Updated: Jun 29, 2021
You may have seen this acronym FUD used quite a bit on social media and especially when referring to stocks and cryptocurrency. It stands for Fear, Uncertainty, and Doubt and is a tactic used by an opposing party such as an Institution, holder of a different stock, and/or paid basher in order to create an opportunity or promote a different stock or cryptocurrency by swaying hearts and minds.
When used properly FUD can cause someone to panic sell which drives the price down and lets someone else pick up those shares at a discount. Some may know that news is coming and the price will go up so they want to purchase the stock at the lowest possible entry point. Trash-talking a stock or crypto can also plant the seed of a different opportunity by showing alternative stocks or cryptocurrencies. Sound alot like information warfare? Understanding the psychology of the market pool will help you navigate it.
There are many types of Investors and FUD is something all of them will encounter. Depending on a person's risk tolerance or emotional state FUD can cause a reactive response depending on what kind of news or sentiment is being spread. Often you will hear people say to not get emotional, not to get married to stocks or cryptocurrencies.
You will find that when things are looking down out will come the poop emojis, terms like shit stock, shitcoin, etc. This is one of the most vulgar and blatant tactics to promote a negative state of mind.
Others may employ fake news, false numbers, and spread misleading rumors. Seeing a lot of posts like this may turn would-be investors away or help push current investors to sell at a loss. Understanding that this is a tactic will help you navigate the stock and crypto markets. Would you trust a stranger on the street? Then why would you trust an anonymous user online, especially a post with no substantive information?