Another post in the Bitcoin Series by John Cannon.
In the world of cryptocurrencies and Bitcoin, the acronym F.U.D. is popular. It stands for Fear, Uncertainty, and Doubt. I would also add an “I” to the acronym and include Ignorance, which is simply a lack of knowledge or information about something.
Why does this matter? It turns out F.U.D. has a significant influence on the price of Bitcoin.
In my forums, (click here to join the next one!) I present that determining the price of Bitcoin is a very simple task. You take the amount of money in the Bitcoin ecosystem and divide by the number of coins in circulation. How can Fear, Uncertainty, Doubt, and Ignorance have any influence on the price of Bitcoin if it isn’t part of that equation?
A large portion of the investors in Bitcoin are what the financial world calls “retail investors,” (a.k.a. you and me). We are not the institutional investors, private equity, venture capitalists, high net-worth individuals, nor are we not sophisticated investors.
We are normal people who think Bitcoin is important and have purchased a little bit and want to watch it grow. This is not normal. Retail investors are usually the last group that has the opportunity to invest in something; often times after the big profits are gone. Bitcoin is different and we get a chance to be involved in brand new technology early in the game.
Retail investors tend to be skittish, however. We don’t like to receive bad news and when we do, many pull money out of Bitcoin and switch back to U.S. dollars. That all makes sense, but the problem is a great deal of the news on Bitcoin (and other cryptocurrencies) is just plain wrong. The inaccurate information that is being shared aids in spreading Fear, Uncertainty, and Doubt and shows the media ignorance of Bitcoin.
Two of the many examples of F.U.D. reporting include a January 8, 2018, Reuters report that said South Korea is going to ban cryptocurrencies. South Koreans represent a huge portion of the Bitcoin market and this was bad news. A couple days later Reuters pulled the story and clarified that the South Korean government is looking into new regulations. Not a ban at all and not really bad news.
The second example took place in India on February 1, 2018. The Financial Times reported that the Indian government was going to crack down on cryptocurrencies. Actually, the Indian government said they were going to crack down on “illegal activities” that use Bitcoin. Crimes can and are committed with Bitcoin – and every other currency in the world.
I expect the media will get better at reporting news about Bitcoin. But until they do, take all news about Bitcoin, good and bad, with a healthy dose of skepticism and do your own research.
Interested in joining the conversation? Learn more about Bitcoin and other Cryptocurrencies by joining our free Slack Channel at http://bit.ly/TNCrypto!
About John Cannon
John is the Founder and CEO of Symply Health (www.SymplyHealth.com) a company that creates behavior change programs to help with Smoking Cessation, Healthy Eating, Stress Management, and the exercise game Agatha (www.GoAgatha.com). He can be reached at John@SymplyHealth.com.
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