Even if you have been around the cryptocurrency market for a short while, you will often hear certain words like FOMO, FUD, HODL, and others. In the crypto community, FUD has been one of the most topical topics of discussion in recent months, with cryptocurrencies like Bitcoin and Ethereum facing off against governments, celebrities, and economists who claim cryptocurrency is not good for the world.
Here, we’re going to break everything down: what FUD is, what types there are, why it exists, how it is used, how it affects market prices, and much more.
How Does FUD Work? Understanding the Fear of Uncertainty and Doubt
Defining FUD as fear, uncertainty, and doubt is the abbreviation FUD. When the FUD term in crypto comes up, it refers to some form of negative event that appears to be closely related to major Bitcoin price movements that have a significant impact on the entire crypto market.
FUD comes from a variety of sources, but its impact is often the same: lower prices and market confusion as to what happened and what to blame. It’s a bit surprising that some of the most successful investors in finance history have suggested that FUD itself can be predicted with technical analysis and the news cycle forms part of the larger human behavior cycle studied by price patterns.
How and why do people use FUD? What is the importance of FUD?
Crypto communities use FUD as part of the overall information they use to price their products. It is probable that retail investors will get scared out of their positions after such negative news is spread, causing crypto derivative traders to short, and the rest just plays out like a self-fulfilling prophecy.
According to conspiracy theories, wealthy individuals and whales are often behind spreading FUD in order to negatively affect the value of Bitcoin and other cryptocurrencies, which is part of a devious scheme. For long-term holders and the typical cryptocurrency enthusiast with strong hands, FUD causes prices to crash, since new investors are easily shaken out and shaken out easily.
The Cryptocurrency Market As A FUD Environment
The crypto market is especially vulnerable to FUD because Bitcoin is still a speculative asset, and all altcoins are even more so. This means that the assets tend to be highly volatile, which makes assigning a value even more difficult. As a result, price swings are sometimes dramatic over information that amounts to nothing or is inaccurate.
FUD Impact Of Recent Narrative
In light of Elon Musk’s recent FUD narrative and China’s actions, the FUD concept has once again become a hot topic.
First, the narrative centered around Musk, who announced his company Tesla had acquired bitcoin, and had begun accepting bitcoin payments toward their green cars. The bitcoin price rose to record levels.
Musk then changed his tune suddenly. At the time, Bitcoin was under scrutiny for its impact on the environment, so the company was eligible for some government funding for green initiatives.
Due to the rapid growth of the Bitcoin network, energy was suddenly becoming more and more scarce. Chinese coal mines were accused by the global community of using slave labor, which was alleged to be used for energy that fueled Bitcoin mining.
