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What Is FUD In Crypto? Why It Can Impact Prices


January 2022

If you have been around the cryptocurrency market for even a short amount of time, certain words pop up again and again, such as FOMO, FUD, HODL, and more. As of late, the term FUD has been among the most critical topics discussed across the crypto community, with the likes of Bitcoin and Ethereum and others facing off against governments, celebrity influencers, and economists who claim that the cryptocurrency is bad for the world.

We’re breaking down exactly what the meaning of FUD is, the different types of FUD in crypto and traditional finance, why it exists, how it is used, its potential impact on market prices, and much, much more.

What Is FUD? An Introduction To Fear, Uncertainty, And Doubt

FUD is an acronym that stands for fear, uncertainty, and doubt. When the market is discussing the term FUD, it means some type of negative event has occurred that appears to be suspiciously timed with major Bitcoin price movements that have a large impact on the greater crypto market.

The source of FUD is always changing, but the impact is often the same: lower prices and a market wondering what happened and looking for something to point the finger at. Interestingly, some of the most successful investors in finance history believe that FUD itself can be predicted using technical analysis and the news cycle is part of the overall human behavior cycle that the study of price patterns is actually examining. 

For example, Bernard Baruch, once one of the richest men in America, famously was quoted as saying, “show me the charts and I’ll tell you the news.” But can FUD really be predicted, using technical analysis? And is the fact that FUD appears only around crashes that gives the impression that it is FUD causing the crypto market to react?

Who Uses FUD And Why? Why Does FUD Matter?

FUD is used by the crypto community as part of the overall information that gets priced into markets. Retail investors might get spooked out of positions easily after such negative news is spread, which prompts crypto derivatives traders to go short and the rest is a self-fulfilling prophecy of a correction playing out.

Conspiracy theorists believe that whales and the elite and wealthy are often behind spreading FUD in an effort to negatively impact the value of Bitcoin or crypto, and use this as part of a devious strategy. FUD matters because new investors are easily shaken out, and it causes prices to crash for long-term holders and the average cryptocurrency enthusiast with strong hands.

FUD In The Context Of The Cryptocurrency Market

FUD is especially powerful in the crypto market because the currency Bitcoin is still a speculative asset, and each altcoin is even more speculative at this stage. That means that these assets are highly volatile, making assigning a value even more challenging, and therefore price swings can be dramatic over information that often amounts to be nothing, or often false information entirely.

Cryptocurrency FUD Examples

The problem with the term “FUD” is that it is often used incorrectly, or applied so broadly it is hard to always understand what FUD is, and what should be considered FUD. There are also many sub-categories of FUD, each technically defining as fear, uncertainty, and doubt.

Here are the various types of FUD commonly found across the crypto industry, and the individual themes within each category.

Common FUD

This type of classic FUD are the most basic FUD examples because they are so often used, mostly incorrectly, to prove to others why Bitcoin and other cryptocurrencies are a bad thing.

Technology FUD

This type of FUD is most closely associated with the technology itself. All technologies have pain points. The internet, for example, has led to widespread privacy issues. But it is one of the most enabling technologies in history, allowing mankind to move into the digital age.

Regulatory FUD

Regulatory FUD is the worst kind of FUD, because governments mean business and for the most part, users must comply within the restrictions of the borders they live in. These borderless technologies and currencies are still bound to the rules of which the users themselves live. Governments use this to their advantage, and against cryptocurrencies, often because Bitcoin and other cryptocurrencies pose a threat to the fiat currencies that they rely on to control individual citizens and businesses that operate there.

Miscellaneous FUD

This type of FUD doesn’t quite fit in the other categories and has so much variety to it, it needed a more blanket statement like “miscellaneous” to properly convey what the category is about.

Recent Narrative And FUD Impact

The recent FUD narrative involving Elon Musk and then China, is what made the discussion around the term FUD a hot button debate once again. The narrative first was positive surrounding Musk, who revealed his company Tesla had purchased BTC, and had begun accepting BTC payments toward their green automobiles. Bitcoin price pumped to all-time highs. But then Musk suddenly changed his tune. His company was up for some government funding for their green initiatives, and couldn’t be caught in bed with Bitcoin which at the time became under scrutiny for its impact on the environment.

Because the Bitcoin network was growing rapidly, it was suddenly requiring more and more energy. At the same time, China came under fire from the global community for alleged slave labor in coal mines that were claimed to be used for electricity that fueled Bitcoin mining. 

To stop the negative press, China immediately banned Bitcoin mining in the region, and then later banned cryptocurrencies. The result of the sudden exodus of BTC miners and sellers caused a more than 50% selloff in Bitcoin and other cryptocurrencies, showing how powerful FUD can really be. But was this FUD the reason for the correction or was the timing of the FUD simply the hive mind turning and the trend taking a quick break? The chart below shows the timing of certain news and how prices reacted.

Why FUD Isn’t Always A Bad Thing

FUD isn’t always a bad thing. For example, because so many BTC miners left China seeking a more welcoming environment, BTC mining is now a much greener industry, taking place mostly in the United States under stricter conditions. FUD also creates an opportunity for trading volatility for traders and buying assets a lot cheaper for investors. Bitcoin price is already back at the highs set before the FUD began, proving that it wasn’t a bad thing at all, but another chance to go long and make money on the price swings in between.

Because there is so much subjectivity to crypto FUD, we’ve prepared these commonly asked questions to make it easier to understand what’s going on with crypto FUD.

FAQ: Frequently Asked Questions

What Does FUD Mean In Crypto?

FUD stands for fear, uncertainty, and doubt, although it can often have a broader meaning and there are various types of individual FUD themes.

What Causes FUD In Crypto?

FUD in crypto is caused by changes in trend and human behavior. These moments prey on investors’ and traders' emotions of fear, uncertainty, and doubt.

How Do You Deal With FUD In Crypto?

Technical analysis, and emotional control are two extremely important methods to deal with FUD. Other users who aren’t as experienced often are advised to simply HODL.

What Is The Most Recent FUD Impact On The Crypto Community?

The most recent FUD impact on the crypto market was hands down the Elon Musk situation and the China FUD that followed. FUD will always pop up again and again. Even China FUD happens every several years, especially during the last stage of a Bitcoin bull run.

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 72.4% 61 $41 312.94 -1.79% -2.97% $782 208 393 376 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 65.6% 74 $3 057.90 -4.13% -4.99% $364 557 204 266 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 92.8% 1 $1.000957 0.03% 0.07% $78 389 539 616 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 71.6% 61 $454.95 -4.03% -0.74% $75 119 228 033 BNB 7 days price change
5 Cardano (ADA) ADA Cardano predictions 71.2% 51 $1.37 -11.53% 13.83% $45 869 836 376 ADA 7 days price change
6 USD Coin (USDC) USDC USD Coin predictions 90.8% 1 $0.999548 -0.04% -0.05% $45 742 193 035 USDC 7 days price change
7 Solana (SOL) SOL Solana predictions 62.8% 81 $134.45 -3.98% -3.06% $42 237 959 711 SOL 7 days price change
8 XRP (XRP) XRP XRP predictions 66.8% 64 $0.728701 -3.80% -4.17% $34 732 162 139 XRP 7 days price change
9 Terra (LUNA) LUNA Terra predictions 69.6% 57 $76.09 -1.12% 0.67% $27 219 693 512 LUNA 7 days price change
10 Polkadot (DOT) DOT Polkadot predictions 72% 51 $23.84 -5.97% -7.36% $23 544 579 275 DOT 7 days price change
11 Dogecoin (DOGE) DOGE Dogecoin predictions 77.6% 46 $0.160728 -5.76% 5.59% $21 323 857 260 DOGE 7 days price change
12 Avalanche (AVAX) AVAX Avalanche predictions 62.4% 79 $81.61 -6.07% -9.81% $19 942 092 907 AVAX 7 days price change
13 SHIBA INU (SHIB) SHIB SHIBA INU predictions 68.8% 63 $0.000027 -4.93% -3.67% $15 025 615 032 SHIB 7 days price change
14 Polygon (MATIC) MATIC Polygon predictions 69.2% 59 $2.02 -8.18% -12.60% $14 789 690 265 MATIC 7 days price change
15 Binance USD (BUSD) BUSD Binance USD predictions 96% 1 $0.999731 -0.10% -0.13% $14 211 573 940 BUSD 7 days price change

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