What is FUD?
FUD stands for Fear, Uncertainty and Doubt. FUD is regularly used in the cryptocurrency world by people who don’t like a project or want to lower the price of a digital asset.
If you want to become a knowledgeable crypto-investor, it’s very important to understand how FUD works so as not to fall into this trap set by other people, or, perhaps, use it to your own advantage.
Why do people use FUD?
FUD may be used for quite different purposes. First, there are those who bear a personal grudge against a project and wish to harm a particular crypto by trying to lower its price by any means possible.
FUD can also be the work of a highly organised group whose goal is to lower the prices so that they can make a much bigger profit.
Finally, the third category — people who don’t really understand what they are doing. These individuals damage the project by unintentionally spreading fake news because they fail to separate factual information from what they may find on the net.
How not to fall into the trap of FUD?
It’s very important to understand that in some cases FUD is justified and can help some investors cut their losses quickly. For example, when we find out that a project is, in fact, a scam, identifying FUD as true makes it possible to recover part of the initial investment by selling the project’s tokens as quickly as possible.
However, in the majority of cases, FUD isn’t substantiated. To find out if the negative info is trustworthy, it is important to consult different sources, possibly in several languages. If the information is found in multiple places, then it is very likely that FUD is justified and that the bad news is real. However, if you only see the news in one place or hear it from only one person, then the probability that this information is true is close to zero.
In the crypto world, it is important to be critical and not believe everything you find on the internet. It’s essential to compare and fact check the sources.
What can be done to fight FUD?
Unfortunately, very few things can be done to combat FUD. Taking human nature into account, it’s quite likely that there will always be people who want to hurt a project out of revenge or in an effort to manufacture a dip in price to buy into.
As a beginner, it’s important not to overreact when hearing bad news about a project and to double check whether what has been said is real or not. If you trust incorrect information, it’s possible that you’ll part with our tokens for a much lower price compared to what you would choose to if you don’t fall into this trap.
It is also necessary to be able to react quickly to FUD situations. Unfortunately, negative news is sometimes justified and in this case, it is important to be able to part with your tokens as quickly as possible before your asset’s price falls sharply.
Conclusion on FUD
FUD is an integral part of the blockchain universe. Unlike traditional financial markets where the spread of bad news with the aim of affecting prices can be sanctioned, the blockchain industry lacks such legislation.
It’s important to verify information by cross-referencing multiple sources in order to resist FUD. If several people or media outlets are talking about the same news, it’s safe to say that it is real and then try to react appropriately to minimise the damage.
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J'ai découvert le monde des cryptomonnaies en janvier 2018. Arrivé au pire moment pour investir, je n'ai depuis lors jamais cessé de me former et partage désormais mes connaissances afin de faciliter l'adoption des cryptos.
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.