Beginner guide – How to avoid Crypto FUD
Walmart accepting Bitcoin payment or China’s banning crypto-related services are just two in several crypto FUD today that might destroy your investment in a few days. So how do know when it’s coming out? In this article, Tokenize Xchange would like to dive deeper into crypto FUD – a common concept in the crypto investment and some tips to avoid crypto FUD.
What is crypto FUD
FUD is a jargon standing for “Fear, Uncertainty, and Doubt”. In the field of crypto investment, FUD is a strategy to manipulate cryptocurrencies (especially Bitcoin) and the crypto market in general by spreading fake news or misleading information. Accompanied with FUD is FOMO – the fear of missing out. In the previous article, we explained to you the symptoms of FOMO and 5 tips to help you stay away from it.
Crypto FUD news may drive to the bearish trend in the market, making investors panic sell while FUD news spreaders would take advantage of the situation and buy-in.
FUD is also a slang used by crypto traders to describe their suspicion when the cryptocurrency market suddenly goes bearish in the short term. Many crypto traders even use this concept to describe any bad news against Bitcoin or crypto in general.
Though having a negative meaning, FUD expresses the derailments surrounding the topic of cryptocurrency. This slang is widely used on social networks that support cryptocurrency like Twitter, Reddit, and Discord.
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Recent crypto FUD news
Though not a new trick, crypto FUD news is still commonly used among the crypto community to create the panic and FOMO mentality. Below are some recent crypto FUD news.
Walmart accepts bitcoin payment
According to CNBC, Litecoin, an alternative to the cryptocurrency Bitcoin, gave up a 20% gain and tumbled back to Earth after a fake press release sent out by GlobeNewswire that referenced a partnership with Walmart, the biggest retailer in the U.S.
However, Walmart spokesman Randy Hargrove confirmed that the press release was “not authentic”. Also, Walmart had contacted the Newswire company to investigate how the false information was published.
China ban crypto trading
China has prohibited all crypto trading and vowed to root out mining of digital assets, driving the toughest blow yet to the industry.
According to the People’s Bank of China, Crypto-related transactions will be considered illicit financial activity, including services provided by foreign exchanges. It added that cryptocurrencies, including Bitcoin and Tether, are not fiat currencies and cannot be circulated.
As a result, Bitcoin dropped in the wake of the announcement, falling 8% to about $41,000 as of 9 a.m. in New York.
3 tips to avoid Crypto FUD
1. Double-check the FUD news
Remember, FUD news would target investors who are the least informative and knowledgeable. Hence, when facing crypto FUD news, you’d better ask yourself 3 questions:
- Is the news coming from a trustworthy source?
- Will this news make people panic sell/ or buy?
- Who will get advantages from this situation and how they will be affected?
Don’t forget to search for various responses to the news, including opinions from crypto experts. You might be overwhelmed by loads of the information, as such, you should choose the one that is able to explain the situation in a logical way without biases and misleading.
2. Do not share crypto FUD news
The development of social media has made FUD news easier to spread. It’s the human nature to quickly react to the bad news rather than good news and warn others in the community. However, the more news is shared, the more fear is caused, then more and more news continues to be spread. This cycle would keep replaying again and again.
We could stop this vicious circle by not sharing FUD news. Instead, sharing the truth and support each other in the middle of FUD storms.
3. Profit from FUD
Since FUD has been a common thing in the crypto community, most traders should prepare for the worst situation and have strategies to take advantage of the market volatile. When your profit is increasing due to the FUD cycle, timing is the most important.
Don’t worry, it’s not greedy to earn your profit, it’s simply how the market works. Sell high and take your profits in the middle of the FUD storm and then buy back when the price tumbles, waiting for the price to go up again.
Now you’ve understood what is FUD and how to avoid crypto FUD. Which crypto concept do you want us to explain? Don’t hesitate to tell us in the comment section below and keep following Tokenize Blog for more articles about the cryptocurrency market!
Cryptocurrencies are subjected to high market risk and volatility despite high growth potential. Users are strongly advised to do their research and invest at their own risk.