Blockchain and Crypto Cryptocurrency Trading & Wallets 2

Question 1

How is cryptocurrency market capitalization calculated?

Accepted Answer

Current price multiplied by circulating supply

Answer

Cryptocurrency market capitalization is calculated by multiplying the current price by the total circulating supply, representing the asset's total market value.

Question 2

What is a limit order in cryptocurrency trading?

Accepted Answer

An order to buy or sell at a specified target price

Answer

A limit order instructs an exchange to buy or sell cryptocurrency only when the price reaches a specified target, giving traders control over their execution price.

Question 3

What does HODL mean in crypto investing culture?

Accepted Answer

Hold On for Dear Life—a strategy of holding crypto long-term regardless of price swings

Answer

HODL stands for 'Hold On for Dear Life' and describes the long-term buy-and-hold strategy of retaining cryptocurrency through market volatility without selling.

Question 4

What is dollar-cost averaging (DCA) in cryptocurrency investing?

Accepted Answer

Investing a fixed dollar amount at regular intervals regardless of price

Answer

Dollar-cost averaging involves investing a fixed amount in cryptocurrency at regular intervals regardless of price, reducing the impact of market volatility on the average purchase price.

Question 5

What defines a bear market in cryptocurrency?

Accepted Answer

A prolonged period of declining prices, typically a drop of 20% or more from recent highs

Answer

A bear market is a prolonged period of declining cryptocurrency prices, typically defined as a drop of 20% or more from recent highs, characterized by widespread pessimism.

Blockchain and Crypto Practice Test

Blockchain and Crypto Practice Test

Blockchain and Crypto Cryptocurrency Trading & Wallets 2