Fear, Uncertainty, and Doubt, or FUD, is a big problem in the cryptocurrency industry. As CEO of one of the industry-leading crypto exchanges, I often have to be prepared for dealing with rumors, misinformation and bias, and understand how all of these developments affect the broader crypto industry. While our company is dedicated to countering FUD whenever possible, individual users also have their roles.
The FUD Problem In Cryptocurrency
Anyone active in the cryptocurrency world for some time will know there have been numerous attempts at discrediting the industry. Many people appear to have a vested interest in affecting market prices for their personal gain. The easiest way to do so is by spreading misinformation and hoping it gets picked up by blogs, news outlets, or even mainstream media. Once the momentum starts to build with the negative news, the markets will often shed value, and the orchestrators can profit.
A good example of such a FUD campaign was the report by Zeus Capital LLP — not the UK bank by the same name — and its focus on Chainlink pumping and dumping LINK, including the project's partnerships with major technology players. One of the Zeus reports points at the LINK price skyrocketing by 62% following 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. The reports by Zeus Capital LLP were eventually invalidated and the team disappeared into obscurity when its orchestrated FUD campaign did not deliver suitable results.
The "FUD" factor is, in my opinion, a unique aspect of cryptocurrencies. Although there are technicals and fundamentals, like in any other financial market, FUD seems to be more prevalent in crypto space. That may be due to the inherently volatile nature of crypto markets or the sheer desire of traders to make money at all costs. Either way, FUD is a powerful weapon for speculators and a big threat for the market.
One contributing factor to the success of FUD is the immaturity of cryptocurrency. Although the concept has changed many people's lives — including my own — it is still a very new industry. Moreover, the investors entering the market today will often lack knowledge about how and why these markets go up and down. Many people enter this market and trade with their emotions, which is a surefire way of losing money. Emotional traders are more prone to FUD and often make risky and hasty decisions, creating a cascading effect on market prices.
What Types Of FUD Are There?
Bitcoiners and altcoiners alike have seen their fair share of Fear, Uncertainty, and Doubt. We seem to encounter new fake stories and rumors more often than ever before, which coincides with the ongoing growth of the cryptocurrency industry. However, I have identified the traditional FUD types one is likely to encounter. These misconceptions, some of which are partially true facts, although not telling the whole story, have become engrained in society and sometimes are very hard to remove from people's mindsets.
- Volatility: No one denies cryptocurrencies are volatile, more so than other assets. Measuring the success of Bitcoin and altcoins through a traditional mindset leads to a wrongful interpretation of the volatility and why it happens.
- 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 longer, away, and the necessary technology for large-scale quantum computing is far from production-ready.
- Electricity consumption: There has been a lot of [incorrect] research on the electricity consumption of cryptocurrencies. This confusion turned into FUD that has been around for nearly a decade. Still, much has improved. There are dedicated efforts to rely on renewable energy for Bitcoin mining - up to 59.5% of all hashpower by Q2 2022 - and various other blockchains offset carbon emissions. It is not a big impact in the slightest.
- Company’s insolvency: Another pressing form of FUD is the rumor regarding major trading platforms and exchanges being insolvent. Such rumors have affected many big crypto exchanges including Coinbase and KuCoin. These rumors are getting worse now as crypto industry investors get nervous when bearish trends remain in place, but until proven correctly, they are nothing more than FUD.
Recently, we faced two such FUD attacks that have been successfully countered through the proper investigation process and communications with our users
As part of one of them, a Twitter user "urged" people to withdraw funds from KuCoin, seemingly intended to bring down the value of the exchange's native $KCS token. Ultimately, he deleted his Twitter account after he was publicly unmasked. It is not the first time such a FUD incident occurs, although previous FUDders were mature enough to admit they were wrong. That incident sparked the idea for us to have a new campaign at KuCoin that solely focuses on countering Fear, Uncertainty, and Doubt.
The Anti-FUD Fund
At KuCoin, we take matters like FUD very seriously. While we are a cryptocurrency exchange and trading platform, our mission also includes educating the mainstream on all crypto-related matters. As company CEO, I immediately supported the idea of creating an Anti-FUD fund with the purpose of online and offline anti-FUD education. Our effort will reward industry leaders and influencers fighting the growing amount of Fear, Uncertainty, and Doubt. Additionally, our fund will help track down FUDders who purposefully spread misinformation, and it will take legal action against those individuals if necessary.
As the cryptocurrency industry grows, we need to fight back against those who want to limit innovation and chase personal gain at the cost of others. FUD can significantly impact market prices, but also those who invest in these currencies or are looking to set up their crypto portfolios. With the Anti-FUD Fund, the kid gloves have come off, and it is time to take this to the next level.
Just like FUDders step up their game, it is now up to the cryptocurrency community and its influencers to do the same. FUD needs to be weeded out altogether, and that can only happen by joining forces and closing the ranks.
Image sourced from Unsplash
