The Four Types of FUD and How They Can Help You

Crypto enthusiasts often dismiss anything negative as FUD. But not all FUD is created equal, and some kinds of FUD can help you.


fear uncertainty doubt

If you’ve been in the cryptocurrency space for a minute, you’ve doubtless seen other people criticized for spreading FUD (Fear, Uncertainty, and Doubt) on social media. You may even have been accused of spreading FUD yourself.

When FUD comes up, it’s often treated like a dirty word, and dismissed as little more than sour grapes. But it shouldn’t be. Posts that crypto enthusiasts call FUD are often beneficial to the blockchain industry. They can even be beneficial to your wallet if you know how to identify them properly, because not all FUD posts are created equal.

Here are the four types of FUD and how you can profit from them:

(I’m going to include some hypothetical example FUD posts about Bitcoin, not because Bitcoin is particularly deserving of FUD, but just because it’s the best-known cryptocurrency.)

Brainless FUD

brainless fud

These are the FUD posts that are absolutely baseless and patently stupid. They’re very low-effort (often just one or two sentences) and they make no effort whatsoever to cite any kind of evidence. If you see the word “shitcoin” in a post about that coin, there’s a good chance it’s brainless FUD.

These types of posts typically come from fans of rival projects, bitter trolls, or bots.

Example of Brainless FUD: “Lol BTC is a shitcoin, can’t believe anyone invests in this dinosaur coin lmao.”

How you can profit: Ignore it. Baseless criticisms might drop the price of a coin in the short term, but if the coin has genuine merit, it’s sure to bounce back in the long run. If you see a lot of brainless FUD about a coin you’ve identified as a worthy investment, see if it’s causing a dip – it could create a good opportunity to buy a good coin at a discount.

Baseless FUD

baseless fud

Baseless FUD posts are more targeted and high-effort than brainless FUD posts, but they’re still not making any legitimate criticisms. They often look more credible at first glance because they tend to be lengthier, and they raise specific criticisms rather than just spewing invective. But a little research on your part will reveal that these criticisms are without merit – maybe they’ve been addressed by the dev team already, or maybe they’re just straight-up lies.

Like Brainless FUD, Baseless FUD might come from fans of alternative crypto project, but it could also be a targeted marketing tactic operated by a competitor, or even an honest post from a well-meaning but misinformed investor who’s passing along hearsay without double-checking the facts.

Example of Baseless FUD: “If you take a look at the structure of Bitcoin, it’s actually just a pyramid scheme. The value keeps growing because Bitcoin’s owners are stoking the fires just to increase their own profits. In actuality, Bitcoin is completely worthless because it’s just a series of ones and zeroes.”

How you can profit: Again, ignore it but watch for potential FUD-created dips as buying opportunities if a baseless FUD post gets widespread attention or goes viral.

Biased FUD

biased fud

Biased FUD posts raise legitimate, evidence-based issues with a coin, but are only presenting one side of the story. That bias could be intentional and self-serving, but it could also be the result of ignorance or simply the reflection of a personal opinion. Often, though, Biased FUD posts will criticize one coin because they’re trying to promote an alternative coin that the poster is invested in.

The crypto community tends to dismiss these posts as worthless (they’re not) because they’re biased (they are). Biased people can still make good evidence-based arguments, and while there are two sides to every story, that doesn’t mean that both sides have equal merit or will be equally convincing to you.

A Biased FUD post might present a good, evidence-based argument that you agree with. It’s not presenting the counter-arguments to the points it’s making, but that doesn’t make it wrong, it just means you need to do a little more research to see what’s been left out.

Example of Biased FUD: “Bitcoin’s growth period is over and the bubble is going to pop. Transaction fees are high and the network is too slow for it to be an effective digital currency, especially with competitors like RaiBlocks that offer instant, free transactions.”

How you can profit: Identify and isolate the bias, and then evaluate specific criticisms on their own merits. In the above example post, it’s obvious the poster has an agenda (promote RaiBlocks) but that doesn’t mean their criticisms of Bitcoin’s network speed and transaction fees are baseless.

You can use posts like this to make more informed investment decisions so long as you can spot the bias, account for it, and make sure you research the counter-arguments so you can decide for yourself which side you find more convincing.

Fair FUD

fair fud

Fair FUD is criticism that’s entirely grounded in objective reality, and free of apparent bias. These comments might be short or long, but they raise objectively real problems or questions about a cryptocurrency. Fair FUD could be anything from a quick post about BTC’s high fees to a lengthy news report exposing how a particular coin’s whitepaper contains elements plagiarized from other blockchain projects’ whitepapers.

Fans of the crypto being criticized often dismiss these posts (“stop spreading FUD!”), but they do so at their own peril. Fair FUD posts are good for the crypto community – truth and transparency are always good things, and in the long run if there’s a problem with a project it’s better to hear about it as early as possible.

But they might be bad for your investment, which is why Fair FUD posts often get drowned in criticism and downvotes from people who see them as a threat rather than recognizing them as a valuable source of intelligence.

Example of Fair FUD: “Bitcoin’s transaction fees are higher than many of its competitors’s fees.”

How you can profit: Take Fair FUD seriously even if it has been heavily downvoted or criticized. Don’t fall victim to the cognitive bias of regarding the news you want to see as being true and news you don’t want to see as being false.

Remember, if a so-called “FUD” post raises a legitimate criticism of a coin you’re invested in, that benefits you. Knowledge is power, and with the knowledge that there’s a problem with this coin, you can decide for yourself whether to stick with it or cut your losses. And knowledge of the problem could also push the crypto’s dev team to address the issue, leading to a stronger product in the long run.

Even if it hurts in the short term, Fair FUD is really helping you, so long as you can recognize it and resist the temptation to miscategorize it as Baseless FUD because that’s what you want it to be.