What is FUD in Crypto? (Beginner’s Guide 2025)

What is FUD?

FUD stands for Fear, Uncertainty, and Doubt . 

FUD refers to the spread of negative, misleading, or false information designed to get investors to sell their assets. 

FUD exists in traditional markets — but it’s especially prominent in cryptocurrency due to its volatility and fast-paced nature. This means that fake news on social media can have a major impact on the price of digital assets. 

The Kraken Crypto FOMO Survey 2024 found that 81% of crypto investors admitted to making investment decisions based on FUD. 

Why is FUD bad? 

FUD can be used to manipulate the market and mislead investors: 

• Panic Selling: Investors dump their assets, causing the price of the cryptocurrency to fall. 
• Missed Opportunities: Investors who fall for FUD may sell too early, missing out on potential gains.
• Whales and Institutions Benefit: Cryptocurrency whales can potentially use FUD to buy cryptocurrencies at discounted prices. 

Is all bad news FUD? 

While some investors refer to all negative news as FUD, the term refers to the intentional spread of misinformation. 

It’s important to remember that some news reports portray real risks in the cryptocurrency ecosystem. For example, news of FTX’s impending collapse in 2022 surfaced on outlets like CoinDesk and on social media platforms. 

Before you react to negative news, always consult trustworthy crypto news sources and verify the information for yourself. 

Who gets impacted by FUD? 

Typically, new crypto investors are most likely to sell their assets due to FUD. 

Because new investors often rely on social media and news headlines for trading decisions and are not yet used to the natural volatility of the crypto market, they are more susceptible to panic selling. 

6 ways to deal with FUD 

Here are 6 ways to deal with FUD: 

• Diversification & Risk Management: Remember that cryptocurrency is inherently volatile. For this reason, many investors recommend investing a majority of your portfolio in less ‘risky’ assets like stocks and bonds. 
• Stay Rational: Focus on long-term fundamentals instead of emotional reactions. Keep in mind that most successful cryptocurrency investors have maintained their investments through several bear markets. 
• Review Your Investment Thesis: If your original investment thesis still holds true, you should consider holding on to your cryptocurrency. Consider whether facts and circumstances have changed or the crypto is simply experiencing natural volatility. 
• Ignore the Noise: Avoid obsessively checking price charts and reacting impulsively.
• Set Clear Goals and Limits: Before you invest, decide on a price where you’ll buy (entry point), a price where you’ll sell to take profits (exit point), and a price where you’ll sell to cut losses in case of a market crash (stop-loss). Planning these levels in advance helps you avoid emotional decisions. 
• Use dollar cost averaging (DCA): Dollar cost averaging refers to regularly scheduling cryptocurrency buys — for example, buying $100 of BTC every week. This strategy allows you to stay disciplined and build up your crypto holdings through market volatility. 

Why effectively managing FUD is important 

A Santiment study in December 2024 showed that Bitcoin’s social sentiment hit its lowest point of the year. Just one month later, BTC hit its all-time high of $109,000. 

Remember, negative sentiment often precedes price rallies. That means tuning out FUD and going against the grain can help you be a more successful trader. 

Other crypto terms you should know 

Let’s walk through some other popular terms in the cryptocurrency community. 

• HODL: The term ‘HODL’ comes from a post on a Bitcoin forum in 2013 — where a user misspelled the world ‘hold’.  HODL has become a rallying cry to hold on to cryptocurrency for the long-term. 
• FOMO (Fear of Missing Out): FOMO refers to buying into a cryptocurrency out of fear of missing out on gains — instead of research into its fundamentals. 
• WAGMI (We’re All Gonna Make It): WAGMI is an optimistic slogan — a reminder to investors about the potential of the cryptocurrency ecosystem. 
• Paper Hands: ‘Paper hands’ is used to refer to traders who sell their assets immediately because of FUD or volatility. 
• Diamond Hands: ‘Diamond hands’ is used to refer to traders who hold their assets for the long-term — despite price drops and negative sentiment. 

Conclusion

FUD is an unavoidable part of crypto investing. Learning to recognize and manage FUD can help you make better trading decisions. By staying informed, fact-checking news, and maintaining a solid investment thesis, you can avoid being swayed by fear-based narratives.