To begin with, fear, uncertainty, and doubt (FUD) are not initially from the Crypto space. Markets and public relations use this movement. Traditionally, FUD relates to a malicious marketing strategy that involves disseminating negative information about competitors of a particular company, with the final goal of undermining their credibility.
The idea is to invite unfavorable opinions and speculation about the products or services of competing businesses so that customers lose confidence in them.
So, can you really profit from fear, uncertainty, and doubt in crypto?
FUD in Cryptocurrency
FUD has become part and parcel of the whole crypto space from the first years of its existence. Whenever a new project or coin appears on the market, it inevitably faces high volatility and price fluctuations, which sometimes cause doubt and uncertainty there.
Some of these projects compete with each other, while others are made to have the best features in the whole Crypto space. Therefore, with that, FUD is spread by competitors themselves or their holders to harm a project’s price and reputation to buy it at a lower price.
What is FUD
FUD is an acronym for Fear, Uncertainty, and Doubt. It describes spreading dubious or false information about a business, startup, or cryptocurrency project. It describes negative sentiments that spread around traders and investors when bad news comes out or when the market presents a solid bearish downtrend.
Besides, it is used mainly in crypto news and the stock market to emotionally manipulate people into selling their crypto holdings.
How can you profit off of FUD
Shorting
If you sense that FUD is happening within a specific crypto coin or token, you can always short it, or the profit will go down.
Buy when the market is low
For example, the price went up when Tesla said they were accepting Bitcoin. Additionally, when they bought 1.5 billion dollars in Bitcoin, the price also went up. When they said they were no longer accepting it, the price went from around $49,000 to as low as $35,000, and this presents a unique opportunity for Bitcoin believers around the world to buy a bunch of coins.
So this is an excellent example of FUD because the reasoning was due to environmental impact. It is a guarantee that when they bought $1.5 billion bitcoin in the first place, they knew exactly what they were getting into. Also, they did not immediately sell the bitcoin they were accepting. However, when the price dropped from $49,000 to $35,000, it offered a massive opportunity to people who believe that someday bitcoin will hit 100,000 or even half a million
Takeaway
Although FUD is deemed an unethical practice, it is pretty frequent in the business space.
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