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What is FUD and what it mean in Crypto?

Jan 18, 2022 07:05


FUD is Fear, Uncertainty, and Doubt (often spread on social media or mass media). FUD can make the price of a coin to fall without fundamentals and technical, rather on bad news that are spread on social media platforms. In many instances, the bad news isn’t substantiated or grounded in reality and finally it turns to be something silly like a popular person or a celebrity sharing their negative opinion, for instance calling Bitcoin a bubble. In short, The fear, uncertainty, and doubt-inducing idea being spread around media is known as FUD.


FUD can be said as opposite of FOMO (fear of missing out). FOMO affects people on personal level , in that they don’t want to miss out on potential gains whereas FUD tend to more of a collective effect that spread like wildfire usually through social media.

Many people face FOMO when market is in uptrend and fall victim of FUD when market is down, FUD can spread rapidly. In simple terms, FUD means Fear and FOMO means greed.

Both of these are sometimes used by astute traders as contrarian indicators. They buy the asset at low prices when FUD spreads everywhere. When people experience FOMO, astute traders may sell at a high price.

“Hodl” word is also famous in the crypto world. The term HODL is interpreted as “hold on for dear life.” This use of this word came from an old Reddit post where someone posted a long rant about having trouble timing the market while misspelling the word “hold” several times. Initially It was used in reference to Bitcoin, However now it is applied to different types of crypto currencies.

Use of FUD And How it matters ?

Crypto community use FUD as a part of the overall information that impacts the price of the crypto’s in market. Newbies and Retail investors get frightened up easily with the spread of such negative news and that prompts the traders to sell while the rest is a self-fulfilling prophecy of a correction playing out.

Conspiracy theorists  argue that it is always whales and the elite and wealthy are behind spreading FUD which weighs on the value of Bitcoin or crypto and exploit the situation as a part of a devious strategy.

FUD matters as the Newbies get easily frightened and thus it leads the price to crash for long-term holders and the average cryptocurrency enthusiast with strong hands.

FUD in the Context of The Cryptocurrency Market

FUD is very powerful in the crypto arena as the crypto currencies are speculative at this stage. Thus it means that these assets are very volatile and giving them a value is more challenging and thus dramatic price swings can be seen even to a small information that is false or have less value.

Crypto FUD and Memes

Crypto FUD also involves the spread of memes that reduces the FUD’s effect.  Media’s spread FUD sometimes are considered as trivial, in that scenario the idea of making fun via creating memes pop up. Elsewhere, suppose the media spread FUD is legitimate in nature than making memes and making fun of those threats which lessens its seriousness might start circulating.

The below are some well known FUD examples of crypto market.

China’s Ban of Mining

This is one of the best crypto FUD and it is one of the FUD that has been the subject of many memes that Twitter rants than any other.

Every year when crypto hits its high and few times multiple time a year, The Chinese officials make a claim of banning Bitcoin in some way. Indeed a real comprehensive ban on Bitcoin will be a one time event But Chinese government brings some sort of restrictions for individuals or organizations involved in crypto markets. And what happens, the media report it as “ban on Bitcoin.”

In 2021, Crypto market was hardly shaken by the China making Bitcoin mining illegal in the country.

Government Regulation

National governments imposing regulations on the crypto, turn to be a big source of fear, uncertainty, and doubt. Since the crypto market is still in its infancy stage, Many countries have not yet adopted regulatory framework that specifies rules about the use and taxation of the crypto currencies.

Some countries made the use of crypto illegal , while few others give warning about harsh restrictions coming in the near future. All these threats are real or perceived, however the involvement of the government in the crypto market weighs on the investors.

‘Ocean Boiling’ Bitcoin

The argument “Bitcoin uses so much energy which makes it unsuitable and it is  dangerous threat to the planet.” can be taken as another example of Crypto FUD.

The fact is that majority of the bitcoin mining uses renewable energy. Gold mining, banking, transportation, construction, healthcare, and other industries use exponentially more energy than it takes to maintain the Bitcoin network. It is worthy to be noted that the banking sector alone uses more than twice the energy of Bitcoin.

Final words

Crypto FUD is a crypto term that is almost as old Bitcoin. Now those who spread the crypto FUD are most likely doing with a hope of buying the coin at lower prices as holders will be induced to sell.

However, FUD isn’t always a bad thing. For instance, many BTC miners left China seeking a more welcoming environment, BTC mining is now a much greener industry, taking place mostly in the United States under stricter conditions.

New slangs will find its way onto the Internet every day. For the crypto sphere that is so young and lively, you can only expect slang to flourish even more!

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