Crypto Glossary
51 crypto terms explained simply. No jargon, no fluff — just practical knowledge for better investing.
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Strategy
Dollar-Cost Averaging (DCA)
Dollar-cost averaging is an investment strategy where you invest a fixed amount at regular intervals regardless of price, reducing the impact of volatility on your overall purchase.
Learn moreLump Sum Investing
Lump sum investing means deploying all available capital into an investment at once, rather than spreading purchases over time. It statistically outperforms DCA in rising markets but carries higher timing risk.
Learn moreExit Strategy
An exit strategy is a predefined plan for when and how to sell your investments. It includes profit targets, stop losses, and rules for reducing positions — designed to remove emotion from selling decisions.
Learn moreHODL
HODL (Hold On for Dear Life) is a crypto term for holding your investments long-term through volatility instead of selling. It originated from a misspelling of 'hold' in a 2013 Bitcoin forum post.
Learn moreMarket Indicators
Fear and Greed Index
The Crypto Fear and Greed Index measures market sentiment on a scale of 0 (extreme fear) to 100 (extreme greed), helping investors gauge whether the market is overheated or undervalued.
Learn moreRisk Wave
Risk Wave is Alpha Factory's proprietary market risk indicator that measures cycle risk using volatility, trend analysis, and market structure to produce a 0-100 risk score.
Learn moreAltcoin Rules
Altcoin Rules is Alpha Factory's 8-indicator scoring system that evaluates whether conditions are favorable for buying an altcoin, combining Risk Wave, RSI, Fear & Greed, token unlocks, and more into a single composite score.
Learn moreMarket Sentiment
Market sentiment is the overall attitude of investors toward a market or asset — ranging from extreme fear (pessimism) to extreme greed (optimism). It often drives short-term price movements more than fundamentals.
Learn moreBitcoin Dominance
Bitcoin dominance is the percentage of the total cryptocurrency market cap held by Bitcoin. When dominance rises, Bitcoin outperforms altcoins. When it falls, altcoins tend to rally (alt season).
Learn moreBull Market
A bull market is a sustained period of rising prices and optimistic investor sentiment. In crypto, bull markets are typically characterized by new all-time highs, mainstream media attention, and 5-20x returns across many assets.
Learn moreBear Market
A bear market is a sustained period of falling prices, typically defined as a 20%+ decline from recent highs. Crypto bear markets are severe — Bitcoin often drops 70-80% and altcoins can lose 90-95% of their value.
Learn moreTrading
RSI (Relative Strength Index)
RSI is a momentum indicator measured from 0 to 100 that shows whether an asset is overbought (above 70) or oversold (below 30), helping traders identify potential reversal points.
Learn moreToken Unlock
A token unlock is when previously locked tokens from a cryptocurrency project become available for trading, often increasing supply and creating sell pressure that can push prices down.
Learn moreVesting Schedule
A vesting schedule is a timeline that determines when allocated tokens gradually become available. Common in crypto projects for team, investor, and advisor allocations — typically lasting 1-4 years with monthly or quarterly unlocks.
Learn moreFunding Rate
The funding rate is a periodic payment between long and short traders on perpetual futures exchanges. Positive rates mean longs pay shorts (bullish sentiment), negative rates mean shorts pay longs (bearish sentiment).
Learn moreAltcoin
An altcoin is any cryptocurrency other than Bitcoin. Altcoins range from large-cap platforms like Ethereum to small-cap speculative tokens, and they typically carry higher risk and higher potential returns than Bitcoin.
Learn moreLiquidity
Liquidity is how easily an asset can be bought or sold without significantly moving its price. High-liquidity assets like Bitcoin have tight bid-ask spreads, while low-liquidity altcoins can experience large price swings from small trades.
Learn moreWhale
A whale is a crypto investor or entity holding a large amount of cryptocurrency — enough to influence market prices when they buy or sell. Bitcoin whales typically hold 1,000+ BTC.
Learn moreTokenomics
Tokenomics is the economic design of a cryptocurrency — including total supply, distribution, emission schedule, burning mechanisms, and utility. Good tokenomics align incentives between the project and its investors.
Learn moreCEX (Centralized Exchange)
A CEX is a traditional cryptocurrency exchange operated by a company that holds user funds and matches buy/sell orders. Examples include Coinbase, Binance, and Kraken. CEXs offer ease of use but require trusting the exchange with your assets.
Learn moreSlippage
Slippage is the difference between the expected price of a trade and the actual execution price. It typically occurs in low-liquidity markets or with large orders, and can significantly increase the cost of trading.
Learn moreDeFi
DeFi (Decentralized Finance)
DeFi is a category of financial services built on blockchain technology that operates without traditional intermediaries like banks. It includes lending, borrowing, trading, and earning yield through smart contracts.
Learn moreYield Farming
Yield farming is the practice of earning returns by depositing crypto into DeFi protocols — through lending interest, liquidity provision fees, or protocol reward tokens.
Learn moreStablecoin
A stablecoin is a cryptocurrency designed to maintain a stable value, usually pegged 1:1 to the US dollar. Common stablecoins include USDC, USDT (Tether), and DAI.
Learn moreDAO (Decentralized Autonomous Organization)
A DAO is an organization governed by smart contracts and token-holder votes instead of traditional management. Members holding governance tokens vote on proposals, treasury spending, and protocol changes.
Learn moreAirdrop
An airdrop is a free distribution of cryptocurrency tokens to wallet addresses, typically used to reward early users of a protocol, build community, or distribute governance tokens.
Learn moreDEX (Decentralized Exchange)
A DEX is a cryptocurrency exchange that operates on a blockchain without a central authority. Users trade directly from their wallets using smart contracts, maintaining custody of their funds. Examples include Uniswap, Jupiter, and Raydium.
Learn moreImpermanent Loss
Impermanent loss is the reduction in value that liquidity providers experience when the price ratio of their deposited token pair changes. The greater the price divergence, the larger the loss compared to simply holding the tokens.
Learn moreBlockchain
Smart Contract
A smart contract is a self-executing program stored on a blockchain that automatically enforces the terms of an agreement when predefined conditions are met, without needing a middleman.
Learn moreStaking
Staking is locking up cryptocurrency to help secure a proof-of-stake blockchain network. In return, stakers earn rewards — typically 3-15% APY depending on the network.
Learn moreBitcoin (BTC)
Bitcoin is the first and largest cryptocurrency by market cap, created in 2009 by the pseudonymous Satoshi Nakamoto. It functions as a decentralized digital currency and store of value secured by proof-of-work mining.
Learn moreEthereum (ETH)
Ethereum is the second-largest cryptocurrency and the leading smart contract platform. It enables decentralized applications (dApps), DeFi protocols, and NFTs through programmable smart contracts.
Learn moreProof of Work (PoW)
Proof of work is a consensus mechanism where miners compete to solve complex mathematical puzzles to validate transactions and create new blocks. Bitcoin uses proof of work, which is energy-intensive but highly secure.
Learn moreProof of Stake (PoS)
Proof of stake is a consensus mechanism where validators lock up (stake) their tokens as collateral to validate transactions. It uses far less energy than proof of work and is used by Ethereum, Solana, Cardano, and most modern blockchains.
Learn moreCrypto Mining
Crypto mining is the process of using specialized hardware to validate blockchain transactions and earn cryptocurrency rewards. Bitcoin miners secure the network through proof-of-work computation.
Learn moreBitcoin Halving
A Bitcoin halving is a programmed event occurring roughly every 4 years that cuts the mining reward in half, reducing new BTC supply. Halvings have historically preceded major bull markets.
Learn moreGas Fees
Gas fees are transaction costs paid to blockchain validators for processing transactions. Ethereum gas fees fluctuate based on network demand and can range from $0.50 to $100+ during peak congestion.
Learn moreNFT (Non-Fungible Token)
An NFT is a unique digital token on a blockchain that represents ownership of a specific item — such as art, music, or in-game assets. Unlike fungible tokens like Bitcoin, each NFT is one-of-a-kind and not interchangeable.
Learn morePrivate Key
A private key is a secret cryptographic code that proves ownership of a cryptocurrency address and authorizes transactions. It's like the password to your crypto — whoever has it controls the funds.
Learn morePublic Key
A public key is a cryptographic code derived from your private key that generates your wallet address. You can safely share your public key or wallet address with others to receive cryptocurrency.
Learn moreLayer 2 (L2)
A Layer 2 is a secondary blockchain built on top of a main chain (like Ethereum) to process transactions faster and cheaper. Popular L2s include Arbitrum, Optimism, and Base.
Learn morePortfolio
Cost Basis
Cost basis is the average price you paid for an asset across all your purchases. It determines your profit or loss when you sell and is essential for tax reporting.
Learn moreMarket Cap (Market Capitalization)
Market cap is the total value of a cryptocurrency calculated by multiplying the current price by the circulating supply. It's the most common metric for comparing the relative size of crypto projects.
Learn morePortfolio Rebalancing
Portfolio rebalancing is periodically adjusting your holdings to maintain your target allocation. If one asset outperforms and becomes overweight, you sell some and buy underweight assets to restore balance.
Learn moreCold Wallet (Cold Storage)
A cold wallet is a cryptocurrency wallet that is not connected to the internet, making it highly secure against hacking. Hardware wallets like Ledger and Trezor are the most common form of cold storage.
Learn moreHot Wallet
A hot wallet is a cryptocurrency wallet connected to the internet, offering convenience for trading and daily use but with higher security risk than cold wallets. Examples include MetaMask, Trust Wallet, and exchange wallets.
Learn moreSeed Phrase (Recovery Phrase)
A seed phrase is a set of 12 or 24 words that serves as the master backup for a cryptocurrency wallet. Anyone with your seed phrase has full control of your funds — it must never be shared or stored digitally.
Learn moreRisk
Volatility
Volatility measures how much an asset's price fluctuates over time. Crypto is significantly more volatile than traditional assets, meaning larger potential gains but also larger potential losses.
Learn moreRug Pull
A rug pull is a crypto scam where project developers abandon the project and steal investor funds — typically by draining liquidity pools, selling massive token allocations, or disabling selling functionality.
Learn moreFOMO (Fear of Missing Out)
FOMO is the anxiety-driven impulse to buy a rapidly rising asset because you're afraid of missing potential profits. It's one of the most common psychological traps in crypto and often leads to buying near market tops.
Learn moreStop Loss
A stop loss is an order that automatically sells your position when the price drops to a specified level, limiting your potential losses. It's a risk management tool that removes emotion from selling decisions.
Learn more