This reference to the prolonged decline of the cryptocurrency market was used to explain the 2018 crash that wiped out 88% of the market value of all cryptocurrency assets. This was shown again in 2022 when digital tokens crashed again and bitcoin fell 76% from its peak between November 2021 and mid-November 2022.
● Cold storage/hot wallet
Cautious crypto users store their coins in what's known as cold storage, usually on a hard drive that's not connected to the Internet, to make it harder for hackers to steal them. Hot wallets are places where funds are stored and ready to be traded online or through an exchange. When cryptocurrency exchange FTX filed for bankruptcy in November, it moved some of its customers' digital assets into cold storage to keep the accounts safe.
Decentralized financial platforms allow people to lend or borrow crypto-assets, bet on price changes or trade them. Unlike cryptocurrency exchanges, which are run by companies with offices and salaried employees, DeFi typically works with automated contracts developed by users. The fall of stablecoin TerraUSD and its DeFi platform Anchor in May raised broader questions about whether some crypto products are scams luring investors with erratic profits.
Risky crypto investors put their money into platforms for profit. A common strategy involves lending one token, borrowing another, and buying another token. At one time, investors made triple returns on such complex combinations. The lending and borrowing of different tokens means that if one collection system runs into trouble and depositors start withdrawing funds, some others can borrow.
These are software platforms that connect crypto services that cannot communicate with each other. It allows users to transfer tokens from one blockchain to another. These links allow cryptocurrency users to invest in many different projects. They make ecosystems more interconnected and more vulnerable when weak institutions are challenged.
These crypto investors believe that true digital currencies will be the only thing the world needs. They stand by this idea and dismiss concerns about volatility and high energy consumption.
Some cryptocurrencies try to tie their value to other assets, making them more stable than highly volatile currencies like bitcoin. Most stablecoin issuers say they maintain stability by buying safe-haven assets like the US dollar. However, the largest stablecoin project, Tether, was fined by the US Commodity Futures Trading Commission in 2021 for misleading customers by claiming the token's value was "fully backed" by fiat assets. In another category, interest in algorithmic stablecoins faded when the system used by the TerraUSD token to manage supply and demand failed.
An irreplaceable token ensures the unique ownership of a digital asset. NFTs are mainly used for collectibles such as digital art or video clips, memes or items used in online games. At the height of cryptomania in early 2022, NFT series like Bored Ape Yacht Club and CryptoPunks made millions thanks to endorsements from celebrities like Paris Hilton and Snoop Dogg. By June, many NFT collections had fallen in price.
A vision of a more decentralized World Wide Web based on crypto-technology that turns the power of giant tech companies back to Internet users. Proponents say the current model, known as Web 2.0, is too controlling for some platforms that track our online activity and monetize the data through advertising. Web 1.0 refers to the early days of the Internet, when it was just a way to remotely access static pages of text and images.
Trading jargon for "crypto winter".
HODL: Meme turns into a typo asking traders to keep their nerves "tight" during wild moves. "Hold on for dear life" today.
Literally: "We will succeed." Crypto enthusiasts use it to show their support for each other or to build trust in a project. You can guess what NGMI means.
Rect: short for "gelding". This term describes large losses or liquidity resulting from bad investments or rash trading.
Applies to McDonald's: During the crypto-asset crash, traders joke about working at a burger chain instead of complaining about their plight.
- With the help of Muao Shen.
Other similar stories are available at bloomberg.com.