Although it often occurs with false news and manipulative statements about cryptocurrencies, sometimes there may be situations that unconsciously create FUD. Investors and users, in the environment of uncertainty and panic, sell the cryptocurrencies they hold and turn them into fiat money.
Negative agenda topics or deliberately spread rumors about the general cryptocurrency market or a particular cryptocurrency create fear, uncertainty and doubt in users. In this uncertainty environment, users do not want to hold cryptocurrencies in the short or medium term and make sales. Of course, if this sale is high enough, it will cause the market to fall in general. In this way, FUD fully worked and created uneasiness in the market, causing a decline.
FUD in the Cryptocurrency Industry
FUD is a concept that is also used outside of financial markets. However, the term is most commonly used in the financial markets and cryptocurrency sector. Bitcoin and cryptocurrency markets are an area that is live and active 24/7, developments flow fast, and social media interaction is high. For this reason, financial crises in some countries, negative news and gossip or rhetoric spread by social media accounts with a high number of followers can affect the market in a short time.