The term "Fear, Uncertainty and Doubt" describes the spreading of unclear information or doubt about a startup or cryptocurrency project. FUD is used to describe the negative sentiment that spreads among people when there is bad news or a strong bearish sentiment on the market.
FUD is a malicious strategy that involves some companies or organizations spreading negative information about competitors, which reduces the credibility of that company. By spreading negative information about a company's products or services, FUD undermines users' trust in that company.
Fear, uncertainty, and doubt are considered unethical, but FUD is common in the labor sector. FUD is used to spread negative sentiment without taking into account the actual value of a company's product or service. FUD originated in the 1920s and became widely used in 1975.
What Is FUD in Cryptocurrency Ecosystem?
FUD can occur when a cryptocurrency shows temporary bearish sentiment. In general, traders use this term to refer to situations that are against cryptocurrencies.
In cryptocurrencies, FUD refers to the manipulation of markets by creating unnecessary panic and fear. By creating a feeling that investments will be lost with clear or unsubstantiated information in the sector, it causes investors to become anxious and people are enabled to sell their cryptocurrencies. As a result, the value of the cryptocurrency in question can be reduced through manipulation. Cryptocurrencies tend to fall during bear seasons and investors often experience FUD during this time.
When people sell cryptocurrencies, market capitalization also declines. Investors trying to avoid FUD, or taking a loss, may suffer a loss in the long run as a result of selling the asset.
Trading Cryptocurrency With FUD
FUD is critical for those who are new to the cryptocurrency industry. FUD is an event that can have major consequences. FUD can be triggered by a well-known name in the industry making bad comments about cryptocurrencies, causing some positions to be missed by selling holdings.
The crypto-criticisms spread by skeptics could be as follows:
- Created cryptocurrencies do not have any value,
- Cryptocurrencies are a criminal activity and anonymous people are sharing them for incentives only,
- Cryptocurrency mining has negative impacts on the environment and resource distribution,
- Cryptocurrencies are not regulated and therefore governments can ban cryptocurrencies,
- Cryptocurrencies are the meaning of money laundering or a Ponzi scheme.
What Does FUD Mean in Investment?
Trading strategies that contain FUD are generally not investment advice. In some cases, FUD may represent reality, but in general, it refers to the negative sentiments that are realized in the market. Many investors have their concrete fears. Those who have invested too little or too late may fear a market meltdown. Unforeseen circumstances may cause more concern.
FUD and Government Regulations
Many countries are opposed to the idea, as cryptocurrencies are not yet widely used and familiar to the general public. For this reason, FUD's assessment of the situation will also vary. This depends on what the government thinks. For instance, the use of Bitcoin is still prohibited in some countries. No matter what regulations the government makes, the realization of FUD will directly affect the situation on exchanges.
FUD and FOMO
FUD refers to collective fear and suspicion, often generated through social media, while FOMO refers to people's fears. The intersection between them is that situations that may occur in cryptocurrencies or the market trigger people's emotions, fears, and suspicions.
Who Is FUDster?
The word FUDster is used for people who cause and spread FUD. The term FUDster can be used for someone wary of cryptocurrencies in a downtrend.
