What is Causing Mainstream Media FUD? ๐จ This article is 7 years old...
What is Causing Mainstream Media FUD?
3 min read
Updated: Feb. 16, 2018 at 8:28 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
FUD – Fear, Uncertainty and Doubt. As many in the crypto world know, these feelings are all too common. Rumors of scams (think BitConnect and Onecoin), governments banning cryptocurrencies and temporary slumps in the market all put the absolute FUD in us. But just how much of a role does mainstream media play in all of this?
Cryptocurrencies are a hot topic right now — breaking into the mainstream and away from their tech origins. However this new found popularity has a price — with public media sites running hype pieces (both good and bad) a common story being governments putting bans and sanctions in place; in an effort to control cryptocurrency.
“The South Korea government plans to make policies surrounding cryptocurrency – Widespread panic ensues.”
In January 2018, there were widespread reports of the South Korean government’s plans to ban cryptocurrency. South Korea is home to some of the largest Crypto exchanges including Bithumb and Korbit — two giants in the East Asian market .
So it is no surprise that headlines likeย South Korea Wants To Ban Crypto Trade, While Government Officials And Big Banks Make Millionsย (released by Forbes) that many users start to question their investments in these markets.
Indeed, after the news was announced the local price ofย Bitcoin dropped by 21%. Reuters, an international news agency published this 6 minute read, that includes news of raids on top exchanges, crypto investors selling all of their Bitcoin, and the fallout on both local and global exchanges. Although the article tends to err on the dramatic side, it raises valid points surrounding the issue and government statements released, such as:
In a recent news conference Justice Minister, Park Sang-ki said
โThere are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,โ
However, the government assures people they are NOT banning cryptocurrencies in South Korea
Following the initial backlash that surrounded the news, the government has said that it will not be banning crypto trading. The policies will be in regards to making trading more transparent as opposed to outlawing it altogether.
Hong Nam-Ki, minister of the Office for Government Policy Coordination said: “Policy makers will continue monitoring the global discussion around cryptocurrencies and that an exchange ban is still a possibility, even though it isnโt currently a focus of the government.”
Clickbait headlines are part of the problem
The latest dose of FUD seems to be emerging from India; with it’s Finance Minister Arun Jaitley quoting:
“Cryptocurrencies in its current form will not be a legal tender and Indian government intends on cracking down on illicit activities using cryptocurrency [sic]. “
Which of course led to headlines such as “Bitcoin Ban in India could destroy Bitcoin!” causing the Finance minister having to race aย rumour mill in full overdrive, only to explain that there was no ban on cryptocurrencies rather the government was preparing precautionary measures.
For more informationย The Droid Guy has an excellent list of FUD clickbait headlines surrounding this incident.
How does FUD affect the market?
Although much of the news that is circulated in regards to the crypto world are over exaggerated and falsely spread, not all users are deep into the world. Many people who are investing nowadays are is average, every day user, a.k.a. retail investor.
People who have seen the hype in the media, the bitcoin billionaires and they want to be involved. Also there are cases when it is not over exaggeration but well placed warnings about scam companies and Ponzi schemes.
Unfortunately, when people see headlines such as the ones above, it can lead to people selling all of their cryptocurrencies in a short amount of time. Resulting in the market price dropping and long term enthusiasts screaming “HODL” (hold on for dear life) and plenty of smug comments on the crypto forums of Reddit.
In the past year we watched Bitcoin start at $900 rise to a staggering $20,000 all whilst experiencing FUD every time it dropped. At the time of writing this it is currently sitting at $10,273.20. The mainstream media are having a field day with the crypto industry and as governments continue to look for ways to regulate this area, I am sure the media will continue to report FUD inducing news
It will be interesting to see the policies and regulations that are introduced in 2018. A little advice to the newcomers out there: Read the whole article, a lot of the headlines are click-bait, and do your own research; reddit and twitter are a goldmine of information (although sometimes conflicting).
