WhETHer you're in the stock market, day trading Forex, or new to cryptocurrency, you'll hear a lot of trading terms that may sound unfamiliar. FOMO, ROI, ATH, HODL, what do these all mean? Trading and investment have their own language, and it can be daunting to learn all these new terms. However, they can be quite useful if you want to keep up with what's going on in the financial markets.
If you’re wondering what SAFU crypto is, we’ve got you covered! In this article, we've compiled some of the most commonly used abbreviations by crypto natives that you should know if you're involved, or planning to get involved in the world of cryptocurrencies. Let’s start with your question on “What Does SAFU in Crypto Mean?”
SAFU Crypto: What Does SAFU in Crypto Mean?
Secure Asset Fund for Users (SAFU) originates from a meme uploaded by Bizonacci. It incorporated Binance's CEO, Changpeng Zhao (CZ), saying "funds are safe" during unscheduled platform maintenance.
The video went viral within the cryptocurrency sphere. In response, Binance has established the Secure Asset Fund for Users (SAFU), an emergency insurance fund that's funded by 10% of trading fees. These funds are stored in a separate cold wallet. The idea is that the SAFU may cover the loss of user funds in extreme cases, offering an additional blanket of protection for Binance users. This is why you might often hear the phrase "funds are safu."
Other Crypto Slang Terms
Do Your Own Research (DYOR)
When it comes to the financial markets, DYOR is a term closely related to Fundamental Analysis (FA). It means that investors should do their own research into their investments and not rely on others to do it for them. "Don't trust, verify" is a commonly used phrase in the cryptocurrency markets with similar meaning.
The most successful investors will do their own research and come to their own conclusions. As such, anyone who wants to be successful in the financial markets will have to come up with their own unique trading strategy. This may also lead to disagreements between different investors, which is a completely natural part of investment and trading. An investor may be bullish on an asset, while another may be bearish.
Different opinions can accommodate different strategies, and successful traders and investors will have wildly different strategies. The main idea is that they all did their own research, came to their own conclusions, and made their investment decisions based on those conclusions.
Due Diligence (DD)
Due diligence (DD) is somewhat related to DYOR. It refers to the investigation and care that a rational person or a business is expected to make before coming to an agreement with another party.
When rational business entities come to an agreement, it's expected that they do their due diligence on each other. Why? Any rational actor wants to ensure that there aren't any potential red flags with the deal. Otherwise, how could they compare the potential risks with the expected benefits?
The same is true for investments. When investors are scouting for potential investments, they need to do their own due diligence on the project to ensure that they can take into account all risks. Otherwise, they won't be in control of their investment decisions and may end up making the wrong choices.
Fear, Uncertainty, and Doubt (FUD)
While not exclusively a trading term, FUD is often used in the context of the financial markets. FUD is a strategy that aims to discredit a particular company, product, or project by spreading misinformation about it. The aim is to instill fear and gain an advantage somehow. This can be a competitive or tactical advantage or profiting off a stock price decline caused by the potentially damaging news.
As you'd expect, FUD is quite common in the cryptocurrency space. In many cases, investors may enter a short position in an asset then release potentially harmful or misleading news when the position has been established. This way, large profits can be made by short selling or buying put options. They may also position themselves with over-the-counter (OTC) deals beforehand.
In many cases, the information turns out to be false, or at the very least misleading. In some cases, however, it turns out to be true. It's always good to try to consider all sides of the argument. It can be helpful to think about what incentives people can have by publicly sharing certain opinions.
Fear Of Missing Out (FOMO)
FOMO is the emotion that investors feel when they flock to buy an asset in fear of missing out on the profit opportunity. As there are heavy emotions involved, FOMO by a large number of people can lead to parabolic price movements. Investors "FOMO-ing" from asset to asset in a game of musical chairs can often signal the later stages of a bull market.
Extreme market conditions can change the usual rules of the markets. If you've ever dabbled in trading using Technical Analysis (TA), you know that when emotions are rampant, many investors may jump into positions out of FOMO. This can lead to extended moves in both directions and may trap many traders who try to counter-trade the crowd.
FOMO is also commonly used when designing social media apps. Have you ever wondered why it's usually more difficult to view posts on social media timelines in strictly chronological order? This is also related to FOMO. If users were able to check all the posts since their last login, they'd have the feeling that they've seen all the latest posts.
By deliberately mixing older and newer posts on the timeline, social media platforms aim to instill FOMO in users. This way, the users keep checking back again and again in fear that they're missing out on somETHing important.
Holding On for Dear Life (HODL)
HODL is a term that's derived from a misspelling of "hold." It's basically the cryptocurrency equivalent of the buy and hold strategy. HODL originally appeared in a now-famous post on the BitcoinTalk forum in 2013. The term was a spelling mistake in the title: "I AM HODLING." and was later retrofitted to be an acronym for “Hold On for Dear Life”.
HODLing refers to holding on to investments despite price drops. It's also commonly used in the context of investors ("HODLers") who admittedly aren't good at short-term trading, but want to get price exposure to cryptocurrency. It may also be used for investors who have high conviction in a particular coin and intend to hold on to their investment for a longer period.
The HODLing strategy is similar to the buy and hold investment strategy coming from the traditional markets. Buy and hold investors try to find undervalued assets and hold on to them for a long time. Many investors adopt this strategy for Bitcoin.
BUIDL
BUIDL is a derivative term of HODL. It usually describes participants of the cryptocurrency industry who continue to build regardless of price fluctuations. The main idea is that true believers of the crypto industry keep building the ecosystem regardless of brutal bear markets. In this sense, "BUIDLers" genuinely care about what blockchain and cryptocurrencies can bring to the world, and they are actively working towards this goal.
BUIDL is a mindset that aims to exemplify how cryptocurrencies aren't just about speculation, but about bringing this technology to the masses. It acts as a reminder to keep our heads down and keep building the infrastructure that may very well serve billions of people in the future. In addition, BUIDLers understand that the teams that keep building with a long-term mindset will likely do well over the long-run.
All Time High (ATH)
The All-Time High (ATH) is the highest recorded price of an asset. For example, the ATH of Bitcoin during the 2017 bull market was 19,798.86 USDT on the BTC/USDT pair on Binance. This means that this was the highest price that Bitcoin was traded for on this market pair.
One compelling aspect of an asset reaching All-Time High is the idea that almost everyone who ever bought is in profit. If an asset has been in a prolonged bear market, many traders holding losing bags will likely want to exit the market when their position reaches break-even.
All Time Low (ATL)
The opposite of ATH, the All-Time Low (ATL), is the lowest price of an asset. For example, the All-Time Low of BNB was 0.5 USDT on the BNB/USDT market pair on the first day of trading.
Breaking an All-Time Low on an asset can lead to a similar effect as when breaking the All-Time High – but in the opposite direction. Many stop orders may trigger when the previous All-Time Low is breached, leading to a sharp move down.
Closing Thoughts
Crypto slang terms can seem a bit confusing at first. But now that you know what SAFU crypto is along with a good chunk of them, you can feel more SAFU with all these abbreviations. Make sure to DYOR on FUD, not blindly FOMO into a coin that has reached ATH, and keep HODLing and BUIDLing!
