FUD: How it Spreads and How to Stop It.
Fear, Uncertainty, and Doubt (FUD) runs rampant in the digital world and cryptocurrency is not immune to it. We have all seen FUD crypters at work online, whether it relates to political news or the financial industry or social issues, and the coin craze has taken its fair share of hits, too. Anyone considering launching an ICO should understand this is a real problem and should be prepared to face it head on to avoid failure. We will take a look at the ways in which FUD affects cryptocurrency and provide some practical tips to combat this growing issue.
FUD and its Effects on Cryptocurrency
When FUD is generated by the media (social media or traditional news outlets) the likely result is that a coin price will drop, even if the FUD is not substantiated by actual facts. Rather than grounding the claims, in reality, the FUD is simply based on subjective claims that spread like wildfire. Few people are immune to this; even the most rational and educated individuals have fallen prey to FUD, whether it is a sudden ban on a favorite potato chip after a story goes viral that a rat’s toenail was found in a consumer’s bag or discontinuing a music subscription after one commentator declares the music company’s CEO has ties to a criminal organization. People get swept up in these stories without taking the time to substantiate the facts and, let’s face it, the rat’s toenail story may have come from a competing potato chip company! The CEO of the music company may have been photographed near a criminal kingpin at a cocktail party without ever having spoken to him. Stories spread quickly in a digital world; when the stories are true the speed of information can be useful; when the stories are fabricated, the speed can be disastrous.
FUD is a tactic that is used intentionally by some (it’s not just about spreading gossip for gossip’s sake) and it is easy to generate in a world where one tweet can change everything. FUD can be based on a company’s desire to cast “doubt” on their competitor’s product. When it comes to FUD in the cryptocurrency market, some analysts suggest that volatile market swings are associated with a high number of unsophisticated investors who are participating, i.e. people who are easily influenced by FUD.
The origins of FUD long predate the age of digital currency. In fact, the term was first coined in 1975 when Gene Amdahl left the giant IBM to start his own competing business and he is believed to have stated: “FUD is the fear, uncertainty, and doubt that IBM sales people instill in the minds of potential customers who might be considering Amdahl products.” Of course, the roots of FUD have been around for as long as man has communicated.
How to Tackle the FUD and Stop it from Spreading
Bad news spreads quickly, whether it is grounded in truth or not, and attempting to stop it sometimes feels akin to standing in front of a speeding train. However, anyone trying to make headway in the cryptocurrency market has to get out in front of it and tackle it head on for an ICO to launch successfully and thrive.
Your marketing initiatives need to be clear and consistent to prevent FUD from spreading. FUD will not fade away on its own; it will fester and grow once a story starts to spread. Active participation in communicating with your target audience to quell fears and panic is the most important thing you can do. Respond to specific, erroneous media claims with clear and concise facts, and do so quickly. Whether you have one individual managing this or several members of your team, you must stay abreast of all the news that is circulating and be prepared to address it on your own site as well as social media forums.
It is also important to recognize that any industry will have its growing pains and reporting on them is not always an attempt to spread FUD. Prices will fluctuate, regulations will change, and active participants need to keep a level head in light of these changes. Many people involved in and investing in the industry think the long-term potential for cryptocurrency remains strong, and they have learned to weed out the FUD from the legitimate reporting.
It is, therefore, up to the industry as a whole to work collectively to drown out the FUD. Triggered reactions that are based in fear and panic can happen to anyone; it is up to all who participate to actively work on how they react to sensationalized statements (and in turn not have kneejerk reactions in terms of how they invest). The industry needs strong voices who can help articulate to large groups whether a problem is real or if it is manufactured FUD. When the problems are real—whether they are related to tech failures or poor communication—there are proactive ways to acknowledge and address them. Will the ICO be tweaked or improved in some way based on what was learned? Can positive information be shared to calm investors’ fears and concerns?
Succeeding (and surviving) in the crypto market requires a level head—someone who is willing to stay involved throughout wild swings and ups and downs in the market. If fear drives you to react quickly and panic, the crypto world is definitely not the place for you! The wild swings are not going to disappear overnight and only those who can go with this flow (and not let FUD take them down) will stand to succeed and benefit financially.