FUD: How Fear, Uncertainty and Doubt Hold Crypto Investors Back
By | Updated January 7th, 2022
What does FUD mean?
FUD is an acronym for fear, uncertainty and doubt. While it is wise to approach any potential investment with great care, in crypto the term FUD is typically applied to fears, uncertainties and doubts that are unwarranted. FUD can be eliminated by greater research and understanding – or a bolder mindset.
What Is FUD?
Pessimism. It’s an important belief from a survival standpoint. Not wanting to trek through a jungle because you believe you’ll get bitten to death by spiders may deprive you of a riveting adventure, but at the very least you’ll enjoy an existence that is uninterrupted by spider bites.
But pessimism, when exercised too generously, can be an impediment to the investor. If fear, uncertainty or doubt (FUD) dissuaded you from buying Bitcoin in 2015, then needless to say you missed out. Take this opportunity to kick yourself.
Yet FUD is still common in the crypto world. Compared to fear of missing out (FOMO), which prevails when the market is hotter than a cheap cigarette lighter, FUD tends to color the public mindset when the market is dropping or stagnant. This is why FUD is bad: It dissuades investors from buying crypto at lower prices – just like FOMO spurs them to buy when prices are at their peak!
What Is FUD in Crypto?
FUD takes two common forms in crypto. The first is when speculation surrounding a coin or token becomes increasingly negative – so much so that it may actually drive the value of that asset downward.
Such negative speculation may be wholly organic, although it is not unheard of for certain actors to spread FUD as part of a strategy to drive that asset’s price down for their own benefit.
Just like political actors will don sock puppet accounts to flood online forums with information that supports their agenda, so too will opportunists try to influence perception of a coin or token in their favor.
But what is the energy of misinformation? Actual information. Thus the cure for FUD is DYOR – “do your own research.”
The second great source of FUD in the crypto world is the negative attitude toward crypto itself. The future of currency is often dismissed as high-falutin zoomer hokum bokum by many people who are branded as “in the know,” including Warren Buffet and Jack Bogle.
Of course, official attitudes may also fuel FUD. Take China’s ban on crypto, for example. It wasn’t the product of the Chinese government’s compulsive need to protect its citizens. It was spurred by the government’s desire to secure its party members’ control over the economy. Yet authoritarian measures such as these often create plenty of FUD among investors who worry that crypto is destined to become a flash in the pan.
While we would never advise against caution, it is important to remember that there is such a thing as too much caution. Fear, uncertainty and doubt may save you from losing your shirt, but FUD, when exercised in excess, will also prevent you from making any money – the most regrettable state of affairs imaginable.