Crypto Glossary

FUD

An acronym that stands for Fear, Uncertainty and Doubt.

The term is used to refer to misleading or inaccurate information that is seeded into a market and spread around with the intention of causing fear and triggering a sell-off. The purpose is usually to drive the market price downward.

Yes, “fake news” happens in crypto, too. 🙂 All the time, in fact. Sometimes, FUD is intentional while other times it can be the result of the social media rumor mill. Many times, one little piece of information (or even just one quote or a tweet) can end up sparking a whole social media rumor mill that blows something way out of proportion, or even results in outright falsehoods. Sometimes, this FUD even finds it’s way onto some of the major crypto news websites and that only magnifies the issue.

The result is the same. It can cause the market value of a coin to drop because the FUD causes people to sell – even if for no legitimate reason than just being freaked out about the “news” they just saw. This lowers the price, therefore presenting an opportunity to others to swoop in and buy that coin at a lower price.

FUD is pretty much the opposite of FOMO. FOMO is basically greed and causes people to buy so they don’t miss out on future profits. FUD is fear and causes a market sell-off. These two forces are major drivers of market volatility.

FUD does not have to be false. Merely being “fake news” (which happens alot, actually)  is not what makes it FUD. Sometimes, there is news that can be legitimate and not  be good for the market. So, FUD is not about the information. FUD is all about the emotional effect in the marketplace. It is about the fear, uncertainty and doubt that is generated. And it can snowball.

FUD is a strong market force. The best way to deal with it is to focus on the fundamentals of the market rather than the emotion. And, as a trader, be aware of the effect of FUD because a smart trader us able to use the opportunity to purchase more crypto at a discount while others are freaking out around them.

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