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FOMO and FUD

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Fomo and FUD

What you can expect to learn?

  • FOMO and FUD Test
  • What is FUD, FOMO and factors causing them
  • Strategies to tackle FOMO and FUD 

Before we begin the article, let’s do something fun. It will take less than a minute. Give a shot at this quick FUD/FOMO test and see how you score.

Fomo Fud Calculator

There are two arch enemies in life in general and trading in particular, and more so specifically in crypto trading life:  Fear of Missing Out (FOMO) and Fear, Uncertainty, Doubt (FUD).

What is FOMO?

When we think that the train is going to leave the station and try to jump on it at any cost, that is parallel to acting out of Fear of Missing Out (FOMO).  

We forget, temporarily, that there are more trains to catch and that the market is here in the long run.

When you fall for the hype and do not follow the facts, like this guy that Jordan Belfort is seen conning in Wolf of Wall Streets.

What is FUD?

When we let negativity and false information drive us out of the market or keep away from good opportunities, we are facing Fear Uncertainty and Doubt (FUD).

A real life example could be, letting some false information blind us completely from reality and lead us to make irrational decisions.

For instance, this gentleman who is reacting to a VR immersion to a totally false reality.

Difference between FOMO and FUD

Crypto trading, for that matter any trading, is a zero sum game.

What that means is, for you to win, someone has to lose.  For you to sell at a profit, someone has to be willing to buy at a higher price.

Is FOMO and FUD bad?

Not all situations of FOMO or FUD bad when they are backed by a process.

For instance, when Chainlink dropped to $1.8 we jumped on the opportunity to buy a few.  At this point, Chainlink was already 600% from its initial listing price a year back.

Because we had done our research and have established our target entry points, buying into an asset that is already 600% high was not a bad decision.

Similarly, when you get disillusioned through research and new information that the project you thought was going to the moon is actually a piece of scrap, it is ok to FUD out.

As long as we keep our rational hats, FOMO and FUD can help us make timely decisions.

What causes FUD and FOMO?

Following blindly

When you choose to simply follow someone’s advice without validating the facts just because someone said it, then you become a victim of FOMO or FUD, depending on what is fed to you.

For instance, take the News channels.  In this day and age, they are mere propaganda promoters.

Many people either are clutched by fear or act carelessly based on what is fed to them.

If these channels say that the market is heading for a crash, people following these sources will take hasty decisions.

When they report something rosy – market responds by going euphoric, irrespective of facts.

This is exactly what we are witnessing today with COVID crippling the economy while the stock market is rallying to new heights each day.

Greed

FOMODuring the 2017 crypto bull run, some people who made millions of dollars couldn’t exit the market because they thought they could time the market.

So they kept playing and lost their gains and in some cases capital to the crash.

Greed generally makes people make irrational decisions that ultimately lead to their own peril. 

Lack of research

Who wants to read a boring 30 page whitepaper when you could let a YouTube influencer give you his opinions?

This convenience has resulted in relying on influencers without understanding the underlying intentions.

Do you know if the influencer has any conflict of interest?

Are you getting an unbiased view of facts or are you just getting biased opinions?

Lack of research is one of the biggest reasons why people are forced into making irrational decisions.

Sensation for facts

In the world that floods us with millions of bytes of information, the one that grabs your attention wins. 

In this race for attention, we have become victims of ‘clickbait’ headlines.

I have read in some forums that people have executed a wrong trade by just reading a clickbait headline only to realize that the actual news was not as rosy or dire.

In the online world of stimulation, sensation sells.

Unfortunately, we cannot make investment decisions based on sensation.

Investment is mostly a boring activity.  It involves reading a lot of dry sources, following through on due diligence, carrying out research, executing decisions and being patient for the right time.

How to tackle FUD & FOMO?

Curiously, the tools to tackle FUD and FOMO are the same, that means, you tackle one and you tackle the other.

Using FOMO and FUD against one another

When you are faced with FOMO, go out and seek negative information on the project that has you in the FOMO grips.  

Create deliberate FUD for yourself.

If you are suffocated by the clutches of FUD, then remind yourself why you were interested in the project in the first place.  

Has anything changed about the project that got you interested in the first place?  

If yes, then you have to simply take the next logical action.  If nothing changed, you can motivate yourself by seeking FOMO angle.

This strategy will help you remain sane while the market goes nuts.

Breath

I am not going all spiritual on you but trust me when I say this helps.

When you are running after or away from something you take short breaths, this is a good indication that you are going to make some hasty decision.

When you are faced with a FUD or FOMO situation: BREATH. 

Consume the information without reacting.  To stay rational, practice conscious breathing and then put your head down to ‘dig for the facts’ before you take the decision.

Research

There are over 6000 projects in the market.  You cannot learn about every project fully.

However, you can learn about a few projects as fully as you can.  This research will help you gain insights that will help you to make the right decisions.

Fundamentals

Technology has changed but us humans have remained the same blob of biology. 

Human nature, gravity, north pole, south pole, have remained unchanged.  

Similarly, the fundamentals of a good project are the same whether you are looking at  a company in the crypto space or traditional space.

Look for these solid fundamentals. If your project has these fundamentals – then the temporary ups and downs should not bother you. 

This will help you sleep better at night.

Beware of confirmation bias

We usually seek out what we want to validate.

Read that again.

We as creatures of habit want to reduce the world to fit our view.  

This is particularly true about our investments.  It is important to consciously seek out contrarian views that of yours.

This will help you gain greater perspective and make all round decisions.

Follow the money

More often than not, mainstream media will be saying one thing and the big money is doing something else entirely.  

Even if the news of FOMO or FUD is true, it is usually an ‘after-the-fact’. 

No one will actually let you in on the secret before they place their bets.  

For instance, someone will talk about how this startup is going to change the world AFTER that company has already gone public.  

This means, the VCs are ready to dump their stocks onto unassuming noobs while they 1000x their seed investment.  

A classic example of this in the crypto space is when JP Morgan publicly condemned Bitcoin and threatened to fire anyone at the firm who buys bitcoin.

Secretly, JP Morgan was buying boat loads of Bitcoin and shortly they even introduced their own cryptocurrency.

In this short video Teeka Tiwari reveals all the hypocrisy of these big players who manipulate the market into FUD and FOMO depending on what benefits their deep pockets.

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

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IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

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Crypto News

Crypto News Today #48

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breaking crypto news

Crypto News

The US Stock market took a nosedive when the markets closed on Friday as the US went for a long labor day weekend.

Bitcoin mirrored the plunge by losing 17% of its value to land on low $10,000.  

While Bitcoin maximalists (and some technical analysts) say this is the last chance to get Bitcoin under $10,000, many others have sound alarm pointing bearish winds ahead.

Who will prove right?  

Well, we will leave that to the time to decide while we dive into the exciting developments in the crypto and blockchain space. 

Token Launch Platform coming to Coinbase

coinbase best exchangeFuture may be one of launching tokens, instead of stocks, on crypto exchanges.  ICOs, IEOs and STOs, all have occupied the crypto space but they all lack the brand power that could lure the big brands to take the bite.  Coinbase, one of the most popular crypto exchanges in the US, may soon launch Token Launch Platform.  Brian Armstrong, CEO of Coinbase, confirmed: “We’re working on a product, we’ll probably call it Coinbase Launch or something like that,” said Armstrong, “but it’s a way for anybody who wants to do a crypto startup to come in and say, ‘All right, I want to issue a token. Maybe I want to raise money. Maybe I just want to use it to build my community.’”

Congress asks IRS for sensible tax policy for Proof of Stake

“It is important that tax policy does not indirectly dissuade U.S taxpayers from participating in this promising new technology,” read the letter sent by Congress to the IRS.  While Bitcoin remains a Proof-of-Work protocol, more and more projects are turning to Proof of Stake protocol in which users can lock their tokens to earn tokens, like dividends for holding stocks.  This process of holding the tokens in a method specified by the token ecosystem is called staking.  Many industry experts expect that staking will attract a lot of investors to the crypto with some staking protocols yielding as much as double digit percentages.  

Chainlink oracles come to Bitcoin through RSK

Chainlink logoBitcoin may soon be benefiting from the massive connectivity boost as Chainlink is now integrated onto Bitcoin sidechain using RSK interface.  The launch that is expected to take less than a month will bring the smart contracts, connectivity with real world businesses to the world’s strongest blockchain network.  Bitcoin, while still remains to be the king of cryptos, has lacked smart contract capabilities which RSK has brought about, now that effort is getting a boost with Chainlink integration.

Leading Stock Exchanges in Switzerland, Germany, Austria Now List Bitcoin ETP

Zug based 21Shares announced that Bitcoin Exchange-Traded Product (ETP) is getting listed on 3 major exchanges in Switzerland, Germany and Austria.  “The 21Shares Short Bitcoin ETP (Ticker: SBTC) seeks to provide a -1x return to the performance of bitcoin for a single day. This product obtains short exposure through borrowing bitcoin and simultaneously selling it on an execution platform,” the company explained on its website. “SBTC is an innovative financial instrument that allows investors to gain exposure to the negative price movement of bitcoin,” the announcement clarified.

Swiss Insurance company now accepts bitcoin and crypto payments

Atupri Health Insurance became the first insurer to accept Bitcoin and crypto for payments.  “Our range is characterized by a high degree of customization. Our customers are free to choose which payment method they choose at any time. As digital pioneers in the health sector, we anticipate social trends and offer insurance solutions with long-term prospects. Blockchain technology and the associated use of cryptocurrencies will become increasingly important. Accordingly, we want to offer the necessary structures for our policyholders,” said Caroline Meli, Head of Marketing and Sales at Atupri.

Thank you for reading and sharing this article. We appreciate you.

We have been tracking the most important news in blockchain and crypto space since 2017. You can check out all the chronicled news here.  

Consider subscribing to our newsletters to receive these news updates in ONE neat email per week along with other freebies that we give away once-in-a-while.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

 

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

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Crypto News

Crypto News Today #47

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Crypto News

Is the US losing the race of Central Bank Digital Currency to China?  

We personally believe that it’s not just the first mover advantage that matters when you aspire to be the global reserve currency.

We trust the US (even with its own flaws and bureaucracy) more than China.

Why is that trust factor important now?  

Because, it seems a race is underway right in front of the oblivious world.  A race to dominate the digital currency space.  China is enjoying the ‘early adopter’ status now, but the US is not too far behind as it ramps up its plans to launch its own CBDC.

IRS Memo clarifies that virtual currency received in microtasks is taxable

IRS memo 202035011 clarified that the virtual currency received for performing microtasks is considered taxable. The question posed to the IRS “Is convertible virtual currency received by an individual for performing a microtask through a crowdsourcing or similar platform taxable income?” was referenced and the conclusion was arrived stating that “Yes, a taxpayer who receives convertible virtual currency in exchange for performing a microtask through a crowdsourcing platform has received consideration in exchange for performing a service, and the convertible virtual currency received is taxable as ordinary income.”

Chinese bank disables digital asset wallet due to attention

There is such a thing called too much attention.  Chinese Commercial Bank (CCB), one of the four major banks in China, had a silent launch of its digital asset wallet on their official CCB app.  However, the crypto community got the wind of this capability; the news spread like a wild-fire and CCB disabled the feature to avoid too much attention to the matter, which seems like a moot point now as the news has become a sensation. “The brief availability of the wallet shows the Chinese commercial bank has been working towards adoption for the digital yuan initiative, also known as DCEP, which is led by the Peoples’ Bank of China (PBoC),” read the news.

Chainlink acquires DECO from Cornell University

Chainlink logoIn a press release, Chainlink announced that they have acquired a new technology to bring HTTPS/TLS data security capabilities to Chainlink.  “By extending the data security capabilities of HTTPS and TLS, the most widely formats for transmitting all internet data, DECO is able to guarantee that data remains private and untampered with during its delivery from various private and premium data sources. It does so by employing advanced cryptography and zero-knowledge proofs from any server using HTTPS/TLS, without revealing that data to the outside world or even to the final computation using the data. DECO creates a new method of providing private and premium data across the internet, while maintaining its confidentiality and security at previously unachievable levels,” press release informed.

Another company moves to Bitcoin as reserve

Founder of Snappa, Christopher Gimmer, wrote an extensive thesis on why he believes Bitcoin to be better money and hedge against failing fiat. He announced that his company is moving to Bitcoin as ‘reserve’ currency.  This is in the wake of MicroStrategy moving $250 Million cash to Bitcoin as reserve.

Cardano & Bidali to bring crypto to retail

cardano staking newsBidali, a payments processing company that is bridging the gap between traditional payment systems with digital currencies has partnered with Emurgo to bring Cardano to retail payments. In a press release, Emurgo announced that “it has entered into a strategic partnership with Bidali. The partnership enables ADA holders to directly purchase items from more than 1,200 major retail brands, such as Amazon, Nike, Starbucks, Airbnb, and many more via Bidali’s online gift card platform.”

Thank you for reading and sharing this article. We appreciate you.

We have been tracking the most important news in blockchain and crypto space since 2017. You can check out all the chronicled news here.  

Consider subscribing to our newsletters to receive these news updates in ONE neat email per week along with other freebies that we give away once-in-a-while.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

 

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Crypto News

Crypto News Today #46

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Welcome to the ICO craze (read scam) of 2020, it goes by a different name called DeFi.  

No, we are not saying DeFi is a scam, we are saying that there are a lot of scams going in the name of DeFi.

Top 5 Cryptocurrencies 2020

We wrote an article on people getting Yammed and it went bonkers on Reddit – do check it out. It is a stark reminder for the crypto community on how the FOMO exploiters take new forms.

We thought that reminder is worth repeating before we got on with our news.

International Monetary Fund (IMF) explains cryptocurrency

There are risks of using cryptocurrencies and it’s quite volatile BUT if we can mitigate those risks, this could be the change the way we transact…that was the core message of the video posted by the IMF explaining cryptocurrencies.  Every crypto enthusiast should watch this short video to see how the ‘rhetoric’ is changing from ‘cryptos are for the crooks’ to ‘cryptos could change the way we transact’.

River Financial brings Bitcoin to Hawaii

Hawaii has been on the sidelines for Bitcoiners, but no more.  River Financial announced that it has become the first digital assets company to participate in Hawaii’s state sponsored sandbox.  Company issued a statement: “We are incredibly excited to bring the best of Bitcoin to the residents of Hawaii, many of whom have long awaited this day. River Financial’s participation in the DCIL regulatory sandbox program will play a crucial role in shaping the State’s long-term regulatory framework for digital assets.”  ‘River Financial is the first regulated financial institution to legally provide cryptocurrency services to Hawaiian residents.’

Citi and Consensys use blockchain to Commodity trading

End-to-end blockchain solutions to commodities trade financing is becoming a reality because of komgo (an initiative by Consensys).  Citi, one of its members, shared the way komgo is shaping the future of commodity trading and how blockchain is solving issues that used to take weeks into mere hours.  One of the quotes shows the power of Blockchain: “reduced the time to issue a digital letter of credit from an average of 10 days to 1 hour.”

IRS brings digital currency question to the front page

On the 2019 US tax returns, the IRS asked a question about digital currencies in one of the schedules.  It was quite unassuming but it was there.  On the 2020 US tax returns, the IRS is bringing the same question to page 1 so that people know how serious the IRS is about the whole issue.  In a draft Form 1040 released by the IRS, the question about digital currencies stares at the taxpayers on the front page.

Form 1040 US Tax

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Fidelity backed BC Group gets Tentative Licensure Approval in Hong Kong

Fidelity backed BC Group’s OSL Exchange got a tentative license in Hong Kong to offer digital asset trading services.  According to Reuters, “Hong Kong’s markets regulator has agreed in principle to issue a license to cryptocurrency firm OSL Digital Securities, a unit of Fidelity-backed BC group, the company said in an exchange filing on Friday.

China’s Blockchain Service Network could use Stablecoins

Blockchian Service Network (BSN) stated in a tweet that it will never issue a cryptocurrency of its own or be associated with a crypto project, however, there is a possibility that it will make use of stablecoins on its network.  We surmise that this will be Digital Yuan and not other currencies like Digital dollar.

The dialogue around the blockchain and cryptocurrencies is changing from that of ‘anti-social’ to ‘society changing’ and we are witnessing it in real time.

You can see the news chronicles from 2017 to now to see how we have come through ups and downs.  It’s all in one place (and free) for you to relive the most important news in the crypto space.

Thank you for reading and sharing this article. We appreciate you.

We have been tracking the most important news in blockchain and crypto space since 2017. You can check out all the chronicled news here.  

Consider subscribing to our newsletters to receive these news updates in ONE neat email per week along with other freebies that we give away once-in-a-while.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

best Crypto Tax Software

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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