Maybe the word fud (FUD) is a bit unfamiliar to you. In fact, Fad is the shortened form of the three main words “fear, uncertainty, doubt”. These three words in English are “fear, uncertainty and doubt” which form the beginning of the three main words FUD. Fad has become a popular term. This term is mostly used by digital currency users in the world of digital currency trading such as Ethereum and Bitcoin.
The shortened form of the three main words “Fear, Uncertainty, Doubt”
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The use of the word fad in the world of digital currencies
Now you may be wondering when this word is used? This term is used when a person or persons publish news or information about a specific digital asset. They spread these rumors in all kinds of media. These media include sites, social messengers such as Telegram, WhatsApp, Facebook, Twitter, etc. These negative news causes, intentionally or unintentionally, a feeling of fear, instability and doubt among the investors of these currencies. This is despite the fact that the truth or falsity of this news has not been proven and this information is not valid!
Of course, some bigoted and ignorant people who are active in the field of digital currency may also consider reliable and trustworthy information to be fake. Sometimes it is possible for a famous person to express his opinion about one of the digital currencies and his opinion is not favorable and positive. Immediately after this comment, his statements are published on social media one after another. Although there are no solid technical and fundamental reasons and no analysis confirms this opinion, but Fad will unintentionally affect many investors of the digital currency markets, and this will cause investors to withdraw only because of a published news. Trustees who have had bad effects on them (fear, uncertainty, doubt) sell their digital assets!
The behavior of investors who have suffered a fad!
The behavior of investors who have suffered a fad!
Imagine that the work reaches a point where the volume of sales becomes very high, it is natural that due to these published news, the demand for purchase will also decrease. As the supply exceeds the demand, the value of the asset will suffer a sharp drop. With the spread of fad in popular and important media, the effects will increase. Meanwhile, some investors enter the said digital asset with a short position. Here too, you may have a question about the difference between long and short trades. To summarize, longing is when we expect a price to grow in the future and shorting is when we expect a price to fall in the future.
After some time, the trend of falling prices due to invalid and false news will stop. Then the price of the digital asset is fixed. Gradually, the value of the property reaches its true value. What has happened? Unreliable news and information has caused some people to make huge profits! It is even possible that these people start working and buy in unofficial markets before publishing misleading news.
Although it seems that sometimes the news and information are false or misleading, but sometimes they are true. Therefore, as a trader, we have a duty to look at all aspects. Of course, one should not lose sight of the fact that some people can have motivations to spread and share unreliable news and information.
Let’s get acquainted with similar terms in the field of cryptocurrency:
In the following, it is better to learn more about some common terms in the field of digital currency around the word fudge (FUD).
The term Fudders
This term is used for people who spread the news that leads to fads.
The term Stop the FUD
This term refers to the imperative sentence “stop spreading fad.” has it. That is, stop spreading unreliable news that brings fear, doubt, uncertainty and correctness!
In this article, we learned about the term FUD. Phad stands for fear, uncertainty and doubt. This term is used in most financial markets. Although its use is more common in the field of digital currency. The purpose of spreading false news and spreading fad is to discredit and defeat a company, company product or even a project. This word is in a way the opposite of the word fumo. In spreading news that leads to fads, fear, doubt and uncertainty are created, and some profit-seeking people get exactly what they want in this situation!
People who have a fad are worried about the possible loss in their investment and the fall of the part of the market in which they put their capital. While this concern is not reasonable. These cases can also be seen in the capital market. Of course, this issue and the influx of people who are looking for negative news to sell their currencies, is more commonly known as Fad in the digital currency market.
Fad can be a destructive strategy used by competitors to neutralize a company’s competitive advantage or profitability in order to devalue the rival company’s stock. These issues are all caused by potential (not active) and destructive (not constructive) news. The purpose of spreading these false news is to provoke the investors of certain currencies at a certain point of time to create a psychological war in their minds and souls. Finally, these excited investors will be willing to sell their currency at a low price, and profit seekers will buy the particular cryptocurrency at a low price and low value.