the project and use it as an opportunity to buy cheap tokens.”
3. DeFi
Decentralized Finance
Decentralized finance refers to financial instruments, tools, and protocols built on smart contracts.
DeFi protocols include lending platforms like AAVE and Compound. DeFi also includes decentralized exchanges like Uniswap or Sushiwap.
4. HODL
Hold — Misspelling from Bitcoin Talk
A common misconception about the phrase HODL is that it’s an abbreviation for “Hold On for Dear Life.” As in, cryptocurrencies are super volatile so if you are investing, get ready for a ride.
But many don’t know that HODL was originally a misspelling of the word “hold.” In 2013 an early Bitcoin user created a post titled “I AM HODLING” on the BitcoinTalk forum.
Nowadays, if you’re HODLing, you’re ignoring the price and not selling your crypto asset. HODL has become an infamous rallying cry in the crypto community. Many have even started to refer to crypto developers as “buidlers” instead of builders.
5. FOMO
Fear of missing out
FOMO is the most popular term from this list outside of crypto. Social media and smartphones have severely amplified our society’s fear of missing out.
Traders and influencers use FOMO to pressure retail investors into buying a cryptocurrency or NFT that is enjoying a lot of hype.
An excellent example of this style of social manipulation was the Dogecoin runup of the summer of 2021. Social media and IRL chatter about Dogecoin reached such a fever pitch that unsophisticated traders bought Doge so they wouldn’t miss out.
6. PND
Pump ‘N Dump
A pump and dump scheme is when a group colludes to pump the price of a token and then dumps it on unsuspecting holders that bought in after them.
After the ICO craze of 2017, pump n’ dump telegram groups became popular. The group would pick a coin and use their combined capital to inflate the price simultaneously.
Other investors would see a sharp spike in the coin’s price and buy-in. Then the PND group would sell for profit. In 2017 there were not as many crypto traders, tokens, or exchanges, so it was simple to dump and dump coins.
Nowadays, PND schemes can be complex. They can include paid promotions from large Twitter accounts, fake technical analysis, and good old-fashioned FOMO.
PNDs can target small communities for a few thousand dollars in profit and rinse and repeat with a new token or target. You may hear the phrase “bagholder’ about PND schemes. Bagholders are those left holding the cryptocurrency after PND’ers take profits.
7. ICO
Initial Coin Offering
An ICO is the crypto market’s version of an IPO. ICOs reached their heyday in 2017 and are not as common anymore.
According to experts, the ICOs were used to raise almost $5 billion in 2017. The largest was Filecoin which brought in $258 million in investor dollars.
The Ethereum ICO of 2014 is the most well-known ICO. One ETH was priced at just 33 cents and could be purchased with the equivalent amount of BTC.
After 2017 ICOs launched hundreds of altcoins. Many of which are now worthless. For that reason, the acronym has a scammy connotation.
8. NFT
Non-Fungible Token
An NFT is a tokenized digital asset representing ownership of an idea, content, or property. The key phrase here is “non-fungible,” which means that the token is unique and cannot be replicated.
NFTs are primarily used to tokenize artwork. Some artists auction off individual works, but many make massive collections of up to 10,000 NFTs.
Often these extensive collections are made up of randomly generated profile pictures, or PFPs for short. The most famous PFP collections are Cryptopunks, Bored Apes, and NBA Topshot moments. Most NFT trading takes place on the Ethereum blockchain, but other ecosystems like Solana, Flow, and Cardano support NFTs.
But because NFTs convey ownership rights to the underlying content or property, you can use them in exciting ways. One example is tokenized real estate.
Instead of going through a traditional broker, homeowners can tokenize the deed to their house. Then prospective buyers can log on with a crypto wallet and buy the NFT. When the NFT is transferred, the NFT protocol transfers the deed to the buyer IRL.
9. DCA
Dollar Cost Average
Dollar Cost Average is an investing strategy where you invest a fixed amount of money simultaneously at every set time interval. For example, you can DCA into Bitcoin by buying $100 every week.
The phrase DCA originated in the stock market. Stock traders use it to take the emotion out of investing. It’s used to build a long position over a long period. It’s a passive form of investing.
In the crypto community, the phrase DCA tells people to ignore volatile price action and invest in what they believe. If someone supports a token over the long term, they don’t care about short time price fluctuations. They tell people their strategy is to DCA.
You can learn more about DCAing in our guide to building a strong crypto portfolio allocation.
10. KYC
Know Your Customer
The federal government implements KYC laws to prevent financial fraud and money laundering. They require financial institutions to collect information about the customer’s identity, financial knowledge, and wealth.
Because of KYC laws, some investment products are only offered to individuals with a high net worth or a background in finance. All federally registered banks and crypto exchanges must confirm an individual's identity before providing services.
The basic KYC process usually involves providing your driver’s license, SSN, and other tax info. DeFi and blockchains, in general, are controversial because they are permissionless.
Individuals just need a crypto wallet to interact with crypto products and services. No KYC is required. There is much debate between US regulators on how much KYC should be directed to interact with blockchains.
The concern is that blockchain users don’t have the same protections from fraud they are afforded in traditional banking and finance. On the other hand, crypto purists argue that the lack of KYC is a good thing because regulations lead to financial censorship.
11. DYOR
Do Your Own Research
Have you ever read an article or tweetstorm about a cryptocurrency that ends with DYOR? DYOR is a catchall disclaimer used to “this isn’t financial advice, do your own research.”
Honest writers covering crypto will emphasize that their content is for educational purposes only and does not constitute financial advice. More unscrupulous actors use DYOR to hedge their statements about cryptocurrencies.
In their minds, saying DYOR protects them from criticism over bad investments or even legal action. But in reality, you are always responsible for your online posts. And you should tread lightly on giving financial advice in an industry with so much regulatory uncertainty.
Why Are Crypto Acronyms Used?
Online acronyms have been around as long as internet forums have existed. They’re used to signal you’re a part of the in-group, as shorthand to save time or character space.
In the crypto world, content is often short-form, like in Tweets. Acronyms are used to express sentiment, describe the market, and rapidly create disclaimers.
However, you should be wary of influencers who constantly use acronyms as buzzwords or inside jokes instead of for communication.
Bottom Line
Crypto content can be indecipherable to outsiders at first glance. It uses a litany of acronyms, insider jokes, and financial terms.
To be an informed investor, you should have a baseline understanding of crypto acronyms. For better or for worse, they are a significant part of the discourse.
Besides understanding the terminology, successful crypto traders need the right tools and strategies to take advantage of the crypto market. Pluto is here to help. Check out our beginner-friendly platform of automated trading strategies and back testing data for more information.
Sources:
2017’s ICO Market Grew Nearly 100x From Q1 To Q4 | Crunchbase
