Crypto Glossary for Beginners
Plain-English explanations of 35 common terms in crypto investing and trading: funding rate, open interest, liquidation, long/short, leverage, DCA… Each term comes with a concrete example and links to live data on Crypffalo.
Futures & Derivatives
Funding rateFunding rate is a periodic fee that Longs and Shorts pay each other on perpetual contracts, keeping the contract price c…Open Interest (OI)Open Interest is the total value of futures contracts that are still open (not yet closed) in the market.…LiquidationLiquidation happens when a leveraged position has lost almost all of its margin, and the exchange automatically closes i…Liquidation priceThe liquidation price is the price at which the exchange automatically closes your leveraged position.…Long and ShortLong means betting the price will rise; Short means betting it will fall. On futures, you can profit in either direction…Long/Short RatioThe Long/Short ratio shows, among accounts with open positions, what percentage are Long and what percentage are Short.…LeverageLeverage means borrowing extra capital from the exchange to open a position larger than the money you have. It amplifies…MarginMargin is the money you put up as collateral to open and hold a leveraged position. There are two main modes: cross marg…Perpetual contract (Perpetual)A perpetual contract is a type of futures contract with no expiry date, so you can hold the position as long as you like…Futures (futures contracts)Futures are contracts to buy or sell an asset at a set price in the future. In crypto, futures let you go Long, go Short…Mark priceThe mark price is the price an exchange uses to calculate unrealized PnL and trigger liquidations. It is derived from pr…Short squeezeA short squeeze is when a sharp price rise forces Shorts to buy back or get liquidated en masse, pushing the price up ev…Long squeezeA long squeeze is when a sharp price drop triggers cascading Long liquidations, pushing the price even lower.…
Trading Basics
Spot tradingSpot means buying and selling actual coins at the current price: you pay and receive the coins in your wallet immediatel…Stop lossA stop loss is an order that automatically closes your position when the price moves against you to a level you set in a…Take profitA take profit is an order that automatically closes your position when the price hits a profit level you set in advance.…R:R ratioR:R is the ratio between the amount you could lose (the distance to your stop loss) and the amount you could gain (the d…DCA (dollar-cost averaging)DCA is a strategy of splitting your money into smaller amounts and buying regularly over time (or at set price levels) i…PnL (profit and loss)PnL is the profit or loss of a position or account. Unrealized PnL is the estimated profit or loss while a position is s…Maker and Taker feesA Maker is a resting (limit) order that adds liquidity to the order book; a Taker is an order that fills immediately (ma…
Markets & Sentiment
WhaleWhales are individuals or institutions holding very large amounts of money, enough to move the price when they buy or se…FOMOFOMO is the fear of missing out on an opportunity, which drives people to rush in and buy after the price has already ri…FUDFUD is negative news or rumors that spread panic and drive investors to sell off.…Bull and bear marketsA bull market is a prolonged period of rising prices; a bear market is a prolonged period of falling prices.…ATHATH is the highest price an asset has ever reached. ATL (All-Time Low) is the lowest.…LiquidityLiquidity is how easily an asset can be bought or sold without moving the price much.…Market capMarket cap = coin price × circulating supply. It measures the size of a coin.…AltcoinAltcoins are all coins other than Bitcoin, for example ETH, SOL, XRP, DOGE.…StablecoinA stablecoin is a coin pegged to a stable asset, most commonly pegged 1:1 to the US dollar (USDT, USDC).…
Macro & Ecosystem
Bitcoin halvingHalving is the event in which the reward for Bitcoin miners is cut in half, occurring roughly every 4 years.…ETF BitcoinA Bitcoin ETF is a fund listed on a stock exchange that holds actual BTC, letting investors buy BTC through a brokerage …CPI (Consumer Price Index)CPI is the measure of US inflation, published monthly, and it strongly affects interest rate expectations and crypto pri…FOMC (Fed meeting)The FOMC is the committee of the US Federal Reserve (Fed) that meets 8 times a year to decide interest rates.…CEX and DEX exchangesA CEX is a centralized exchange run by a company (Binance, OKX, Bybit). A DEX is a decentralized exchange that runs on a…HyperliquidHyperliquid is one of the largest decentralized perpetual futures exchanges. It runs on its own blockchain, and all orde…
Educational content, not financial advice.