FUD, which stands for Fear, Uncertainty and Doubt has inevitably made its way into daily crypto speak. As a knowledgeable crypto investor, it is well worth understanding what FUD is and what to look out for as it could save you a pretty penny!
The dangers of FUD?
As mentioned above, FUD stands for fear, uncertainty and doubt. These are, however, only words.
It is essential that one understands what lies beneath the surface as there could be significant consequences if FUD is not correctly recognised.
Ultimately fear, uncertainty and doubt can very easily lead to chaos, panic and confusion, not an ideal environment for investing or business in general.
FUD by way of spreading false, misleading or negative information could very easily derail an otherwise sound project or tempt an investor to sell coins or tokens early out of panic and thus lose out on potentially bigger profits further down the road.
So what is FUD exactly beyond just the words?
FUD can be something quite innocent borne out of genuine ignorance or intentional when used in a sinister way by people or organisations with an agenda to push.
Those that push FUD are better known in crypto circles as ´FUDsters´.
In the still largely unregulated world of crypto where a huge amount of volatility and money-making potential exists, there will be individuals and organisations that may want to influence events and drive prices down to make bigger profits.
There could be a rival organisation, a disgruntled employee, or an unhappy customer who wants to see a project’s demise. It could even be an individual or organisation that doesn’t want to see the broader world of crypto grow in prominence and could spread misinformation to discredit the world of crypto itself.
Then there are those mega influential people like Elon Musk who have a love-hate relationship with crypto and whose actions and statements can have a very dramatic effect on the coin in question or even the entire crypto ecosystem.
FUD is not new, it has been around for a while!
FUD; fear, uncertainty and doubt have no doubt been in use in one way or another since we were first able to communicate.
A person, group or organisation could spread false rumours, doubts or fears to give momentum to their own agenda or to get a rival out of the way.
Politicians and businesses have been successfully employing this neat little trick for a very long time.
The IT industry has used FUD with great effect, a few IT heavyweights using FUD have apparently included Microsoft, IBM and Apple during their formative years where much like the crypto world of today, the burgeoning information technology sector was up for grabs.
Dirty tricks and misinformation were sometimes used to push a particular agenda or to discredit the young upstarts nipping at the heels of the bigger players.
A very common playbook!
Let’s look at a few examples to see how FUD could be used in crypto
Starting with the innocent/genuine ignorance use case it’s pretty easy to understand.
A person hears something third-hand and starts talking or writing about it without any real knowledge or evidence.
They believe it to be true and start to spread the word via social media or crypto forums.
This can be quite dangerous, especially in the world we live in, where potentially false information can be spread easily and rapidly without the need for editorial verification.
As crypto is still very much in its infancy and largely unregulated, it is somewhat of a free for all and every person and his or her dog can chime in with their opinion, correctly, or completely falsely.
Therefore, it is important to do some homework and verify multiple credible sources of information before believing what you read or hear.
Basically, don’t just accept a rumour or information at face value unless you can really trust the source.
A few typical examples of crypto FUD include;
- Bitcoin is just a big Ponzi scheme waiting to burst
- Bitcoin and other cryptocurrencies don’t actually have any real value
- There is no real use case for crypto, I don’t see the point
- Governments will soon ban crypto and it’s game over
- Crypto mining is bad for the environment due to the intense power usage
- Cryptocurrencies help to facilitate crime and cyberattacks
How to avoid falling into the FUD trap!
If you read or hear that maybe a token you hold is a scam, get onto it fast to try to verify the information from multiple reputable sources, catching it early could save you a lot of money and heartache.
At the same time though, if the information is indeed false you don’t want to sell early and miss out on potentially bigger profits.
If you hear or read something negative don’t simply accept it as truth no matter how well-spun it is, take the time to look into it and make your mind up based on the information you have gathered yourself.
The internet is full of information, good and bad, reliable and unreliable. Use the wealth of information at your fingertips to be better informed and make wiser decisions.
As the old adage goes, “if it’s too good to be true, it probably is”, well, FUD is of a similar flavour, if something doesn’t quite smell right it’s worth taking a closer look before making any major decisions.
In summary, It would be wise to understand the subtext of any information you have received, do some homework of your own, read between the lines and try to understand any possible motives behind the statements.
Sometimes, a piece of information may well save you from financial harm, e.g. being alerted to a scam. It’s well worth keeping an open mind but don’t just accept what you hear without question, remember FUD, fear, uncertainty and doubt are three very powerful words that could just as easily harm you or help you!