Among the countless pieces of technical jargon and acronyms that the cryptocurrency community throws around, there\u2019s one important concept that\u2019s easy to understand even for the liberal-arts majors among us: FUD.<\/p>\n
That stands for \u201cFear, Uncertainty and Doubt\u201d and it\u2019s sort of a catch-all pejorative used to dismiss the seemingly never-ending list of concerns and criticisms that perpetually dog the digital-asset class even as it continues to grow at a breathtaking pace.<\/p>\n
It all started with Bitcoin\u2019s reputation as the currency of choice for drug traffickers, money launderers, tax cheats and malware ransomists. Upon that foundation, a skyscraper of FUD has been erected that now contains concerns about crypto\u2019s rapacious energy use and even its potential to spread contagion to the traditional financial system as the dollar value of tokenized assets grows into the trillions.<\/p>\n
Of course, potentially the biggest threat is the fear, uncertainty and doubt about what governments around the world will do about it all. As a result, China\u2019s decision to ban all crypto transactions and mining, coupled with intensifying scrutiny of blockchain assets by the Securities and Exchange Commission and other U.S. regulators, is creating a peak FUD moment for crypto.<\/p>\n
Yet, the remarkable thing is that — like the proverbial \u201cwall of worry\u201d that never seems to hurt the stock market — growing FUD never seems to do much damage to the value of crypto assets. At least, not for long. Yes, Bitcoin is down 5% following China\u2019s latest ban on all crypto transactions and vow to root out mining of digital assets, but that\u2019s just another day in the virtual office for this volatile asset class. Bitcoin and other coins actually were hit harder earlier this week when concerns over China Evergrande Group spread throughout all manner of global markets.<\/p>\n
\u201cIf the regulators look at something unfavorably, there\u2019s a contingent of crypto investors who say, \u2018That makes me like that more, not less,\u2019\u201d said Stephane Ouellette, CEO and co-founder of FRNT Financial Inc., a crypto-focused capital-markets platform. That\u2019s \u201cbecause of the anti-establishment mentality that crypto was born out of.\u201d<\/p>\n
There\u2019s also a bit of a Chicken Little element to the spread of FUD — so many past purported threats to the asset class never quite came to fruition.<\/p>\n
Last month, the FUD centered around the U.S. infrastructure bill in Congress that contained mandates on tax compliance for cryptocurrency brokerages. Yet it didn\u2019t do much to dent the bullish sentiment within the crypto-community, with Bitcoin, Ether and others continuing to rally. Newer coins like Cardano and Solana more than doubled. August volumes on Binance, the world\u2019s largest crypto exchange, jumped 65% in the month and open interest in Ethereum futures and perpetual futures jumped 41%, according to researcher CryptoCompare.<\/p>\n
A website called 99Bitcoins.com tracks what it considers to be \u201cBitcoin obituaries,\u201d or hot takes declaring the token to be worthless by writers and websites with significant audiences. Bitcoin has died 430 times, according to their tally.<\/p>\n
\u201cThe bad news isn\u2019t unexpected — it comes with all sorts of new technologies,\u201d said Zack Voell, director of research at Compass Mining. \u201cBut I expect it to dissipate and shed some of its regularity as crypto becomes increasingly more mainstream and more widely understood.\u201d<\/p>\n
For Sam Bankman-Fried, chief executive officer of exchange FTX, a lot of the FUD-filled headlines these days don\u2019t necessarily represent a more negative period for crypto. \u201cThere\u2019s just a lot more attention focused on it and particularly a lot more attention focused on trying to set apart the negatives in the industry,\u201d he said.<\/p>\n
When it comes to actions by governments, the consensus among the industry\u2019s players tends to be that regulations may change the way participants in the market conduct transactions — but any news of the asset class\u2019s demise is greatly exaggerated.<\/p>\n
As Brian Mosoff, CEO of Canadian crypto-investment firm Ether Capital Corp., put it: \u201cYou can\u2019t regulate at the protocol level, meaning you can\u2019t change the code of Bitcoin.\u201d<\/p>\n
\u201cI don\u2019t think it matters that much what regulators do,\u201d he said during an interview on Bloomberg\u2019s \u201cWhat Goes Up\u201d podcast. \u201cIt\u2019ll change how people interact with these assets and how they interact from specific jurisdictions. But I don\u2019t think the assets themselves are going to just disappear overnight,\u201d he added. \u201cWhat\u2019s going to get regulated here are the access points and the marketplaces.\u201d<\/p>\n
Still, to Art Hogan, chief strategist at National Securities, there could be a \u201cwhistling past the graveyard\u201d mentality in place as crypto investors ignore what may end up being a major sea change when it comes to regulatory scrutiny.<\/p>\n
\u201cIt just hasn\u2019t settled in yet,\u201d he said. \u201cBut that likely changes pretty abruptly. And cryptocurrencies tend to have abrupt moves. They\u2019re never calm, they\u2019re never steady. It\u2019s either a volatile move higher — and oftentimes followed by volatile moves lower.\u201d<\/p>\n
One thing that\u2019s for sure is that the stakes are growing higher, as more and more big-money investors from traditional markets — like hedge-fund billionaire Steve Cohen — get converted into crypto true believers.<\/p>\n
Another luminary of the hedge fund world, Ray Dalio of Bridgewater Associates, weighed in on Bitcoin this week on Bloomberg TV, calling it a \u201ctremendous accomplishment\u201d from a technology perspective. Of course, even that praise was dripping with FUD.<\/p>\n
If \u201csuccessful, there\u2019s the risk the government will outlaw it,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
Among the countless pieces of technical jargon and acronyms that the cryptocurrency community throws around, there\u2019s one important concept that\u2019s easy to understand even for the liberal-arts majors among us: FUD. That stands for \u201cFear, Uncertainty and Doubt\u201d and it\u2019s sort of a catch-all pejorative used to dismiss the seemingly never-ending list of concerns and<\/p>\n","protected":false},"author":341034,"featured_media":401487,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[44696],"tags":[187],"class_list":["post-415780","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-bitcoin"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/415780"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=415780"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/415780\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/401487"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=415780"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=415780"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=415780"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}