FUD, which stands for “Fear, Uncertainty, and Doubt”, is a term widely used in the crypto industry. Essentially, it refers to spreading false or exaggerated news, which can damage a digital asset’s value. The term is highly prevalent on social media platforms such as Reddit, Twitter, and Discord, where crypto enthusiasts congregate. FUD can create unnecessary panic and cause an asset’s price to plummet, making it a common tactic malicious actors use to manipulate markets.
Crypto enthusiasts and influencers use FUD to describe statements of non-crypto believers, called FUDDERs or FUDsters. These individuals or parties criticize crypto projects without solid evidence, needlessly sowing unfounded fear, doubt, and uncertainty.
FUDDERS are the opposite of laser-focused Bitcoin and cryptocurrency optimists who believe the future will be more transparent, communal, and driven by the underlying blockchain technology. A notable example of such crypto pessimists is Warren Buffet.
Below are five classic points and statements from crypto non-believers who spread FUD.
- Bitcoin and other cryptocurrencies are valueless
- Cryptocurrencies enable crime and cyber attacks
- Cryptocurrency mining is harming the environment
- Governments will soon ban Bitcoin and crypto
- Bitcoin is the biggest Ponzi scheme of all time.
Crypto enthusiasts readily debunk such statements. In their assessment, they discover that their claims are bogus and don’t hold water.
FUD in crypto: who uses it and why?
FUD can be used by several entities or individuals to serve their goals. Over time, observations have been made showing FUD as a tool used by the media, who disseminate certain information to drive fear, uncertainty, and doubts to the general public.
Some influential public figures also use it. Critics like Warren Buffett often cause FUD when they conclude that Bitcoin is an unworthy investment that’s nothing more than “rat poison squared”.
Often, the goal of FUD is to draw capital away from cryptocurrencies. This way, the asset’s value is impacted, forcing prices down.
FUD and the Media
The media exploits cryptocurrency daily by publishing news for their sole benefit and profits. Most FUD-causing headlines are click baits. Examples are when Bitcoin is referred to as a “bubble” or “a money-laundering tool for criminals”. In essence, Bitcoin has not been in a bubble, and solid statistics reveal that the coin has been consistently outperforming traditional markets by several magnitudes. Bitcoin rose one million percent in the last decade alone and topped the performance chart. Most other crypto projects also followed the same trajectory.
Meanwhile, using select cryptocurrencies like Bitcoin or Ethereum for money laundering can’t be the best, even if these networks are pseudonymous. All transactions can be tracked online, and their IDs can be decrypted depending on how disciplined the sender or receiver is. The situation worsens because platforms demand the submission of revealing information as part of account registration and compliance with regulators’ requirements.
Frequently, when FUD articles are dissected for facts, they turn out to be baseless and purely click-bait, meant to drive traffic. The same can be seen in cable TV and other media where FUD aims to whip up culpable people’s emotions for traffic.