What is FUD: How to Use It to Your Advantage While Investing in Crypto?
In this section, we’re going to talk about what is FUD in investing, and how to profit from it!
Ironically, the word “FUD” causes FUD for those who don’t know what this abbreviation stands for, which is “Fear, Uncertainty and Doubt”. But, there’s no need to fear FUD. You can even profit from it, and there are many who do exactly that.
Emotions play a critical role in everything. Therefore, it’s not a surprise that markets, especially ones that are as versatile as crypto, are directly affected by the predominant sentiments. But, once you become aware of how it influences people’s financial decisions, you learn how to read between the lines, and how to avoid being blinded by irrational fear.
In this section, I’m going to talk about what is FUD in crypto investing - specifically, how it affects people’s investment strategies and the cryptocurrency market, and how not to give into it. I’ll share particular examples about how FUD had led people into financial losses, and the exact opposite - how smart investors sensed the market sentiment, and ended up counting financial gains while everyone else thought that the ship was sinking.
Fear no more, and let’s dive into it!
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What is FUD in Crypto? (Fear, Uncertainty & Doubt Explained)
What is FUD?
As I’ve told you in the introductory part, FUD stands for Fear, Uncertainty, and Doubt. These three unpleasant emotions play a huge part in crypto, as well as the broader financial markets, in general. They affect how people act, what they buy, what they sell, where and how much they invest. When these emotions prevail, it affects the entire industry, and numbers on charts turn red.
These sentiments arise and grip the market for various reasons, and on different occasions. Sometimes, FUD spreads uncontrollably for objective reasons, such as huge companies going bankrupt, or political bodies implementing policies that may potentially be detrimental to particular investments.
A great example of this could be found in the year 2021. It was the time when the word began spreading that the Chinese government was about to implement a total ban on crypto. China was very active in terms of crypto mining operations; therefore people feared that a sudden shock like this could give a massive blow to the industry. Which, of course, would affect crypto prices, and cause financial losses for most traders.
Naturally, this news caused a wave of FUD in the crypto world, as investors and traders became concerned about saving their money. As time later revealed, the fears were justified, as China really did implement the crypto ban, and the effects on the market were felt by everyone.
This was an example of FUD caused by unsettling rumors that eventually turned out to be true. But it’s not always the case. In reality, usually, it’s quite the opposite.
Sometimes false rumors begin making rounds on social media, and if no respected figure steps in to deny them in time, the waves of FUD can cause real damage. And in cases like this, the damage comes from the fact that unverified information affected traders’ emotions, and they all gave in to fear, uncertainty and doubt.
Here’s an example. Several months before the rumors about China’s ban, in May 2021, the word began spreading that the US Treasury was planning to strictly intensify crypto regulation.
FUD quickly spread, and led to a significant drop in the prices of such cryptocurrencies as Bitcoin and Ethereum. As the prices began falling, people began panicking. In order to save their investments, many traders rushed to sell their crypto assets, which, in turn, only further accelerated the spread of the unpleasant sentiment and the decline in crypto prices. Even though all of this was caused by a false rumor, it created a vicious circle, and a snowball effect.
So, that’s an example of how false news and fake information can cause FUD. As you can already tell, when it comes to FUD, a savvy investor must always remain sharp and vigilant in order not to fall prey to rumors taken out of thin air.
There are a lot of similarities between how rumors function in the crypto market, and in real life. Sometimes they turn out to be true, sometimes, they get debunked as pure nonsense. But, there’s one more element that needs to be considered when talking about what is FUD in crypto investing. Just like gossip, FUD is often created by people who have particular goals in their minds. And these goals can get pretty sinister.
Market manipulators or competitors of a particular cryptocurrency, or a crypto-related company, love FUD. If the rumor doesn’t get debunked fast enough, the coin, or a company that's surrounded by artificially-caused clouds of FUD can get damaged.
As mentioned before, FUD causes panic-selling, as traders try not to lose their investments. So, if the FUD is targeted at a particular coin, it can lead to a significant drop in its price. If the FUD doesn’t get dispersed quick enough, it can lead to a loss of confidence in the coin, the company, or even the entire industry, as people begin to literally feel fearful, uncertain and doubtful about continuing to invest their money into it.
But then again, where there are losers, there are also winners. Market manipulators understand this very well, and every time they notice an irrational behavior becoming more and more prevalent in the market, they begin sensing new opportunities.
If the rumor is false, it will eventually get debunked, the FUD cycle will come to an end. But until then, the artificially created FUD does its job for them.
If people began abandoning a certain coin, it would lead to its decrease in value. This opens up opportunities for market manipulators to rush in, buy this coin at a lower value, and then, once it gets back on its feet, sell it at a higher price than they bought it for.
Here’s a more prominent example of how one man got accused of market manipulation. In May 2021, Elon Musk tweeted that Tesla would no longer accept Bitcoin as payment for its products. Of course, this caused a lot of panic among investors, which resulted in the price of Bitcoin falling by over 10% in less than a day.
For doing so, he got accused of market manipulation. Of course, he knew that a tweet like this would result in Bitcoin’s price taking a hit. And you can be sure that there were traders who saw this tweet as an opportunity to buy Bitcoin with a discount, as they were sure that many people would begin panic-selling their crypto holdings.
How to See Through FUD?
Up until this point, I’ve explained that FUD may be caused by:
- Information that eventually turns out to be true;
- Rumors that are not true;
- Rumors that are purposefully spread in order to cause panic and chaos in the market, so that market manipulators could profit from everyone’s losses.
It’s obvious that this market is very much affected by emotions, especially negative ones. One of the main reasons for that is the fact that social media plays a very important role in the crypto industry.
As new coins, technologies, updates, and opinions are minted on a daily basis, people need to stay in touch with all the latest developments within the industry, in order not to miss out or sleep on new investment opportunities.
But, as always, it’s a double-edged sword. Overly-intense reliance on social media gets weaponized by those who profit from FUD. Social media enables rumors and negative information to spread quickly. Therefore, in order to stay sane and safe in the crypto sphere, it is of utmost importance to always remain critical, and avoid blindly jumping on hype, fear, or other emotion-based bandwagons.
Thankfully, there are helpful tools that can help traders check the emotional climate in the market. The most famous one is called the “Crypto Fear & Greed Index.”
By analyzing and measuring the prevailing emotions in the market, this index expresses how does the market feel at a given day on a scale from 0 to 100.
0 represents “Extreme fear”, while the highest number - 100 - represents “Extreme greed.”
Logically, when FUD is all over the place, the index turns red, and the number will get lower. So, when someone begins panicking a bit too much, they can take a look at this index, and get a reality check about how severe the situation truly is. The index serves a simple purpose, and its to help people deal with their emotions and not to overreact.
If you want to take a look at how does the market feel like today, you can see it at Bitdegree.org, where you’ll find a daily-updated crypto fear & greed index.
Nevertheless, life would be too easy if a simple index could help people avoid losses, or lead directly to gains. Sometimes, colossal changes happen super fast, and relying simply on indexes like this one could be very risky to your financial well-being.
There’s something else that experienced traders would recommend to anyone who’s worried about being affected by FUD too much. It’s called diversifying your portfolio. It’s a simple investment strategy that improves your resilience when the FUD clouds begin rising.
If the market sentiment turns negative, and it affects a particular coin, traders better hope that this wasn’t the coin that they put all their savings into. It’s a crypto version of the old, wise saying that tells us “not to put all the eggs into a single basket.” If one coin gets affected by FUD, other coins may be able to avoid it. Having a diversified portfolio is the best way of ensuring that a single rumor won’t take down someone’s entire financial well-being.
And finally, anyone who enters crypto has to realize that many projects, especially the real, promising ones, are here for the long term. After conducting their own, personal due diligence procedures, traders must evaluate that truly potential projects will survive FUD caused by false, or easily-deniable rumors.
In cases like this, once again, FUD creates new investment opportunities. When negative news causes a particular crypto coin’s price to drop, this may turn out to be a great opportunity to “buy the dip”. This expression translates to buying the coin at a lower price, and potentially profiting from it when the asset makes a comeback.
And in addition to that, many FUD occurrences could be defined as short-lived. The crypto space, be it the market itself, or the crypto social media bubbles, are hyper volatile. New discussions, accusations, ideas, and conflicts occur every minute. New rumors are being created every day, and most of them get forgotten very quickly.
Therefore, calm and patient traders recognize attempts at causing FUD, and don’t let themselves be bothered by these efforts at catching your attention.
Wrapping Up
In this section, I’ve covered what is FUD in investing, from a crypto perspective, in what forms it appears, and how it can affect the crypto market. Quite naturally, recognizing FUD and being able to not let it get into your head is a must for every trader who wishes to see success in their trading ventures.
Understanding what causes FUD, and that it can be an artificially created chaos that market manipulators could take advantage of, provides traders with a new perspective, and a new skill of being more suspicious & less susceptible to emotions and irrational behavior. And that’s definitely something that a trader should seek to obtain.
I hope that from now on, you’ll recognize FUD, and the fear of asking the question “what is FUD?” won’t bother you anymore.
If you’re reading this section, chances are that you know a thing or two about <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//how-to-invest-in-crypto/">how to start investing in crypto<\/strong><\/a>, or it’s at least a topic that interests you, and you’re beginning to look into it. Whatever the case might be, one thing’s for sure - as the crypto market evolves, there are more and more people who are developing an interest in investing in crypto.<\/p>\n<p><em>That’s awesome!<\/em> However, I probably don’t need to tell you that it’s something that comes with some specific risks, as well - it’s not all just sunshine and rainbows, mind you! Before you start investing your hard-earned money into crypto, <strong>it’s crucial to understand risk management<\/strong>.<\/p>\n<p>In this section, we’re going to talk about what are the risks of investing in cryptocurrency. To start off, we’ll discuss those risks, to begin with, and after that, we’ll talk about how you can both manage and avoid them, as well as improve your investing strategies, in general!<\/p>\n<p><em>Let’s get to it!<\/em><\/p>\n<h2>What are the Risks Associated With Investing in Crypto?<\/h2>\n<p>Now, then - to begin, I’ll assume that you’re already quite savvy when it comes to the <em>“standard”<\/em> crypto concepts, such as <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-a-crypto-wallet/">crypto wallets<\/a><\/strong>, <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//how-do-cryptocurrency-exchanges-work/">exchange platforms<\/a><\/strong>, <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//blockchain-transaction/">how cryptocurrency transactions work<\/a><\/strong>, and so on.<\/p>\n<p><em>If that’s not the case, before moving further, check out the previous sections in this Crypto 101 Handbook - there are sections dedicated to all of these topics!<\/em><\/p>\n<p>So, the very first big question is rather self-evident - <strong>what are the risks associated with investing in crypto?<\/strong> Well, believe it or not, there are actually quite a few, really! The thing that makes this topic complicated, and void of a single, straightforward answer is that “crypto” is a rather broad term - <em>do you want to invest in specific cryptocurrencies? Maybe you’re looking to buy <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-non-fungible-token-nft/">NFTs? Or, you’re interested in using a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-are-decentralized-applications-dapps/">dApp?<\/em><\/p>\n If you’re reading this section, chances are that you know a thing or two about <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//how-to-invest-in-crypto/">how to start investing in crypto<\/strong><\/a>, or it’s at least a topic that interests you, and you’re beginning to look into it. Whatever the case might be, one thing’s for sure - as the crypto market evolves, there are more and more people who are developing an interest in investing in crypto.<\/p>\n<p><em>That’s awesome!<\/em> However, I probably don’t need to tell you that it’s something that comes with some specific risks, as well - it’s not all just sunshine and rainbows, mind you! Before you start investing your hard-earned money into crypto, <strong>it’s crucial to understand risk management<\/strong>.<\/p>\n<p>In this section, we’re going to talk about what are the risks of investing in cryptocurrency. To start off, we’ll discuss those risks, to begin with, and after that, we’ll talk about how you can both manage and avoid them, as well as improve your investing strategies, in general!<\/p>\n<p><em>Let’s get to it!<\/em><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"How to Avoid Major Crypto Investment Risks? (Beginner-Friendly)\"\n title=\"How to Avoid Major Crypto Investment Risks? 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The thing that makes this topic complicated, and void of a single, straightforward answer is that “crypto” is a rather broad term - <em>do you want to invest in specific cryptocurrencies? Maybe you’re looking to buy <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-non-fungible-token-nft/">NFTs? Or, you’re interested in using a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-are-decentralized-applications-dapps/">dApp?<\/em><\/p>\n![\"Investing](https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//investing-in-cryptocurrency-01.jpg/" "\\"Investing")
rug pull<\/a> in the making<\/strong>.<\/p>\n<p>This is something that is especially relevant during a <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-bull-market/">bull market<\/a><\/strong> - a period of time when the whole industry is experiencing huge growth, and many people are throwing their money into any and all projects that they come across. Bull runs are when a lot of malicious players come into the market, create scam projects, hype them up, and then run away with the investors’ money, at some point.<\/p>\n<p>Moving on, when discussing the most common mistakes that crypto investors make, it’s crucial to mention the platform (or, exchange) that you’ll be using. Put simply, while most of the focus usually lies on diversifying your portfolio and screening out any potential scams, it shouldn’t be forgotten that <strong>picking a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//best-cryptocurrency-exchange/">reliable and trustworthy investing platform<\/a> is definitely part of the deal, too<\/strong>!<\/p>\n<p>In order to see just how important this is, all that you need to do is take a good look at the news cycle in the crypto space - it seems that, every other day or so, there’s a new breach in some platform’s security, or a new bankruptcy on the horizon. This has especially been exacerbated after the whole <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//news//sam-bankman-frieds-ftx-files-for-chapter-11-bankruptcy/">FTX exchange debacle<\/strong><\/a>.<\/p>\n<h2>Dealing With Cryptocurrency Investing Risks<\/h2>\n<p>So - those are some of the more common risks associated with investing in crypto. Of course, as I’ve mentioned earlier, <strong>there are many more potential risks out there<\/strong> - however, if you learn to deal with and manage the <em>“main”<\/em>, big risks, this should improve your investing journey, significantly!<\/p>\n<p>Speaking of which, as promised, I won’t leave you in the dark - now that you know what are the risks of investing in cryptocurrency, let’s discuss how to deal with these risks. <strong>Note that none of this is going to be financial advice<\/strong> - just some tips that I’ve gathered throughout the years. Make sure to always consult with a qualified professional before any and all investing-related ventures!<\/p>\n<p>Now, first and foremost, <strong>when it comes to “not investing more than you’re willing to lose”<\/strong>, the solution is simple - assuming that you have a stable monthly income, you should create a set budget every single month, of just how much you can put into your crypto investment portfolio, without it impacting your life.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Investing in cryptocurrency: \" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//investing-in-cryptocurrency-03.jpg/" alt=\"Investing in cryptocurrency: \" width=\"1000\" height=\"578\" \/><\/p>\n<p>A good way to look at it is by thinking - <em>what if this amount of money simply disappears?<\/em> <em>Will it impact me in any way? Will it hinder my quality of life? <\/em>If the answer is “yes”, you’re probably overinvested.<\/p>\n<p><strong>The question of portfolio diversification<\/strong> is closely related to this topic, as well. Most experts will tell you that it’s never a good idea to invest into a single asset, whether it’s a cryptocurrency, a stock, or anything else. Instead, it’s important to do some in-depth research, find a few different projects that have potential, and diversify your investment among them.<\/p>\n<p>Truthfully, investing in different asset classes is often an even better idea - however, this is something that falls far beyond the scope of this section.<\/p>\n<p>Moving on, we have the difficult question - <strong>how to avoid crypto scams, and choose a reliable project to invest in?<\/strong> Well, as you can probably guess, there’s only one answer - research, research, and more research. If you’re going to learn how to start investing in cryptocurrency, you’re going to be doing A LOT of that.<\/p>\n<p><em>I’m not kidding, mind you!<\/em> There really is no way around it - whether it’s the middle of a bull run, or a deep Crypto Winter, before committing any of your money towards some sort of a project, <strong>you need to perform an extensive amount of research<\/strong>.<\/p>\n<p>If you’re not sure where to start, I've written a <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//how-to-avoid-rug-pulls-in-crypto/">section about rug pulls<\/a><\/strong> (how to spot and avoid them), how to do research, and how to vet different projects and project types. Check it out - <em>perhaps that’s exactly what you need to kickstart your crypto investment journey?<\/em><\/p>\n<p>Outlining a few of the bigger aspects here, you should <strong>always perform a background check<\/strong> on the founders and the team behind a project, read through the whitepaper and roadmap, check out the community, and look into whether the project has any notable names standing behind it, in the form of venture capital investments.<\/p>\n<p>If all of these aspects are in-check, it’s a good green flag to start off with - you can then look into some of the more detailed aspects concerning the project.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Investing in cryptocurrency: The investment platform of choice.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//investing-in-cryptocurrency-04.jpg/" alt=\"Investing in cryptocurrency: The investment platform of choice.\" width=\"1000\" height=\"558\" \/><\/p>\n<p>Last but not least, <strong>the investment platform of choice<\/strong>. Obviously, nowadays, there are countless numbers of different crypto exchanges and brokerage platforms out there, all offering their clients a wide array of benefits and features. This makes it very easy to get lost and confused, and end up picking a platform with a <em>less-than-stellar<\/em> reputation.<\/p>\n<p>In order to avoid this confusion, you should <strong>spend just as much time vetting out your exchange of choice<\/strong>, as you’ve spent researching the cryptocurrencies that you’ve decided to invest in. Check the reputation of the platform, its security measures, history of break-ins, whether or not it has some sort of insurance on deposited assets, as well as the fees that it will charge you.<\/p>\n<p>Different additional features are cool and all, but security and fees should always be at the forefront of your research. If any of these two aspects are lacking, you could end up losing all of your assets, or paying a huge amount of money every single time that you perform a trade or crypto acquisition on the exchange.<\/p>\n<h2>Wrapping Up<\/h2>\n<p>So, then - those were some of the most common risks associated with investing in cryptocurrencies, as well as my personal tips on how to deal with each one of them. One thing that I do want to add is that <strong>these risks (as well as tips) are going to be applicable to most types of crypto investments that you might think of<\/strong> - whether it be crypto <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//coin-vs-token/">coins & tokens<\/a><\/strong>, <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-nfts/">NFTs, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-dapps-in-crypto/">dApps, or anything in between.<\/p>\n<p>To sum all of it up, let me just reiterate - the best ways to manage your cryptocurrency investing risks is to set an investment budget, as well as do as much research as you possibly can. Obviously, consulting a licensed financial advisor should be a priority, as well.<\/p>\n<p> <\/p>","definition":"Did you know that one of the best ways of avoiding most crypto investment risks is setting an investment budget and doing extensive research before making any decisions?","status":"published","meta_title":"How to Manage Your Risks When Investing in Cryptocurrency?","meta_description":"Are you thinking about investing in cryptocurrency? Before doing that, read this to find out what you should know about investing in crypto.","meta_keywords":"investing in cryptocurrency, what to know about cryptocurrency investing, how to start investing in cryptocurrency, how to make money investing in cryptocurrency, what are the risks of investing in cryptocurrency","modified_content":"<p>In this section, I’m going to tell you <strong>how to manage your risks<\/strong> while investing in <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//tutorials//what-is-cryptocurrency/">cryptocurrency!/nrug pull<\/a> in the making<\/strong>.<\/p>\n<p>This is something that is especially relevant during a <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-bull-market/">bull market<\/a><\/strong> - a period of time when the whole industry is experiencing huge growth, and many people are throwing their money into any and all projects that they come across. Bull runs are when a lot of malicious players come into the market, create scam projects, hype them up, and then run away with the investors’ money, at some point.<\/p>\n<p>Moving on, when discussing the most common mistakes that crypto investors make, it’s crucial to mention the platform (or, exchange) that you’ll be using. Put simply, while most of the focus usually lies on diversifying your portfolio and screening out any potential scams, it shouldn’t be forgotten that <strong>picking a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//best-cryptocurrency-exchange/">reliable and trustworthy investing platform<\/a> is definitely part of the deal, too<\/strong>!<\/p>\n<p>In order to see just how important this is, all that you need to do is take a good look at the news cycle in the crypto space - it seems that, every other day or so, there’s a new breach in some platform’s security, or a new bankruptcy on the horizon. This has especially been exacerbated after the whole <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//news//sam-bankman-frieds-ftx-files-for-chapter-11-bankruptcy/">FTX exchange debacle<\/strong><\/a>.<\/p>\n<h2>Dealing With Cryptocurrency Investing Risks<\/h2>\n<p>So - those are some of the more common risks associated with investing in crypto. Of course, as I’ve mentioned earlier, <strong>there are many more potential risks out there<\/strong> - however, if you learn to deal with and manage the <em>“main”<\/em>, big risks, this should improve your investing journey, significantly!<\/p>\n<p>Speaking of which, as promised, I won’t leave you in the dark - now that you know what are the risks of investing in cryptocurrency, let’s discuss how to deal with these risks. <strong>Note that none of this is going to be financial advice<\/strong> - just some tips that I’ve gathered throughout the years. Make sure to always consult with a qualified professional before any and all investing-related ventures!<\/p>\n<p>Now, first and foremost, <strong>when it comes to “not investing more than you’re willing to lose”<\/strong>, the solution is simple - assuming that you have a stable monthly income, you should create a set budget every single month, of just how much you can put into your crypto investment portfolio, without it impacting your life.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Investing in cryptocurrency: \" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//investing-in-cryptocurrency-03.jpg/" alt=\"Investing in cryptocurrency: \" width=\"1000\" height=\"578\" \/><\/p>\n<p>A good way to look at it is by thinking - <em>what if this amount of money simply disappears?<\/em> <em>Will it impact me in any way? Will it hinder my quality of life? <\/em>If the answer is “yes”, you’re probably overinvested.<\/p>\n<p><strong>The question of portfolio diversification<\/strong> is closely related to this topic, as well. Most experts will tell you that it’s never a good idea to invest into a single asset, whether it’s a cryptocurrency, a stock, or anything else. Instead, it’s important to do some in-depth research, find a few different projects that have potential, and diversify your investment among them.<\/p>\n<p>Truthfully, investing in different asset classes is often an even better idea - however, this is something that falls far beyond the scope of this section.<\/p>\n<p>Moving on, we have the difficult question - <strong>how to avoid crypto scams, and choose a reliable project to invest in?<\/strong> Well, as you can probably guess, there’s only one answer - research, research, and more research. If you’re going to learn how to start investing in cryptocurrency, you’re going to be doing A LOT of that.<\/p>\n<p><em>I’m not kidding, mind you!<\/em> There really is no way around it - whether it’s the middle of a bull run, or a deep Crypto Winter, before committing any of your money towards some sort of a project, <strong>you need to perform an extensive amount of research<\/strong>.<\/p>\n<p>If you’re not sure where to start, I've written a <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//how-to-avoid-rug-pulls-in-crypto/">section about rug pulls<\/a><\/strong> (how to spot and avoid them), how to do research, and how to vet different projects and project types. Check it out - <em>perhaps that’s exactly what you need to kickstart your crypto investment journey?<\/em><\/p>\n<p>Outlining a few of the bigger aspects here, you should <strong>always perform a background check<\/strong> on the founders and the team behind a project, read through the whitepaper and roadmap, check out the community, and look into whether the project has any notable names standing behind it, in the form of venture capital investments.<\/p>\n<p>If all of these aspects are in-check, it’s a good green flag to start off with - you can then look into some of the more detailed aspects concerning the project.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Investing in cryptocurrency: The investment platform of choice.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//investing-in-cryptocurrency-04.jpg/" alt=\"Investing in cryptocurrency: The investment platform of choice.\" width=\"1000\" height=\"558\" \/><\/p>\n<p>Last but not least, <strong>the investment platform of choice<\/strong>. Obviously, nowadays, there are countless numbers of different crypto exchanges and brokerage platforms out there, all offering their clients a wide array of benefits and features. This makes it very easy to get lost and confused, and end up picking a platform with a <em>less-than-stellar<\/em> reputation.<\/p>\n<p>In order to avoid this confusion, you should <strong>spend just as much time vetting out your exchange of choice<\/strong>, as you’ve spent researching the cryptocurrencies that you’ve decided to invest in. Check the reputation of the platform, its security measures, history of break-ins, whether or not it has some sort of insurance on deposited assets, as well as the fees that it will charge you.<\/p>\n<p>Different additional features are cool and all, but security and fees should always be at the forefront of your research. If any of these two aspects are lacking, you could end up losing all of your assets, or paying a huge amount of money every single time that you perform a trade or crypto acquisition on the exchange.<\/p>\n<h2>Wrapping Up<\/h2>\n<p>So, then - those were some of the most common risks associated with investing in cryptocurrencies, as well as my personal tips on how to deal with each one of them. One thing that I do want to add is that <strong>these risks (as well as tips) are going to be applicable to most types of crypto investments that you might think of<\/strong> - whether it be crypto <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//coin-vs-token/">coins & tokens<\/a><\/strong>, <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-nfts/">NFTs, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-dapps-in-crypto/">dApps, or anything in between.<\/p>\n<p>To sum all of it up, let me just reiterate - the best ways to manage your cryptocurrency investing risks is to set an investment budget, as well as do as much research as you possibly can. Obviously, consulting a licensed financial advisor should be a priority, as well.<\/p>\n<p> <\/p>","youtube_video":{"id":68,"channel_id":1,"sort":34,"video_title":"How to Avoid Major Crypto Investment Risks? (Beginner-Friendly)","description":"How to manage your risks when learning to invest in cryptocurrency?\n\nInvesting in crypto can be a very exciting concept - that\u2019s undeniable! However, as with any other investment, the process comes with its own risks, as well. Risks that should be addressed before you actually start investing.\n\nIn this video, you will have the opportunity to learn about the biggest risks associated with investing in cryptocurrency, whether it be coins & tokens, NFTs, or else. I will also tell you about how to manage and deal with these risks, to improve your investing experience even further!\n\nDo you have any tips on dealing with crypto investment risks? Make sure to share them with everybody, in the comment section below!\n\nVideo Time Table:\n\n0:00 Introduction to How to Avoid Crypto Investing Risks\n1:03 Risks Associated With Investing in Crypto\n4:06 Dealing With Crypto Investing Risks\n5:47 How to Avoid Crypto Scams?\n7:48 Wrap-up: How to Avoid Crypto Investing Risks?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained\n\n#CryptoInvesting #CryptoScam #RiskManagement","video_id":"fQfMIv1Ppww","duration":521,"view_count":139,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/how-to-avoid-major-crypto-investment-risks-beginner-friendly.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-05-24T14:14:52.000000Z","created_at":"2023-05-24T23:00:11.000000Z","updated_at":"2024-01-09T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}}"
:prev-section="{"id":610,"chapter_id":7,"order":7,"featured_image_id":null,"youtube_video_id":null,"author_id":4,"created_at":"2023-06-30T06:19:18.000000Z","updated_at":"2023-12-28T22:55:06.000000Z","slug":"what-is-a-perpetual-contract","title":"Perpetual Contracts: Futures Contracts Without an Expiration Date","content":"<p><span style=\"font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen, Ubuntu, Cantarell, 'Open Sans', 'Helvetica Neue', sans-serif;\">In this section, I’m going to explain <strong>what is a perpetual contract in crypto<\/strong>!<\/span><\/p>\n<p>Cryptocurrency trading is increasingly becoming a more and more popular activity. It makes sense, then, that there are new tools and services popping up, aimed at advancing this activity even further, as well as offering traders a variety of choices.<\/p>\n<p>While <strong>perpetual contracts in crypto aren’t anything new<\/strong>, <em>per se<\/em>, they are definitely still a mystery to many. These trading tools are usually considered to be really advanced, and targeted at only the most experienced of traders. This, in turn, makes them out to be shrouded in mystery. Well, today, I’ll uncover this mystery, and tell you all about what is perpetual contract trading!<\/p>\n<p>In this section, we’ll talk about perpetual contracts. To be a bit more specific, I’ll tell you about what these contracts are, how do they work, what type of traders they are going to suit best, as well as look into <a href=https://www.bitdegree.org/"//crypto//goon//bydfi/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>BYDFi<\/strong><\/a> - a specific exchange platform that specializes in perpetual contracts.<\/p>\n<p><em>Let’s get right into it!<\/em><\/p>\n<h2>What are Perpetual Contracts, and How Do They Work?<\/h2>\n<p>As per usual, we’ll start off by getting the dry definitions out of the way, first. However, I do have to give a disclaimer here - <strong>while our goal is to demystify perpetual futures contracts, this topic still requires that you have at least a fundamental understanding of how the crypto market works, and what is cryptocurrency trading, in general<\/strong>.<\/p>\n<p>If you feel like your knowledge could use a refresher, don’t sweat - there are dedicated sections in this <strong>Crypto 101 Handbook<\/strong> that cover these topics! Make sure to check them out, before diving into this section - it’ll make things much easier!<\/p>\n<p>Alright, with that out of the way, let’s tackle the big question - <em>what is a perpetual contract in crypto?<\/em><\/p>\n<p><em><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is a perpetual contract: Crypto futures contracts.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-a-perpetual-contract-01.jpg/" alt=\"What is a perpetual contract: Crypto futures contracts.\" width=\"1000\" height=\"578\"><\/em><\/p>\n<p>Well, as far as the definition is concerned, most reputable resources will tell you that perpetual contracts are “<strong>crypto futures contracts that don’t have an expiry date<\/strong>”. <em>That doesn’t really help, now does it?<\/em><\/p>\n<p><em>Let’s break it down.<\/em><\/p>\n<p>Often referred to simply as “<strong>crypto perps<\/strong>”, perpetual contracts are, first and foremost, <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-derivative/">derivatives. As the term might suggest, a derivative is something that <strong>derives its value from an underlying asset<\/strong> - in this case, a cryptocurrency. So, in short, when you deal with perpetual contracts, you don’t actually buy or sell crypto assets - instead, you’re dealing with contracts that have their values tied to those cryptos.<\/p>\n<p>That’s one part of what constitutes perpetual contracts in crypto. Another huge point that you need to consider is that perpetual contracts are a <strong>special type of “<a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-are-futures/">futures” contract<\/strong>. Once again, the term itself is a giveaway - futures contracts employ two parties (a buyer and a seller) to exchange a crypto asset of their choice sometime in the future, for a predetermined price.<\/p>\n<p>The thing that makes perpetual futures contracts interesting, and different from simple futures contracts, is the fact that, with crypto perps, the trading usually (<em>but not necessarily!<\/em>) happens <strong>close to the underlying price of an asset, and you can actually hold your position indefinitely<\/strong> - in other words, it doesn’t expire.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is a perpetual contract: Perpetual contracts don't expire.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-a-perpetual-contract-02.jpg/" alt=\"What is a perpetual contract: Perpetual contracts don't expire.\" width=\"1000\" height=\"556\"><\/p>\n<p>Now, that’s a lot of seemingly-fancy terms that I’ve just thrown at you. Let’s put it all into place - <strong>here’s a down-to-earth example<\/strong>.<\/p>\n<p>Imagine that, right now, <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoin costs $10,000. Judging by all of the different <a href=https://www.bitdegree.org/"//crypto//news/">news stories<\/strong><\/a> coming out within the market, you sense that people are getting more and more bullish, and that the price might start rising really soon.<\/p>\n<p>Since you’re a clever trader, you decide to jump on this opportunity, and utilize perpetual futures contracts to potentially make some profits.<\/p>\n<p>So, you navigate to a reliable crypto exchange that has perpetual contract functionality (such as <a href=https://www.bitdegree.org/"//crypto//goon//bydfi/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>BYDFi<\/strong><\/a>), and set up your order. Since you believe that the price of BTC will rise to at least $15,000 in the next month, your order would sound a little something like this:<\/p>\n<p><strong>“Buy 1 BTC for $10,000 in one month”.<\/strong><\/p>\n<p><em>Of course, you don’t need to buy an entire Bitcoin, or any other cryptocurrency - this is just to keep the example as straightforward as possible.<\/em><\/p>\n<p>So, in a month’s time, if BTC reaches $15,000, you’ll be able to acquire it for $10,000, which will give you a profit of $5000. As you’re learning about what is a perpetual contract in crypto, you will soon stumble across another really cool feature of perps - the fact that<strong> you don’t actually need to wait for an entire month to close your position<\/strong>.<\/p>\n<p>So, for example, if you see that, during the month, the price of Bitcoin keeps on fluctuating, and you’re less positive that it’ll actually reach $15,000 at your specified point in time, you could close your position whenever you deem fit, whether it be in a week, 15 days, or else. There’s a lot of flexibility involved, which is definitely much appreciated!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is a perpetual contract: Longing and shorting.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-a-perpetual-contract-03.jpg/" alt=\"What is a perpetual contract: Longing and shorting.\" width=\"1000\" height=\"575\"><\/p>\n<p>Buying an asset at a specified price in the future is called “<strong>going long<\/strong>”, or “<strong>longing<\/strong>”, while the process of selling it is called “<strong>going short<\/strong>”, or “<strong>shorting<\/strong>”. These are terms that you’re likely to come across quite often, in your journey to figuring out what is a perpetual contract, so it’s a good idea to keep them in mind!<\/p>\n<p>Another term that you also need to be aware of is “<strong>inverse perpetual contracts<\/strong>”. Once again, it sounds fancy, but it’s actually really simple.<\/p>\n<p>Perpetual futures contracts are usually settled in <a href=https://www.bitdegree.org/"//crypto//buy-tether-usdt/">USDT, or some other <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-stablecoin/">stablecoin. <strong>Inverse perpetual contracts, on the other hand, get settled in the underlying cryptocurrency<\/strong>. Not only that, but risk exposure, as well as margin, will also be calculated via the select cryptocurrency, instead of a stablecoin.<\/p>\n<p>Yet another new term - <strong>margin<\/strong>! Bear with me - I know that I’m barraging you with complex crypto trading jargon, but all of these terms are really important to know, in order to fully understand what is a perpetual contract in crypto!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is a perpetual contract: Margin trading.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-a-perpetual-contract-04.jpg/" alt=\"What is a perpetual contract: Margin trading.\" width=\"1000\" height=\"563\"><\/p>\n<p>In <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//tutorials//what-is-margin-trading-crypto/">margin trading<\/strong><\/a>, you would <strong>borrow funds from the exchange platform that you’re using, in order to trade with them<\/strong>. This is called leverage - the term “margin” essentially refers to the amount of money you would need to put up, as <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-collateral/">collateral for the borrowed funds.<\/p>\n<p><em>So here’s an example.<\/em><\/p>\n<p>Imagine that you found an apple shop, that sells large bags of apples for $100 each. You believe that the price of apples is going to go up, and that now’s a great time to buy them. However, you only have $20 in your pocket. So, you decide to borrow some money from a friend, at 100:1 leverage.<\/p>\n<p>In a scenario like this, <strong>the margin could be as low as 1% of the price<\/strong> - so, $1! The rest of your money - $19 - can theoretically be used to buy anything else, even though it’s usually advisable to <strong>keep some money with you<\/strong>, in case the price of apples starts falling down, and your purchase starts working against you, so to speak. In a scenario like this, you would be <strong>forced to sell your apples at a loss<\/strong>, and would also have to give back the money to the friend that you borrowed it from.<\/p>\n<p>What it all boils down to is this - with crypto perpetual futures, or even inverse perpetual contracts, you can <strong>participate in leveraged trades, thus boosting your potential financial gains<\/strong> (<em>as well as losses, mind you!<\/em>). Leverage is a risky tool to use, and is often preferred by experienced and advanced-level traders who know what they’re doing.<\/p>\n<h2>Introducing BYDFi - 200x Leverage in Perpetual Contracts<\/h2>\n<p>So, to answer the question of what is a perpetual futures contract, in short, it’s a tool used by (<em>mostly<\/em>) experienced traders who either want to <strong>speculate on how the market will turn<\/strong>, and potentially make a significant profit in doing so, or as a <strong>means of passive income<\/strong>, via something called <strong>funding fees<\/strong>.<\/p>\n<p>Now, don’t worry - I won’t overburden you with even more complex terminology, since we’d be getting into some of the more advanced technicalities of crypto perps.<\/p>\n<p>For the time being, though, we still need to talk about <strong>how to get started with perpetual contracts in crypto<\/strong>, if that’s something that you’d be interested in doing. While you could use any high-end exchange that you prefer, in this section, I’m going to be using <a href=https://www.bitdegree.org/"//crypto//goon//bydfi/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>BYDFi<\/strong><\/a> - <em>a platform that Forbes considers to be one of the best cryptocurrency exchanges of the year!<\/em><\/p>\n<p><strong>BYDFi has a variety of different benefits to offer to its clients<\/strong> - everything from top-tier security and regulation, all the way to different trading tools, more than 400 different crypto assets, and appropriate trading fees. The reason why I chose this particular platform, though, is because perpetual futures contracts are actually one of its main features!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is a perpetual contract: Funding fees.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-a-perpetual-contract-05.jpg/" alt=\"What is a perpetual contract: Funding fees.\" width=\"1000\" height=\"511\"><\/p>\n<p><em>So, let’s get started, shall we?<\/em><\/p>\n<p>First of all, you’ll need to <strong>navigate to BYDFi’s official website<\/strong>. Click the big yellow “<strong>GET STARTED<\/strong>” button at the top of the page. Here, you’ll need to enter all of your relevant details, such as your email, and think of a password. You can also register via a mobile number, as well.<\/p>\n<p>Once you verify your email address, you’ll be registered - quick and simple!<\/p>\n<p>Now, the very first thing that you’ll want to do is <strong>deposit some assets into your account<\/strong>. You could either transfer cryptocurrency that you already own, or purchase some, straight on BYDFi itself. If you choose to deposit, all that you need to do is navigate to the “<strong>Assets<\/strong>” section at the top of the page, click on “<strong>Deposit<\/strong>”, and pick a cryptocurrency and the correct network. An address will generate, and all you have to do now is simply transfer crypto to it - <em>that’s it!<\/em><\/p>\n<p>If you opt to <strong>buy cryptocurrency on BYDFi directly<\/strong>, the process is super-quick, as well. Simply navigate to the “<strong>Buy Crypto<\/strong>” tab under your “<strong>Assets<\/strong>” section, and you’ll be presented with a few different payment gateways. Enter the type and amount of crypto that you'd like to purchase, pick the currency that you want to spend, and choose the best gateways for yourself - after you complete your purchase, your BYDFi account will be credited!<\/p>\n<p>Now that you have your funds ready, and have figured out what is a perpetual contract in crypto, you can go ahead and explore this part of BYDFi!<\/p>\n<p>First, you’ll need to <strong>transfer funds from your <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//tutorials//what-is-spot-trading-in-crypto/">Spot account to the perpetual contracts one<\/strong>. Then, you’ll need to, once again, navigate to the top of the screen, and hover over the “<strong>Derivatives<\/strong>” section. Here, you will see “<strong>USDT-M<\/strong>” and “<strong>COIN-M<\/strong>”. USDT-M are traditional perps, while COIN-M are inverse perpetual contracts. For the sake of this section, though, let’s take a look at USDT-M.<\/p>\n<p>So, the first thing that you’ll want to do is <strong>check out the trading rules<\/strong> - you can find them by clicking on the little book below the “<strong>Assets<\/strong>” section, at the top of the screen. Once you’re familiar with the core rules of how crypto perpetual futures work with BYDFi, you can start exploring the interface, and trading.<\/p>\n<p><strong>Don’t forget to pick between isolated and cross-margin!<\/strong> What this essentially means is that, with cross-margin, you’ll be able to use funds from your available perpetual account balance, while isolated margin will essentially “<em>dedicate<\/em>”, so to speak, a set amount of money specifically for the open position.<\/p>\n<p>BYDFi offers clients a lot of <strong>different customization options, as well as trade types<\/strong>. You can choose your type (<a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-market-order-market-buy-market-sell/">Market, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-limit-order-limit-buy-limit-sell/">Limit, Stop Market or Stop Limit), your Take Profit \/ <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-stop-loss-order/">Stop Loss<\/strong><\/a> metrics, as well as your <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-leverage/">leverage. All of these actions can be performed from the menu on the right side of the trading interface.<\/p>\n<p>So, all that’s left to do is <strong>set your preferred parameters<\/strong>, and start trading!<\/p>\n<h2>Wrapping Up<\/h2>\n<p>That’s about it! If you’ve read this section attentively, you should now be quite familiar with both what is a perpetual contract in crypto, as well as how you can start perpetual contract trading yourself, with the help of one of the leading crypto exchanges on the market - <a href=https://www.bitdegree.org/"//crypto//goon//bydfi/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>BYDFi<\/strong><\/a>!<\/p>\n<p>Of course, granted that it’s such as vast topic, <strong>there were quite a few things that we haven’t touched on<\/strong>, such as the question of are perpetual contracts enforceable, the aforementioned funding fees, and many more. Either way, you now have a solid foundation for expanding your knowledge on perpetual contract trading further.<\/p>","definition":"Did you know that perpetual contracts fall into the category of derivatives?","status":"published","meta_title":"What is a Perpetual Contract in Crypto?","meta_description":"Want to know what is a perpetual contract? Are perpetual contracts enforceable? What are inverse perpetual contracts? Find that out here!","meta_keywords":"what is a perpetual contract, perpetual contracts crypto, perpetual futures contracts, what is a perpetual futures contract, inverse perpetual contracts, are perpetual contracts enforceable, what is perpetual contract trading, crypto perpetual futures, perpetual contract trading","modified_content":"<p><span style=\"font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen, Ubuntu, Cantarell, 'Open Sans', 'Helvetica Neue', sans-serif;\">In this section, I’m going to explain <strong>what is a perpetual contract in crypto<\/strong>!<\/span><\/p>\n<p>Cryptocurrency trading is increasingly becoming a more and more popular activity. It makes sense, then, that there are new tools and services popping up, aimed at advancing this activity even further, as well as offering traders a variety of choices.<\/p>\n<p>While <strong>perpetual contracts in crypto aren’t anything new<\/strong>, <em>per se<\/em>, they are definitely still a mystery to many. These trading tools are usually considered to be really advanced, and targeted at only the most experienced of traders. This, in turn, makes them out to be shrouded in mystery. Well, today, I’ll uncover this mystery, and tell you all about what is perpetual contract trading!<\/p>\n<p>In this section, we’ll talk about perpetual contracts. To be a bit more specific, I’ll tell you about what these contracts are, how do they work, what type of traders they are going to suit best, as well as look into <a href=https://www.bitdegree.org/"//crypto//goon//bydfi/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>BYDFi<\/strong><\/a> - a specific exchange platform that specializes in perpetual contracts.<\/p>\n<p><em>Let’s get right into it!<\/em><\/p>\n<h2>What are Perpetual Contracts, and How Do They Work?<\/h2>\n<p>As per usual, we’ll start off by getting the dry definitions out of the way, first. However, I do have to give a disclaimer here - <strong>while our goal is to demystify perpetual futures contracts, this topic still requires that you have at least a fundamental understanding of how the crypto market works, and what is cryptocurrency trading, in general<\/strong>.<\/p>\n<p>If you feel like your knowledge could use a refresher, don’t sweat - there are dedicated sections in this <strong>Crypto 101 Handbook<\/strong> that cover these topics! Make sure to check them out, before diving into this section - it’ll make things much easier!<\/p>\n<p>Alright, with that out of the way, let’s tackle the big question - <em>what is a perpetual contract in crypto?<\/em><\/p>\n<p><em><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is a perpetual contract: Crypto futures contracts.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-a-perpetual-contract-01.jpg/" alt=\"What is a perpetual contract: Crypto futures contracts.\" width=\"1000\" height=\"578\"><\/em><\/p>\n<p>Well, as far as the definition is concerned, most reputable resources will tell you that perpetual contracts are “<strong>crypto futures contracts that don’t have an expiry date<\/strong>”. <em>That doesn’t really help, now does it?<\/em><\/p>\n<p><em>Let’s break it down.<\/em><\/p>\n<p>Often referred to simply as “<strong>crypto perps<\/strong>”, perpetual contracts are, first and foremost, <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-derivative/">derivatives. As the term might suggest, a derivative is something that <strong>derives its value from an underlying asset<\/strong> - in this case, a cryptocurrency. So, in short, when you deal with perpetual contracts, you don’t actually buy or sell crypto assets - instead, you’re dealing with contracts that have their values tied to those cryptos.<\/p>\n<p>That’s one part of what constitutes perpetual contracts in crypto. Another huge point that you need to consider is that perpetual contracts are a <strong>special type of “<a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-are-futures/">futures” contract<\/strong>. Once again, the term itself is a giveaway - futures contracts employ two parties (a buyer and a seller) to exchange a crypto asset of their choice sometime in the future, for a predetermined price.<\/p>\n<p>The thing that makes perpetual futures contracts interesting, and different from simple futures contracts, is the fact that, with crypto perps, the trading usually (<em>but not necessarily!<\/em>) happens <strong>close to the underlying price of an asset, and you can actually hold your position indefinitely<\/strong> - in other words, it doesn’t expire.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is a perpetual contract: Perpetual contracts don't expire.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-a-perpetual-contract-02.jpg/" alt=\"What is a perpetual contract: Perpetual contracts don't expire.\" width=\"1000\" height=\"556\"><\/p>\n<p>Now, that’s a lot of seemingly-fancy terms that I’ve just thrown at you. Let’s put it all into place - <strong>here’s a down-to-earth example<\/strong>.<\/p>\n<p>Imagine that, right now, <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoin costs $10,000. Judging by all of the different <a href=https://www.bitdegree.org/"//crypto//news/">news stories<\/strong><\/a> coming out within the market, you sense that people are getting more and more bullish, and that the price might start rising really soon.<\/p>\n<p>Since you’re a clever trader, you decide to jump on this opportunity, and utilize perpetual futures contracts to potentially make some profits.<\/p>\n<p>So, you navigate to a reliable crypto exchange that has perpetual contract functionality (such as <a href=https://www.bitdegree.org/"//crypto//goon//bydfi/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>BYDFi<\/strong><\/a>), and set up your order. Since you believe that the price of BTC will rise to at least $15,000 in the next month, your order would sound a little something like this:<\/p>\n<p><strong>“Buy 1 BTC for $10,000 in one month”.<\/strong><\/p>\n<p><em>Of course, you don’t need to buy an entire Bitcoin, or any other cryptocurrency - this is just to keep the example as straightforward as possible.<\/em><\/p>\n<p>So, in a month’s time, if BTC reaches $15,000, you’ll be able to acquire it for $10,000, which will give you a profit of $5000. As you’re learning about what is a perpetual contract in crypto, you will soon stumble across another really cool feature of perps - the fact that<strong> you don’t actually need to wait for an entire month to close your position<\/strong>.<\/p>\n<p>So, for example, if you see that, during the month, the price of Bitcoin keeps on fluctuating, and you’re less positive that it’ll actually reach $15,000 at your specified point in time, you could close your position whenever you deem fit, whether it be in a week, 15 days, or else. There’s a lot of flexibility involved, which is definitely much appreciated!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is a perpetual contract: Longing and shorting.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-a-perpetual-contract-03.jpg/" alt=\"What is a perpetual contract: Longing and shorting.\" width=\"1000\" height=\"575\"><\/p>\n<p>Buying an asset at a specified price in the future is called “<strong>going long<\/strong>”, or “<strong>longing<\/strong>”, while the process of selling it is called “<strong>going short<\/strong>”, or “<strong>shorting<\/strong>”. These are terms that you’re likely to come across quite often, in your journey to figuring out what is a perpetual contract, so it’s a good idea to keep them in mind!<\/p>\n<p>Another term that you also need to be aware of is “<strong>inverse perpetual contracts<\/strong>”. Once again, it sounds fancy, but it’s actually really simple.<\/p>\n<p>Perpetual futures contracts are usually settled in <a href=https://www.bitdegree.org/"//crypto//buy-tether-usdt/">USDT, or some other <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-stablecoin/">stablecoin. <strong>Inverse perpetual contracts, on the other hand, get settled in the underlying cryptocurrency<\/strong>. Not only that, but risk exposure, as well as margin, will also be calculated via the select cryptocurrency, instead of a stablecoin.<\/p>\n<p>Yet another new term - <strong>margin<\/strong>! Bear with me - I know that I’m barraging you with complex crypto trading jargon, but all of these terms are really important to know, in order to fully understand what is a perpetual contract in crypto!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is a perpetual contract: Margin trading.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-a-perpetual-contract-04.jpg/" alt=\"What is a perpetual contract: Margin trading.\" width=\"1000\" height=\"563\"><\/p>\n<p>In <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//tutorials//what-is-margin-trading-crypto/">margin trading<\/strong><\/a>, you would <strong>borrow funds from the exchange platform that you’re using, in order to trade with them<\/strong>. This is called leverage - the term “margin” essentially refers to the amount of money you would need to put up, as <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-collateral/">collateral for the borrowed funds.<\/p>\n<p><em>So here’s an example.<\/em><\/p>\n<p>Imagine that you found an apple shop, that sells large bags of apples for $100 each. You believe that the price of apples is going to go up, and that now’s a great time to buy them. However, you only have $20 in your pocket. So, you decide to borrow some money from a friend, at 100:1 leverage.<\/p>\n<p>In a scenario like this, <strong>the margin could be as low as 1% of the price<\/strong> - so, $1! The rest of your money - $19 - can theoretically be used to buy anything else, even though it’s usually advisable to <strong>keep some money with you<\/strong>, in case the price of apples starts falling down, and your purchase starts working against you, so to speak. In a scenario like this, you would be <strong>forced to sell your apples at a loss<\/strong>, and would also have to give back the money to the friend that you borrowed it from.<\/p>\n<p>What it all boils down to is this - with crypto perpetual futures, or even inverse perpetual contracts, you can <strong>participate in leveraged trades, thus boosting your potential financial gains<\/strong> (<em>as well as losses, mind you!<\/em>). Leverage is a risky tool to use, and is often preferred by experienced and advanced-level traders who know what they’re doing.<\/p>\n<h2>Introducing BYDFi - 200x Leverage in Perpetual Contracts<\/h2>\n<p>So, to answer the question of what is a perpetual futures contract, in short, it’s a tool used by (<em>mostly<\/em>) experienced traders who either want to <strong>speculate on how the market will turn<\/strong>, and potentially make a significant profit in doing so, or as a <strong>means of passive income<\/strong>, via something called <strong>funding fees<\/strong>.<\/p>\n<p>Now, don’t worry - I won’t overburden you with even more complex terminology, since we’d be getting into some of the more advanced technicalities of crypto perps.<\/p>\n<p>For the time being, though, we still need to talk about <strong>how to get started with perpetual contracts in crypto<\/strong>, if that’s something that you’d be interested in doing. While you could use any high-end exchange that you prefer, in this section, I’m going to be using <a href=https://www.bitdegree.org/"//crypto//goon//bydfi/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>BYDFi<\/strong><\/a> - <em>a platform that Forbes considers to be one of the best cryptocurrency exchanges of the year!<\/em><\/p>\n<p><strong>BYDFi has a variety of different benefits to offer to its clients<\/strong> - everything from top-tier security and regulation, all the way to different trading tools, more than 400 different crypto assets, and appropriate trading fees. The reason why I chose this particular platform, though, is because perpetual futures contracts are actually one of its main features!<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is a perpetual contract: Funding fees.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-a-perpetual-contract-05.jpg/" alt=\"What is a perpetual contract: Funding fees.\" width=\"1000\" height=\"511\"><\/p>\n<p><em>So, let’s get started, shall we?<\/em><\/p>\n<p>First of all, you’ll need to <strong>navigate to BYDFi’s official website<\/strong>. Click the big yellow “<strong>GET STARTED<\/strong>” button at the top of the page. Here, you’ll need to enter all of your relevant details, such as your email, and think of a password. You can also register via a mobile number, as well.<\/p>\n<p>Once you verify your email address, you’ll be registered - quick and simple!<\/p>\n<p>Now, the very first thing that you’ll want to do is <strong>deposit some assets into your account<\/strong>. You could either transfer cryptocurrency that you already own, or purchase some, straight on BYDFi itself. If you choose to deposit, all that you need to do is navigate to the “<strong>Assets<\/strong>” section at the top of the page, click on “<strong>Deposit<\/strong>”, and pick a cryptocurrency and the correct network. An address will generate, and all you have to do now is simply transfer crypto to it - <em>that’s it!<\/em><\/p>\n<p>If you opt to <strong>buy cryptocurrency on BYDFi directly<\/strong>, the process is super-quick, as well. Simply navigate to the “<strong>Buy Crypto<\/strong>” tab under your “<strong>Assets<\/strong>” section, and you’ll be presented with a few different payment gateways. Enter the type and amount of crypto that you'd like to purchase, pick the currency that you want to spend, and choose the best gateways for yourself - after you complete your purchase, your BYDFi account will be credited!<\/p>\n<p>Now that you have your funds ready, and have figured out what is a perpetual contract in crypto, you can go ahead and explore this part of BYDFi!<\/p>\n<p>First, you’ll need to <strong>transfer funds from your <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//tutorials//what-is-spot-trading-in-crypto/">Spot account to the perpetual contracts one<\/strong>. Then, you’ll need to, once again, navigate to the top of the screen, and hover over the “<strong>Derivatives<\/strong>” section. Here, you will see “<strong>USDT-M<\/strong>” and “<strong>COIN-M<\/strong>”. USDT-M are traditional perps, while COIN-M are inverse perpetual contracts. For the sake of this section, though, let’s take a look at USDT-M.<\/p>\n<p>So, the first thing that you’ll want to do is <strong>check out the trading rules<\/strong> - you can find them by clicking on the little book below the “<strong>Assets<\/strong>” section, at the top of the screen. Once you’re familiar with the core rules of how crypto perpetual futures work with BYDFi, you can start exploring the interface, and trading.<\/p>\n<p><strong>Don’t forget to pick between isolated and cross-margin!<\/strong> What this essentially means is that, with cross-margin, you’ll be able to use funds from your available perpetual account balance, while isolated margin will essentially “<em>dedicate<\/em>”, so to speak, a set amount of money specifically for the open position.<\/p>\n<p>BYDFi offers clients a lot of <strong>different customization options, as well as trade types<\/strong>. You can choose your type (<a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-market-order-market-buy-market-sell/">Market, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-limit-order-limit-buy-limit-sell/">Limit, Stop Market or Stop Limit), your Take Profit \/ <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-stop-loss-order/">Stop Loss<\/strong><\/a> metrics, as well as your <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-leverage/">leverage. All of these actions can be performed from the menu on the right side of the trading interface.<\/p>\n<p>So, all that’s left to do is <strong>set your preferred parameters<\/strong>, and start trading!<\/p>\n<h2>Wrapping Up<\/h2>\n<p>That’s about it! If you’ve read this section attentively, you should now be quite familiar with both what is a perpetual contract in crypto, as well as how you can start perpetual contract trading yourself, with the help of one of the leading crypto exchanges on the market - <a href=https://www.bitdegree.org/"//crypto//goon//bydfi/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>BYDFi<\/strong><\/a>!<\/p>\n<p>Of course, granted that it’s such as vast topic, <strong>there were quite a few things that we haven’t touched on<\/strong>, such as the question of are perpetual contracts enforceable, the aforementioned funding fees, and many more. Either way, you now have a solid foundation for expanding your knowledge on perpetual contract trading further.<\/p>","youtube_video":null}"
:model="{"id":476,"chapter_id":7,"order":8,"featured_image_id":3090,"youtube_video_id":65,"author_id":1,"created_at":"2023-04-20T11:14:50.000000Z","updated_at":"2023-12-22T08:52:51.000000Z","slug":"what-is-fud","title":"What is FUD: How to Use It to Your Advantage While Investing in Crypto?","content":"<p><span style=\"font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen, Ubuntu, Cantarell, 'Open Sans', 'Helvetica Neue', sans-serif;\">In this section, we’re going to talk about <strong>what is FUD in investing, and how to profit from it<\/strong>!<\/span><\/p>\n<p>Ironically, the word <em>“FUD”<\/em> causes FUD for those who don’t know what this abbreviation stands for, which is “<strong>Fear, Uncertainty and Doubt<\/strong>”. But, there’s no need to fear FUD. You can even profit from it, and there are many who do exactly that.<\/p>\n<p>Emotions play a critical role in everything. Therefore, it’s not a surprise that markets, especially ones that are as versatile as crypto, are directly affected by the predominant sentiments. But, once you become aware of how it influences people’s financial decisions, you learn how to read between the lines, and how to avoid being blinded by irrational fear.<\/p>\n<p>In this section, <strong>I’m going to talk about what is FUD in crypto investing<\/strong> - specifically, how it affects people’s investment strategies and the cryptocurrency market, and how not to give into it. I’ll share particular examples about how FUD had led people into financial losses, and the exact opposite - how smart investors sensed the market sentiment, and ended up counting financial gains while everyone else thought that the ship was sinking.<\/p>\n<p><em>Fear no more, and let’s dive into it!<\/em><\/p>\n<h2>What is FUD?<\/h2>\n<p>As I’ve told you in the introductory part, <strong>FUD stands for Fear, Uncertainty, and Doubt<\/strong>. These three unpleasant emotions play a huge part in crypto, as well as the broader financial markets, in general. They affect how people act, what they buy, what they sell, where and how much they invest. When these emotions prevail, it affects the entire industry, and numbers on charts turn red.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Fear, Uncertainty, and Doubt.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-01.jpg/" alt=\"What is FUD: Fear, Uncertainty, and Doubt.\" width=\"1000\" height=\"557\" \/><\/p>\n<p>These sentiments arise and grip the market for various reasons, and on different occasions. <strong>Sometimes, FUD spreads uncontrollably<\/strong> for objective reasons, such as huge companies going bankrupt, or political bodies implementing policies that may potentially be detrimental to particular investments.<\/p>\n<p>A great example of this could be found in the year 2021. It was the time when the word began spreading that the <strong>Chinese government was about to implement a total ban on crypto<\/strong>. China was very active in terms of <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//tutorials//how-to-mine-cryptocurrency/">crypto mining<\/a> operations; therefore people feared that a sudden shock like this could give a massive blow to the industry. Which, of course, would affect crypto prices, and cause financial losses for most traders.<\/p>\n<p>Naturally, this news caused a wave of FUD in the crypto world, as investors and traders became concerned about saving their money. As time later revealed, the fears were justified, as China really did implement the crypto ban, and the effects on the market were felt by everyone.<\/p>\n<p>This was an example of <strong>FUD caused by unsettling rumors<\/strong> that eventually turned out to be true. But it’s not always the case. In reality, usually, it’s quite the opposite.<\/p>\n<p>Sometimes false rumors begin making rounds on social media, and if no respected figure steps in to deny them in time, the waves of FUD can cause real damage. And in cases like this, the damage comes from the fact that unverified information affected traders’ emotions, and they all gave in to fear, uncertainty and doubt.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: This rumor is false!\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-02.jpg/" alt=\"What is FUD: This rumor is false!\" width=\"1000\" height=\"589\" \/><\/p>\n<p>Here’s an example. Several months before the rumors about China’s ban, in May 2021, the word began spreading that <strong>the US Treasury was planning to strictly intensify crypto regulation<\/strong>.<\/p>\n<p>FUD quickly spread, and led to a significant drop in the prices of such cryptocurrencies as <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoin and <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">Ethereum. As the prices began falling, people began panicking. In order to save their investments, many traders rushed to sell their crypto assets, which, in turn, only further accelerated the spread of the unpleasant sentiment and the decline in crypto prices. Even though all of this was caused by a false rumor, it created a vicious circle, and a snowball effect.<\/p>\n<p>So, that’s an example of how false news and fake information can cause FUD. As you can already tell, <strong>when it comes to FUD, a savvy investor must always remain sharp and vigilant<\/strong> in order not to fall prey to rumors taken out of thin air.<\/p>\n<p>There are a lot of similarities between how rumors function in the crypto market, and in real life. Sometimes they turn out to be true, sometimes, they get debunked as pure nonsense. But, there’s one more element that needs to be considered when talking about what is FUD in crypto investing. Just like gossip, <strong>FUD is often created by people who have particular goals in their minds<\/strong>. <em>And these goals can get pretty sinister.<\/em><\/p>\n<p>Market manipulators or competitors of a particular cryptocurrency, or a crypto-related company, love FUD. If the rumor doesn’t get debunked fast enough, the coin, or a company that's surrounded by artificially-caused clouds of FUD can get damaged.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Market manipulators.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-03.jpg/" alt=\"What is FUD: Market manipulators.\" width=\"1000\" height=\"600\" \/><\/p>\n<p>As mentioned before, <strong>FUD causes panic-selling<\/strong>, as traders try not to lose their investments. So, if the FUD is targeted at a particular coin, it can lead to a significant drop in its price. If the FUD doesn’t get dispersed quick enough, it can lead to a loss of confidence in the coin, the company, or even the entire industry, as people begin to literally feel fearful, uncertain and doubtful about continuing to invest their money into it.<\/p>\n<p>But then again, where there are losers, there are also winners. Market manipulators understand this very well, and every time they notice an irrational behavior becoming more and more prevalent in the market, they begin sensing new opportunities.<\/p>\n<p><strong>If the rumor is false, it will eventually get debunked, the FUD cycle will come to an end<\/strong>. But until then, the artificially created FUD does its job for them.<\/p>\n<p>If people began abandoning a certain coin, it would lead to its decrease in value. This opens up opportunities for market manipulators to rush in, buy this coin at a lower value, and then, once it gets back on its feet, sell it at a higher price than they bought it for.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Profit.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-04.jpg/" alt=\"What is FUD: Profit.\" width=\"1000\" height=\"495\" \/><\/p>\n<p>Here’s a more prominent example of how one man got accused of market manipulation. In May 2021, <strong>Elon Musk tweeted that Tesla would no longer accept Bitcoin as payment<\/strong> <strong>for its products<\/strong>. Of course, this caused a lot of panic among investors, which resulted in <a href=https://www.bitdegree.org/"//cryptocurrency-prices//bitcoin-btc-price/">the price of Bitcoin<\/a> falling by over 10% in less than a day.<\/p>\n<p>For doing so, he got accused of market manipulation. Of course, he knew that a tweet like this would result in Bitcoin’s price taking a hit. And you can be sure that there were traders who saw this tweet as an opportunity to buy Bitcoin with a discount, as they were sure that many people would begin panic-selling their crypto holdings.<\/p>\n<h2>How to See Through FUD?<\/h2>\n<p>Up until this point, I’ve explained that <strong>FUD may be caused by<\/strong>:<\/p>\n<ul class=\"pros-check\">\n<li>Information that eventually turns out to be true;<\/li>\n<li>Rumors that are not true;<\/li>\n<li>Rumors that are purposefully spread in order to cause panic and chaos in the market, so that market manipulators could profit from everyone’s losses.<\/li>\n<\/ul>\n<p>It’s obvious that this market is very much affected by emotions, especially negative ones. One of the main reasons for that is the fact that <strong>social media plays a very important role in the crypto industry<\/strong>.<\/p>\n<p>As new coins, technologies, updates, and opinions are minted on a daily basis, people need to stay in touch with all the latest developments within the industry, in order not to miss out or sleep on new investment opportunities.<\/p>\n<p>But, as always, it’s a double-edged sword. <strong>Overly-intense reliance on social media gets weaponized by those who profit from FUD<\/strong>. Social media enables rumors and negative information to spread quickly. Therefore, in order to stay sane and safe in the crypto sphere, it is of utmost importance to always remain critical, and avoid blindly jumping on hype, fear, or other emotion-based bandwagons.<\/p>\n<p>Thankfully, there are helpful tools that can help traders check the emotional climate in the market. The most famous one is called the “<strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-fear-and-greed-index/">Crypto Fear & Greed Index<\/a><\/strong>.”<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Crypto Fear & Greed Index.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-05.jpg/" alt=\"What is FUD: Crypto Fear & Greed Index.\" width=\"1000\" height=\"622\" \/><\/p>\n<p>By analyzing and measuring the prevailing emotions in the market, this index expresses how does the market feel at a given day on a scale from 0 to 100.<\/p>\n<p><strong>0 represents “Extreme fear”, while the highest number -<\/strong> <strong>100 - represents “Extreme greed.”<\/strong><\/p>\n<p>Logically, when FUD is all over the place, the index turns red, and the number will get lower. So, when someone begins panicking a bit too much, they can take a look at this index, and get a reality check about how severe the situation truly is. <strong>The index serves a simple purpose, and its to help people deal with their emotions and not to overreact<\/strong>. <\/p>\n<p>If you want to take a look at how does the market feel like today, you can see it at <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//fear-and-greed-index/">Bitdegree.org, where you’ll find a daily-updated crypto fear & greed index.<\/p>\n<p>Nevertheless, life would be too easy if a simple index could help people avoid losses, or lead directly to gains. Sometimes, colossal changes happen super fast, and relying simply on indexes like this one could be very risky to your financial well-being.<\/p>\n<p>There’s something else that experienced traders would recommend to anyone who’s worried about being affected by FUD too much. It’s called <strong>diversifying your portfolio<\/strong>. It’s a simple investment strategy that improves your resilience when the FUD clouds begin rising.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Diversifying your portfolio.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-06.jpg/" alt=\"What is FUD: Diversifying your portfolio.\" width=\"1000\" height=\"610\" \/><\/p>\n<p>If the market sentiment turns negative, and it affects a particular coin, traders better hope that this wasn’t the coin that they put all their savings into. It’s a crypto version of the old, wise saying that tells us <em>“not to put all the eggs into a single basket.” <\/em>If one coin gets affected by FUD, other coins may be able to avoid it. <strong>Having a diversified portfolio is the best way of ensuring that a single rumor won’t take down someone’s entire financial well-being<\/strong>.<\/p>\n<p>And finally, anyone who enters crypto has to realize that many projects, especially the real, promising ones, are here for the long term. After conducting their own, personal due diligence procedures, traders must evaluate that truly potential projects will survive FUD caused by false, or easily-deniable rumors.<\/p>\n<p>In cases like this, once again, <strong>FUD creates new investment opportunities<\/strong>. When negative news causes a particular crypto coin’s price to drop, this may turn out to be a great opportunity to <em>“buy the dip”.<\/em> This expression translates to buying the coin at a lower price, and potentially profiting from it when the asset makes a comeback.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Trader.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-07.jpg/" alt=\"What is FUD: Trader.\" width=\"1000\" height=\"554\" \/><\/p>\n<p>And in addition to that, <strong>many FUD occurrences could be defined as short-lived<\/strong>. The crypto space, be it the market itself, or the crypto social media bubbles, are hyper volatile. New discussions, accusations, ideas, and conflicts occur every minute. New rumors are being created every day, and most of them get forgotten very quickly.<\/p>\n<p>Therefore, <strong>calm and patient traders recognize attempts at causing FUD<\/strong>, and don’t let themselves be bothered by these efforts at catching your attention.<\/p>\n<h2>Wrapping Up<\/h2>\n<p>In this section, I’ve covered <strong>what is FUD in investing, from a crypto perspective, in what forms it appears, and how it can affect the crypto market<\/strong>. Quite naturally, recognizing FUD and being able to not let it get into your head is a must for every trader who wishes to see success in their trading ventures.<\/p>\n<p>Understanding what causes FUD, and that it can be an artificially created chaos that market manipulators could take advantage of, provides traders with a new perspective, and a new skill of being more suspicious & less susceptible to emotions and irrational behavior. And that’s definitely something that a trader should seek to obtain.<\/p>\n<p>I hope that from now on, you’ll recognize FUD, and the fear of asking the question <em>“what is FUD?”<\/em> won’t bother you anymore.<\/p>","definition":"Did you know that FUD is an acronym for \"Fear, Uncertainty, and Doubt\"?","status":"published","meta_title":"What is FUD and How Does It Affect the Crypto Market?","meta_description":"What is FUD? Well, the acronym stands for \"Fear, Uncertainty, and Doubt.\" Read this to find out how to benefit from FUD in crypto investing.","meta_keywords":"what is fud, what is a fud cycle, what is fud in investing","modified_content":"<p><span style=\"font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen, Ubuntu, Cantarell, 'Open Sans', 'Helvetica Neue', sans-serif;\">In this section, we’re going to talk about <strong>what is FUD in investing, and how to profit from it<\/strong>!<\/span><\/p>\n<p>Ironically, the word <em>“FUD”<\/em> causes FUD for those who don’t know what this abbreviation stands for, which is “<strong>Fear, Uncertainty and Doubt<\/strong>”. But, there’s no need to fear FUD. You can even profit from it, and there are many who do exactly that.<\/p>\n<p>Emotions play a critical role in everything. Therefore, it’s not a surprise that markets, especially ones that are as versatile as crypto, are directly affected by the predominant sentiments. But, once you become aware of how it influences people’s financial decisions, you learn how to read between the lines, and how to avoid being blinded by irrational fear.<\/p>\n<p>In this section, <strong>I’m going to talk about what is FUD in crypto investing<\/strong> - specifically, how it affects people’s investment strategies and the cryptocurrency market, and how not to give into it. I’ll share particular examples about how FUD had led people into financial losses, and the exact opposite - how smart investors sensed the market sentiment, and ended up counting financial gains while everyone else thought that the ship was sinking.<\/p>\n<p><em>Fear no more, and let’s dive into it!<\/em><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"What is FUD in Crypto? (Fear, Uncertainty & Doubt Explained)\"\n title=\"What is FUD in Crypto? (Fear, Uncertainty & Doubt Explained)\" class=\"border-0\">\n <p>Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: What is FUD: How to Use It to Your Advantage While Investing in Crypto?<\/h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"What is FUD: How to Use It to Your Advantage While Investing in Crypto?\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"_9iJ4tlM3LU\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n <p class=\"text-left dyk-video-title\">What is FUD in Crypto? (Fear, Uncertainty & Doubt Explained)<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-fud-in-crypto-fear-uncertainty-doubt-explained.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-fud-in-crypto-fear-uncertainty-doubt-explained.jpg?tr=w-760 1000w\"\n alt=\"What is FUD in Crypto? (Fear, Uncertainty & Doubt Explained)\"\n title=\"What is FUD in Crypto? (Fear, Uncertainty & Doubt Explained)\"\n class=\"p-0 lazyload\">\n <img class=\"play-button lazyload\" data-target=\"#video-modal\"\n data-src=\"https:\/\/assets.bitdegree.org\/crypto\/assets\/video-button.png?tr=w-85\"\n alt=\"What is FUD in Crypto? (Fear, Uncertainty & Doubt Explained)\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"><\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n <span>ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"><\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n <span>New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>What is FUD?<\/h2>\n<p>As I’ve told you in the introductory part, <strong>FUD stands for Fear, Uncertainty, and Doubt<\/strong>. These three unpleasant emotions play a huge part in crypto, as well as the broader financial markets, in general. They affect how people act, what they buy, what they sell, where and how much they invest. When these emotions prevail, it affects the entire industry, and numbers on charts turn red.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Fear, Uncertainty, and Doubt.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-01.jpg/" alt=\"What is FUD: Fear, Uncertainty, and Doubt.\" width=\"1000\" height=\"557\" \/><\/p>\n<p>These sentiments arise and grip the market for various reasons, and on different occasions. <strong>Sometimes, FUD spreads uncontrollably<\/strong> for objective reasons, such as huge companies going bankrupt, or political bodies implementing policies that may potentially be detrimental to particular investments.<\/p>\n<p>A great example of this could be found in the year 2021. It was the time when the word began spreading that the <strong>Chinese government was about to implement a total ban on crypto<\/strong>. China was very active in terms of <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//tutorials//how-to-mine-cryptocurrency/">crypto mining<\/a> operations; therefore people feared that a sudden shock like this could give a massive blow to the industry. Which, of course, would affect crypto prices, and cause financial losses for most traders.<\/p>\n<p>Naturally, this news caused a wave of FUD in the crypto world, as investors and traders became concerned about saving their money. As time later revealed, the fears were justified, as China really did implement the crypto ban, and the effects on the market were felt by everyone.<\/p>\n<p>This was an example of <strong>FUD caused by unsettling rumors<\/strong> that eventually turned out to be true. But it’s not always the case. In reality, usually, it’s quite the opposite.<\/p>\n<p>Sometimes false rumors begin making rounds on social media, and if no respected figure steps in to deny them in time, the waves of FUD can cause real damage. And in cases like this, the damage comes from the fact that unverified information affected traders’ emotions, and they all gave in to fear, uncertainty and doubt.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: This rumor is false!\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-02.jpg/" alt=\"What is FUD: This rumor is false!\" width=\"1000\" height=\"589\" \/><\/p>\n<p>Here’s an example. Several months before the rumors about China’s ban, in May 2021, the word began spreading that <strong>the US Treasury was planning to strictly intensify crypto regulation<\/strong>.<\/p>\n<p>FUD quickly spread, and led to a significant drop in the prices of such cryptocurrencies as <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoin and <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">Ethereum. As the prices began falling, people began panicking. In order to save their investments, many traders rushed to sell their crypto assets, which, in turn, only further accelerated the spread of the unpleasant sentiment and the decline in crypto prices. Even though all of this was caused by a false rumor, it created a vicious circle, and a snowball effect.<\/p>\n<p>So, that’s an example of how false news and fake information can cause FUD. As you can already tell, <strong>when it comes to FUD, a savvy investor must always remain sharp and vigilant<\/strong> in order not to fall prey to rumors taken out of thin air.<\/p>\n<p>There are a lot of similarities between how rumors function in the crypto market, and in real life. Sometimes they turn out to be true, sometimes, they get debunked as pure nonsense. But, there’s one more element that needs to be considered when talking about what is FUD in crypto investing. Just like gossip, <strong>FUD is often created by people who have particular goals in their minds<\/strong>. <em>And these goals can get pretty sinister.<\/em><\/p>\n<p>Market manipulators or competitors of a particular cryptocurrency, or a crypto-related company, love FUD. If the rumor doesn’t get debunked fast enough, the coin, or a company that's surrounded by artificially-caused clouds of FUD can get damaged.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Market manipulators.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-03.jpg/" alt=\"What is FUD: Market manipulators.\" width=\"1000\" height=\"600\" \/><\/p>\n<p>As mentioned before, <strong>FUD causes panic-selling<\/strong>, as traders try not to lose their investments. So, if the FUD is targeted at a particular coin, it can lead to a significant drop in its price. If the FUD doesn’t get dispersed quick enough, it can lead to a loss of confidence in the coin, the company, or even the entire industry, as people begin to literally feel fearful, uncertain and doubtful about continuing to invest their money into it.<\/p>\n<p>But then again, where there are losers, there are also winners. Market manipulators understand this very well, and every time they notice an irrational behavior becoming more and more prevalent in the market, they begin sensing new opportunities.<\/p>\n<p><strong>If the rumor is false, it will eventually get debunked, the FUD cycle will come to an end<\/strong>. But until then, the artificially created FUD does its job for them.<\/p>\n<p>If people began abandoning a certain coin, it would lead to its decrease in value. This opens up opportunities for market manipulators to rush in, buy this coin at a lower value, and then, once it gets back on its feet, sell it at a higher price than they bought it for.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Profit.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-04.jpg/" alt=\"What is FUD: Profit.\" width=\"1000\" height=\"495\" \/><\/p>\n<p>Here’s a more prominent example of how one man got accused of market manipulation. In May 2021, <strong>Elon Musk tweeted that Tesla would no longer accept Bitcoin as payment<\/strong> <strong>for its products<\/strong>. Of course, this caused a lot of panic among investors, which resulted in <a href=https://www.bitdegree.org/"//cryptocurrency-prices//bitcoin-btc-price/">the price of Bitcoin<\/a> falling by over 10% in less than a day.<\/p>\n<p>For doing so, he got accused of market manipulation. Of course, he knew that a tweet like this would result in Bitcoin’s price taking a hit. And you can be sure that there were traders who saw this tweet as an opportunity to buy Bitcoin with a discount, as they were sure that many people would begin panic-selling their crypto holdings.<\/p>\n<h2>How to See Through FUD?<\/h2>\n<p>Up until this point, I’ve explained that <strong>FUD may be caused by<\/strong>:<\/p>\n<ul class=\"pros-check\">\n<li>Information that eventually turns out to be true;<\/li>\n<li>Rumors that are not true;<\/li>\n<li>Rumors that are purposefully spread in order to cause panic and chaos in the market, so that market manipulators could profit from everyone’s losses.<\/li>\n<\/ul>\n<p>It’s obvious that this market is very much affected by emotions, especially negative ones. One of the main reasons for that is the fact that <strong>social media plays a very important role in the crypto industry<\/strong>.<\/p>\n<p>As new coins, technologies, updates, and opinions are minted on a daily basis, people need to stay in touch with all the latest developments within the industry, in order not to miss out or sleep on new investment opportunities.<\/p>\n<p>But, as always, it’s a double-edged sword. <strong>Overly-intense reliance on social media gets weaponized by those who profit from FUD<\/strong>. Social media enables rumors and negative information to spread quickly. Therefore, in order to stay sane and safe in the crypto sphere, it is of utmost importance to always remain critical, and avoid blindly jumping on hype, fear, or other emotion-based bandwagons.<\/p>\n<p>Thankfully, there are helpful tools that can help traders check the emotional climate in the market. The most famous one is called the “<strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-fear-and-greed-index/">Crypto Fear & Greed Index<\/a><\/strong>.”<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Crypto Fear & Greed Index.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-05.jpg/" alt=\"What is FUD: Crypto Fear & Greed Index.\" width=\"1000\" height=\"622\" \/><\/p>\n<p>By analyzing and measuring the prevailing emotions in the market, this index expresses how does the market feel at a given day on a scale from 0 to 100.<\/p>\n<p><strong>0 represents “Extreme fear”, while the highest number -<\/strong> <strong>100 - represents “Extreme greed.”<\/strong><\/p>\n<p>Logically, when FUD is all over the place, the index turns red, and the number will get lower. So, when someone begins panicking a bit too much, they can take a look at this index, and get a reality check about how severe the situation truly is. <strong>The index serves a simple purpose, and its to help people deal with their emotions and not to overreact<\/strong>. <\/p>\n<p>If you want to take a look at how does the market feel like today, you can see it at <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//fear-and-greed-index/">Bitdegree.org, where you’ll find a daily-updated crypto fear & greed index.<\/p>\n<p>Nevertheless, life would be too easy if a simple index could help people avoid losses, or lead directly to gains. Sometimes, colossal changes happen super fast, and relying simply on indexes like this one could be very risky to your financial well-being.<\/p>\n<p>There’s something else that experienced traders would recommend to anyone who’s worried about being affected by FUD too much. It’s called <strong>diversifying your portfolio<\/strong>. It’s a simple investment strategy that improves your resilience when the FUD clouds begin rising.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Diversifying your portfolio.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-06.jpg/" alt=\"What is FUD: Diversifying your portfolio.\" width=\"1000\" height=\"610\" \/><\/p>\n<p>If the market sentiment turns negative, and it affects a particular coin, traders better hope that this wasn’t the coin that they put all their savings into. It’s a crypto version of the old, wise saying that tells us <em>“not to put all the eggs into a single basket.” <\/em>If one coin gets affected by FUD, other coins may be able to avoid it. <strong>Having a diversified portfolio is the best way of ensuring that a single rumor won’t take down someone’s entire financial well-being<\/strong>.<\/p>\n<p>And finally, anyone who enters crypto has to realize that many projects, especially the real, promising ones, are here for the long term. After conducting their own, personal due diligence procedures, traders must evaluate that truly potential projects will survive FUD caused by false, or easily-deniable rumors.<\/p>\n<p>In cases like this, once again, <strong>FUD creates new investment opportunities<\/strong>. When negative news causes a particular crypto coin’s price to drop, this may turn out to be a great opportunity to <em>“buy the dip”.<\/em> This expression translates to buying the coin at a lower price, and potentially profiting from it when the asset makes a comeback.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is FUD: Trader.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-fud-07.jpg/" alt=\"What is FUD: Trader.\" width=\"1000\" height=\"554\" \/><\/p>\n<p>And in addition to that, <strong>many FUD occurrences could be defined as short-lived<\/strong>. The crypto space, be it the market itself, or the crypto social media bubbles, are hyper volatile. New discussions, accusations, ideas, and conflicts occur every minute. New rumors are being created every day, and most of them get forgotten very quickly.<\/p>\n<p>Therefore, <strong>calm and patient traders recognize attempts at causing FUD<\/strong>, and don’t let themselves be bothered by these efforts at catching your attention.<\/p>\n<h2>Wrapping Up<\/h2>\n<p>In this section, I’ve covered <strong>what is FUD in investing, from a crypto perspective, in what forms it appears, and how it can affect the crypto market<\/strong>. Quite naturally, recognizing FUD and being able to not let it get into your head is a must for every trader who wishes to see success in their trading ventures.<\/p>\n<p>Understanding what causes FUD, and that it can be an artificially created chaos that market manipulators could take advantage of, provides traders with a new perspective, and a new skill of being more suspicious & less susceptible to emotions and irrational behavior. And that’s definitely something that a trader should seek to obtain.<\/p>\n<p>I hope that from now on, you’ll recognize FUD, and the fear of asking the question <em>“what is FUD?”<\/em> won’t bother you anymore.<\/p>","youtube_video":{"id":65,"channel_id":1,"sort":35,"video_title":"What is FUD in Crypto? (Fear, Uncertainty & Doubt Explained)","description":"What is FUD in crypto & how to see through it?\n\n\"FUD\" stands for \"Fear, Uncertainty, Doubt.\" These emotions play a crucial role in crypto. But those who understand them, and understand how emotional and irrational some traders can become, know how to profit from FUD.\n\nIn this video, you'll learn what is FUD in investing (crypto), how to recognize it, and how to avoid FUD getting into your head. I'll explain what can cause FUD, what are the different types of FUD, and how traders learn how to deal with it.\n\nHave you, personally, ever experienced FUD? Have you ever noticed attempts at creating FUD? If you have any insights, or examples, be sure to share them with everyone else in the comment section below!\n\nTo scan the current market sentiment, you can find the Crypto Fear & Greed Index right here: https:\/\/www.bitdegree.org\/cryptocurrency-prices\/fear-and-greed-index\n\nVideo Time Table:\n\n0:00 Introduction to What is FUD in Crypto\n1:15 What is FUD?\n5:14 Real-life FUD Example\n5:48 How to See Through FUD?\n9:27 Wrap-up: What is FUD in Crypto?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained\n\n#WhatisFUD #FUDCrypto #FearAndGreed","video_id":"_9iJ4tlM3LU","duration":620,"view_count":427,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-fud-in-crypto-fear-uncertainty-doubt-explained.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-05-19T14:45:42.000000Z","created_at":"2023-05-19T23:00:09.000000Z","updated_at":"2024-01-09T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}},"featured_image":{"id":3090,"uuid":"e13dc263-5785-4543-a4c3-d417dc742fad","name":"what-is-fud-featured-image.jpg","url":"https:\/\/assets.bitdegree.org\/crypto\/storage\/optimized\/what-is-fud-featured-image.jpg","path":"crypto\/storage\/optimized\/what-is-fud-featured-image.jpg","mime_type":"image\/jpeg","disk":"digitalOceanSpaces","size":66872,"width":1024,"height":576,"custom_properties":null,"created_at":"2023-06-19T06:58:40.000000Z","updated_at":"2023-06-19T06:58:40.000000Z"}}"
:chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? The Pros & Cons","status":"published","modified_content":null},{"chapter_id":2,"order":4,"slug":"coin-vs-token","title":"Coin VS Token: How Do They Differ?","status":"published","modified_content":null},{"chapter_id":2,"order":5,"slug":"what-are-stablecoins","title":"What are Stablecoins, Altcoins & Wrapped Coins?","status":"published","modified_content":null},{"chapter_id":2,"order":6,"slug":"what-is-a-bitcoin","title":"Bitcoin: the Pioneer of the Crypto World","status":"published","modified_content":null},{"chapter_id":2,"order":7,"slug":"what-is-ethereum","title":"The Ultimate Blockchain for dApp Creation: Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":8,"slug":"what-is-cardano-in-crypto","title":"What is Cardano and What is It Used For?","status":"published","modified_content":null},{"chapter_id":2,"order":9,"slug":"what-is-shiba-inu-coin","title":"Shiba Inu: the Dogecoin Killer","status":"published","modified_content":null},{"chapter_id":2,"order":10,"slug":"what-is-solana-in-crypto","title":"Is Solana an Improved Version of Ethereum?","status":"published","modified_content":null},{"chapter_id":2,"order":11,"slug":"what-is-polkadot-in-crypto","title":"The Bridge Between Blockchains: Polkadot","status":"published","modified_content":null},{"chapter_id":2,"order":12,"slug":"what-is-polygon-in-crypto","title":"Polygon: the Essential Scaling Solution for Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":13,"slug":"what-is-luna-crypto","title":"The Bumpy Road of Terra (LUNA)","status":"published","modified_content":null},{"chapter_id":2,"order":14,"slug":"what-is-fantom-crypto","title":"Is Fantom (FTM) Yet Another Ethereum Killer?","status":"published","modified_content":null},{"chapter_id":2,"order":15,"slug":"what-is-aave-crypto","title":"Aave: Crypto Lending Trailblazer","status":"published","modified_content":null},{"chapter_id":2,"order":16,"slug":"what-is-algorand-crypto","title":"Did Algorand Truly Solve the Blockchain Trilemma?","status":"published","modified_content":null},{"chapter_id":2,"order":17,"slug":"what-is-olympus-dao","title":"Does Olympus DAO Have Anything to Do With Mythology?","status":"published","modified_content":null},{"chapter_id":2,"order":18,"slug":"what-is-avax","title":"Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?","status":"published","modified_content":null},{"chapter_id":2,"order":19,"slug":"what-is-monero-coin","title":"Monero: Where Cryptocurrency Meets Cryptography","status":"published","modified_content":null},{"chapter_id":2,"order":20,"slug":"what-is-ripple-xrp","title":"Is Ripple \"it\" When it Comes to Cross-Border Transactions?","status":"published","modified_content":null},{"chapter_id":2,"order":21,"slug":"practical-use-of-cryptocurrencies","title":"The Practical Use of Crypto","status":"published","modified_content":null}]},{"id":3,"title":"Crypto Exchanges","slug":"crypto-exchanges","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-exchanges.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-exchanges-101.jpg","rating":80,"sections":[{"chapter_id":3,"order":1,"slug":"how-do-cryptocurrency-exchanges-work","title":"How do Cryptocurrency Exchanges Work?","status":"published","modified_content":null},{"chapter_id":3,"order":2,"slug":"dex-vs-cex","title":"DEX VS CEX: Two Sides of the Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":3,"order":3,"slug":"crypto-day-trading","title":"Crypto Day Trading: The Difference Between Buying, Trading, and Swapping","status":"published","modified_content":null},{"chapter_id":3,"order":4,"slug":"kyc-crypto","title":"KYC & AML: The Key to Complying With Legal Industry Standards","status":"published","modified_content":null},{"chapter_id":3,"order":5,"slug":"how-to-buy-crypto","title":"From Fiat to Crypto: How to Buy Crypto for the First Time","status":"published","modified_content":null},{"chapter_id":3,"order":6,"slug":"fiat-to-crypto","title":"Taking Profits: Turning Crypto Into Fiat","status":"published","modified_content":null},{"chapter_id":3,"order":7,"slug":"how-to-use-crypto","title":"You\u2019ve Got Crypto: What Can You Do With It?","status":"published","modified_content":null}]},{"id":4,"title":"Crypto Wallets","slug":"crypto-wallets","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-wallets.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-wallets-101.jpg","rating":80,"sections":[{"chapter_id":4,"order":1,"slug":"what-is-a-crypto-wallet","title":"What is a Crypto Wallet?","status":"published","modified_content":null},{"chapter_id":4,"order":2,"slug":"hot-wallet-vs-cold-wallet","title":"Hot Wallet VS Cold Wallet: Which One to Pick?","status":"published","modified_content":null},{"chapter_id":4,"order":3,"slug":"non-custodial-wallet","title":"What are Non-Custodial Crypto Wallets?","status":"published","modified_content":null},{"chapter_id":4,"order":4,"slug":"what-is-metamask","title":"Metamask: The Leading Non-Custodial Wallet","status":"published","modified_content":null},{"chapter_id":4,"order":37,"slug":"how-safe-is-cryptocurrency","title":"The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?","status":"published","modified_content":null}]},{"id":5,"title":"NFTs","slug":"nfts","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-nfts.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/nfts-101.jpg","rating":100,"sections":[{"chapter_id":5,"order":2,"slug":"how-to-trade-nfts","title":"NFT Trading: The Ins and Outs","status":"published","modified_content":null},{"chapter_id":5,"order":3,"slug":"buying-nft","title":"Tips and Tricks of Choosing the Right NFTs","status":"published","modified_content":null},{"chapter_id":5,"order":4,"slug":"how-to-store-nft","title":"How to Store NFTs: Best Practices","status":"published","modified_content":null},{"chapter_id":5,"order":5,"slug":"how-to-create-an-nft","title":"How to Create Your Own NFTs?","status":"published","modified_content":null},{"chapter_id":5,"order":6,"slug":"how-to-make-passive-money-with-nft","title":"Making Passive Money with NFTs","status":"published","modified_content":null}]},{"id":6,"title":"dApps & Defi","slug":"dapps-and-defi","updated":true,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-dapps.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/dapps-defi-101.jpg","rating":80,"sections":[{"chapter_id":6,"order":1,"slug":"what-are-nfts","title":"What are Non-Fungible Tokens (NFTs)?","status":"published","modified_content":null},{"chapter_id":6,"order":1,"slug":"what-is-defi","title":"What is Decentralized Finance (DeFi)?","status":"published","modified_content":null},{"chapter_id":6,"order":2,"slug":"what-is-defi-2-0","title":"DeFi 2.0: The New Version of Decentralized Finance","status":"published","modified_content":null},{"chapter_id":6,"order":3,"slug":"what-are-dapps-in-crypto","title":"What Are dApps and How Do They Work?","status":"published","modified_content":null},{"chapter_id":6,"order":4,"slug":"defi-dapps","title":"Picking the Right dApps: Dos and Don'ts","status":"published","modified_content":null},{"chapter_id":6,"order":5,"slug":"what-is-web-3-0","title":"Web 3.0: The Future of the Internet","status":"published","modified_content":null},{"chapter_id":6,"order":6,"slug":"what-are-smart-contracts","title":"What is the Core Purpose of Smart Contracts?","status":"published","modified_content":null},{"chapter_id":6,"order":7,"slug":"what-is-a-dao-in-crypto","title":"The Notion of a Decentralized Autonomous Ogranization (DAO)","status":"published","modified_content":null},{"chapter_id":6,"order":8,"slug":"what-is-staking-in-crypto","title":"What is the Goal of Staking Crypto Assets?","status":"published","modified_content":null},{"chapter_id":6,"order":9,"slug":"what-is-liquidity-pool-in-crypto","title":"What is a Liquidity Pool and How Does It Work?","status":"published","modified_content":null},{"chapter_id":6,"order":10,"slug":"what-is-automated-market-maker","title":"Automated Market Maker: the Cornerstone of the Decentralized Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":6,"order":11,"slug":"what-is-yield-farming-in-crypto","title":"The Main Yield Farming Techniques","status":"published","modified_content":null},{"chapter_id":6,"order":12,"slug":"what-is-an-oracle-in-crypto","title":"Crypto Oracles: The Link Between Blockchain and Outside World Data","status":"published","modified_content":null},{"chapter_id":6,"order":13,"slug":"crypto-gambling","title":"The Peculiarities of Decentralized Crypto Gambling","status":"published","modified_content":null},{"chapter_id":6,"order":14,"slug":"what-is-the-metaverse","title":"Metaverse: A New Perception of Reality","status":"published","modified_content":null}]},{"id":7,"title":"Trading & Investing","slug":"trading-and-investing","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-trading.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-trading-101.jpg","rating":80,"sections":[{"chapter_id":7,"order":1,"slug":"where-to-trade-crypto","title":"Where Can You Trade Cryptocurrencies?","status":"published","modified_content":null},{"chapter_id":7,"order":2,"slug":"how-to-invest-in-crypto","title":"Investing in Crypto: What Investing Options Do You Have?","status":"published","modified_content":null},{"chapter_id":7,"order":3,"slug":"ico-vs-ido","title":"ICO vs IDO vs IEO: Which One is the One?","status":"published","modified_content":null},{"chapter_id":7,"order":4,"slug":"what-is-an-airdrop","title":"What are Crypto Airdrops and How to Get Them?","status":"published","modified_content":null},{"chapter_id":7,"order":5,"slug":"how-to-get-free-crypto","title":"How to Get Free Crypto Assets?","status":"published","modified_content":null},{"chapter_id":7,"order":6,"slug":"how-to-arbitrage-crypto","title":"What is Crypto Arbitrage: The Main Principles","status":"published","modified_content":null},{"chapter_id":7,"order":7,"slug":"what-is-a-perpetual-contract","title":"Perpetual Contracts: Futures Contracts Without an Expiration Date","status":"published","modified_content":null},{"chapter_id":7,"order":8,"slug":"what-is-fud","title":"What is FUD: How to Use It to Your Advantage While Investing in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":9,"slug":"investing-in-cryptocurrency","title":"Investing in Cryptocurrency: How to Manage Your Risks?","status":"published","modified_content":null},{"chapter_id":7,"order":10,"slug":"what-is-a-rug-pull-in-crypto","title":"What is a Rug Pull in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":11,"slug":"how-to-avoid-rug-pulls-in-crypto","title":"How to Spot and Avoid Rug Pulls?","status":"published","modified_content":null},{"chapter_id":7,"order":12,"slug":"how-to-avoid-crypto-taxes","title":"The Key Legal Techniques of Avoiding Crypto Taxes","status":"published","modified_content":null}]},{"id":8,"title":"Crypto Analysis","slug":"crypto-analysis","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-analysis.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-analysis-101.jpg","rating":100,"sections":[{"chapter_id":8,"order":1,"slug":"what-is-bullish-and-bearish","title":"Bearish and Bullish Markets: Do They Matter?","status":"published","modified_content":null},{"chapter_id":8,"order":2,"slug":"best-technical-analysis-indicators-for-crypto","title":"5 Best Crypto Technical Analysis Indicators You Must Know About","status":"published","modified_content":null},{"chapter_id":8,"order":3,"slug":"what-is-candlesticks","title":"Technical Analysis: What are Candlesticks, Trendlines, and Patterns?","status":"published","modified_content":null},{"chapter_id":8,"order":4,"slug":"how-to-track-new-crypto-coins","title":"Crypto Tracking: How to Track Your Favorite Coins & Tokens?","status":"published","modified_content":null},{"chapter_id":8,"order":5,"slug":"how-to-research-crypto","title":"Crypto Research Fundamentals & Social Signals: Your Daily Trading Strategy","status":"published","modified_content":null},{"chapter_id":8,"order":46,"slug":"portfolio-diversification-definition","title":"Portfolio Diversification: The Whats, the Whys, and the Hows","status":"published","modified_content":null}]},{"id":9,"title":"Mining","slug":"mining","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-mining.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-mining-101.jpg","rating":80,"sections":[{"chapter_id":9,"order":1,"slug":"what-is-crypto-mining","title":"Crypto Mining: What It is and How Does It Work?","status":"published","modified_content":null},{"chapter_id":9,"order":2,"slug":"what-is-a-mining-pool","title":"Mining Pools: Is Collective Mining Better Than Solo Mining?","status":"published","modified_content":null},{"chapter_id":9,"order":3,"slug":"what-is-staking-crypto","title":"An Advanced Look into What is Staking Crypto","status":"published","modified_content":null},{"chapter_id":9,"order":4,"slug":"what-is-proof-of-stake-vs-proof-of-work","title":"Proof-of-Work VS Proof-of-Stake: The Differences That Matter","status":"published","modified_content":null},{"chapter_id":9,"order":5,"slug":"what-is-crypto-mining-rig","title":"Crypto Mining Rig: What It is and How to Build One?","status":"published","modified_content":null}]},{"id":10,"title":"Crypto Terms","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/crypto-101-glossary.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-glossary-101.jpg","rating":100,"sections":["A","B","C","D","E","F","G","H","I","J","K","L","M","N","O","P","Q","R","S","T","U","V","W","X","Y","Z"]}]"
current-chapter="trading-and-investing"
current-section="what-is-fud">