FUD 101
What the FUD is all about
Why do prominent influencers purposely spread negative news about the performance of specific cryptocurrencies? Well, it turns out that this is a pretty common phenomenon in the world of investing, whether it’s in the crypto, stock, or even real estate market. “FUDsters” use their platforms to influence public perception about a specific asset to manipulate its price, something that all knowledgeable cryptocurrency investors and traders should be aware of. Here’s everything you need to know about FUDsters and how to deal with them.
In this article
What Is FUD?
FUD: Short form for “fear, uncertainty and doubt.” Usually used in the form of “xxx spreading FUD again.” FUD can cause the price of a coin to drop, not based on fundamentals or charts, but based on bad news that spreads around social media. More often than not, the so called “bad news” isn’t really substantiated or grounded and ends up being something more frivolous like a random influencer’s opinion that Bitcoin is a bubble. Resultantly, subsequent fear, uncertainty, and doubt spreads through media and is thus referred to as FUD.
How To Spot A FUDster
Just like any other scam or spam account, FUDsters are sometimes easy to spot if you do enough analysis into their profile. Take Twitter for example, where you can observe accounts with extremely disproportionate follower to following ratios. These types of spam accounts are created by purchasing followers to increase their credibility when they spread negative or even positive news to purposely manipulate the way people feel about a certain project. Even platforms like Reddit and YouTube contain content regarding FUDsters and how to deal with them. Simply looking into an account’s information will give you a good indicator of whether or not you’re dealing with a classic FUDster — but they aren’t always in this form.
FUDsters can also emerge in the form of actual influencers who have genuine supporters. In this case, it’s usually a celebrity of prominent professional figure who speaks for or against a cryptocurrency, spreading that sentiment across all of their followers. JPMorgan’s Dimon spread FUD by saying Bitcoin is a fraud that will eventually blow up. Unless they’re able to cite specific reasons as to why Bitcoin may be a bubble or end up being a huge success, this person is most likely just spreading around news to make people think negatively or positively about the currency. The media is also guilty of spreading FUD through their articles which tend to make outrageous claims by stretching the truth. As long as you’re aware of who the genuine and fake influencers are, you’ll be able to steer clear of any FUDsters.
The Effect Of FUD
In addition to making people scared, cautious, or excited about certain currencies, FUD can also manipulate the actual price of the coin in specific circumstances. Especially when completely false information is spread across the world through the internet and media, the price of a coin can actually take a significant turn. Although there are tangible ways to protect yourself from the adverse effects of FUD, most people aren’t even aware that they’re subconsciously feeling this way due to what influencers share. As a result, you might unknowingly spread that fear among your own friends and followers, essentially creating a positive feedback loop of endless FUD. Once FUD dissipates and the market stabilizes a bit, you can always expect the market to recover following an adverse FUD price manipulation. Time your investments right and you just might be able ride the wave of spiking prices and see your investments grow rapidly, all thanks to FUD.
Conclusion
Ever since the internet emerged into what it is today, increased connectivity has allowed basically anyone to voice their opinions to a broad audience across the world. For those who have a large following, their statements may be much more influential than something your Average Joe might say. Having the ability to influence a large amount of people can work in your favor if you do so responsibly, but most of what circulates around the world of cryptocurrency contains fearsome headlines or discouraging quotes. As such, it’s extremely important that anyone who considers themself a “knowledgeable cryptocurrency investor” understands how FUD works. Moving forward, keep an eye out for influencers who you believe may just be spreading FUD when it comes to cryptocurrency.
Memory Lane: What was your last FOMO-FUD moment?
Tell us about it in the comments!
