Fear, Uncertainty, and Doubt, or FUD, is a major problem in the cryptocurrency industry. As the CEO of one of the industry’s leading crypto exchanges, I often have to be prepared to deal with rumours, misinformation and prejudice and understand how all of these developments impact the entire crypto industry. While our company is dedicated to combating FUD whenever possible, individual users also have their role.
The FUD Problem in Cryptocurrency Anyone who has been active in the cryptocurrency world for some time will know that there have been numerous attempts to discredit the industry. Many people seem to have a vested interest in influencing market prices for their personal gain. The easiest way to do this is to spread misinformation and hope it gets picked up by blogs, news outlets, or even the mainstream media. Once the negative news starts to gain momentum, markets will often fall in value and orchestrators can benefit.
A good example of such a FUD campaign was the report by Zeus Capital LLP – not the British bank of the same name – and its focus on Chainlink Pumping and Dumping LINK, including the project’s partnerships with major tech companies. One of the Zeus reports indicates that LINK price has skyrocketed by 62% following the partnership news, allegedly confirming Chainlink’s self-fulfilling scheme. They also advised users to short LINK to a price of $0.07, although no one seemed intent on following that guideline. Zeus Capital LLP’s reports were eventually invalidated and the team went into obscurity when its orchestrated FUD campaign failed to produce suitable results.
The “FUD” factor is a unique aspect of cryptocurrencies in my opinion. Although there are technical and fundamental aspects like any other financial market, FUD seems to be more widespread in the crypto space. That may be due to the inherent volatility of crypto markets or the sheer desire of traders to make money at any cost. In any case, FUD is a powerful weapon for speculators and a major threat to the market.
One factor contributing to the success of FUD is the immaturity of the cryptocurrency. Although the concept has changed the lives of many people – including my own – it’s still a very new industry. Additionally, investors entering the market today often lack knowledge about how and why these markets rise and fall. Many people enter this market and trade on their emotions, which is a surefire way to lose money. Emotional traders are more prone to FUD and often make risky and hasty decisions, leading to a cascading effect on market prices.
What types of FUD are there? Bitcoiners and altcoiners alike have experienced fear, uncertainty, and doubt. We seem to be encountering new fake stories and rumors more frequently than ever, coinciding with the continued growth of the cryptocurrency industry. However, I have identified the traditional FUD types that are likely to be encountered. These misconceptions, some of which are partly true facts although they don’t tell the whole story, have become entrenched in society and are sometimes very difficult to erase from people’s mindsets.
- Volatility: Nobody disputes that cryptocurrencies are volatile, more so than other assets. Measuring the success of and altcoins through a traditional mindset leads to an incorrect interpretation of volatility and the reasons behind it.
- Quantum Computing Will Destroy Crypto: Advances in quantum computing may impact cryptographic measures found in Bitcoin and other cryptocurrencies. However, such threats are decades if not more away, and the necessary technology for large-scale quantum computing is far from being ready for production.
- Power consumption: A lot has happened there [incorrect] Research on the power consumption of cryptocurrencies. That confusion morphed into FUD, which has been around for almost a decade. Nevertheless, a lot has improved. There are committed efforts to rely on renewable energy for bitcoin mining – up to 59.5% of total hash power by Q2 2022 – and various other blockchains are carbon offsetting. It’s not a big influence at all.
- Corporate Bankruptcy: Another pressing form of FUD is the rumor that major trading platforms and exchanges are bankrupt. Such rumors have affected many major crypto exchanges, including Coinbase (NASDAQ:) and KuCoin. These rumors are now getting worse as crypto industry investors get nervous if bearish trends persist, but until proven correct, they are nothing more than FUD.
Recently we faced two such FUD attacks which were successfully mitigated through proper investigation process and communication with our users
As part of one of these, a Twitter user (NYSE:) “pushed” people into withdrawing funds from KuCoin, apparently aimed at driving down the value of the exchange’s native $KCS token. He ultimately deleted his Twitter account after being publicly exposed. It’s not the first time such a FUD incident has occurred, although previous FUDders have been mature enough to admit they were wrong. This incident gave us the idea to start a new campaign at KuCoin, solely focused on counteracting fear, uncertainty and doubt.
The Anti-FUD Fund At KuCoin, we take matters like FUD very seriously. Although we are a cryptocurrency exchange and trading platform, our mission also includes educating the mainstream on all crypto-related matters. As CEO of the company, I immediately supported the idea of establishing an anti-FUD fund with the goal of online and offline anti-FUD education. Our efforts will reward industry leaders and influencers fighting against the growing amount of fear, uncertainty and doubt. In addition, our fund will help track down FUDders who intentionally spread misinformation and take legal action against those individuals where appropriate.
As the cryptocurrency industry grows, we must stand up against those who seek to limit innovation and pursue personal gain at the expense of others. FUD can significantly affect market prices, but also those who want to invest in these currencies or build their crypto portfolios. With the anti-FUD fund, the kid gloves are off and it’s time to take this to the next level.
Just as the FUDs are stepping up their game, it is now up to the cryptocurrency community and their influencers to do the same. FUD needs to be eradicated completely, and the only way to do that is by banding together and closing ranks.
Image source from Unsplash
Read the original article on Benzinga