What Does Bitcoin FUD Mean

2 years ago · Updated 2 years ago

✍️ 28 March, 2023 - 5:07 👤 Editor: Jakub Motyka

FUD is a widely used term in crypto, especially during the bear market.
So, what does FUD mean, and what are the examples?

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Bitcoin FUD, or FUD generally, stands for "Fear, Uncertainty, and Doubt". The term is not new, it dates back to 1920, but the use of the abbreviation FUD started in 1975. The story behind it, according to Wikipedia, is that when an executive at IBM left the company to start his own, he discovered that the technology giant was using FUD to maintain its customer base.

FUD has since gained popularity in business segments like marketing and public relations as a psychological manipulation of investors through disinformation. It is the opposite of FOMO (Fear of Missing Out) - while FUD is driven by fear, FOMO feeds on greed. FUD makes investors pessimistic and anxious, often pushing them to make irrational decisions. It spreads quickly and often conveyed through social media.

FUD, FOMO, And 'Hodl' In Crypto Trading

Trading experts have observed that smart investors use both FUD and FOMO as a strategy for profitability. When the market is under FUD (fear), they buy the dip, and when the market is facing FOMO (greed), they sell the rally. Cryptocurrency traders also use "hodl" to counter FUD. Hodl is another term in the crypto space that emerged from an old Reddit post meaning "hold on for dear life."

FUD happens when there is a big event in the market or when prices are dropping. Some of the examples are the introduction of new cryptocurrency regulation, the emergence of a pandemic, or a possible insolvency of a company, which is more common in the crypto sector. The reason FUD affects most crypto investors is because of the early stage of development in the sector.

Why Cryptos Are Vulnerable To FUD

The cryptocurrency space is a young industry characterized by heightened volatility. The technology is still new, and some investors are yet to fully understand the constantly emerging blockchain projects. For that reason, the sector is a victim of FUD. Some examples of FUDs include China's Bitcoin ban.

Although the event happened once, in September 2021, media platforms have reported on the news severally to create FUD. Crypto regulations and matters of taxation are the other areas affected by FUD.

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Jared Kirui

EN: Jared Kirui is an experienced financial writer with a passion for all things blockchain technology. Previously, he was into stock markets and forex, providing asset managers with top-notch content. With a flair for producing high-quality articles, he started covering crypto news in 2021. He is open-minded, trades for fun, and enjoys sports.

ES: Jared Kirui es un escritor financiero experimentado apasionado por todo lo relacionado con la tecnología blockchain. Anteriormente, estuvo en los mercados bursátiles y forex, brindando a los administradores de activos contenido de primer nivel. Con un don para producir artículos de alta calidad, comenzó a cubrir noticias crypto en 2021. Tiene una mente abierta, comercia por diversión y disfruta de los deportes.