I have been observing the market continuously and recently discovered a very interesting phenomenon: many investors are repeatedly falling into the same psychological trap without realizing it. This trap is FUD — a combination of fear, uncertainty, and doubt.

Speaking of FUD, it exists in both the crypto market and traditional finance, but many people cannot tell the difference. Simply put, FUD is when influential figures express dissenting opinions, planting fear and doubt in investors' minds. The result is a bunch of people following the trend and selling off assets, only to regret it afterward. This phenomenon is also common in the stock market, for example, in 2021 when a tech giant's stock plummeted due to regulatory rumors, investors panicked and sold, only for the company to later announce full compliance and the stock rebounded. Those who sold at the bottom became the real bagholders.

I’ve noticed that USDT is often plagued by FUD. Every time Tether issues a large amount of USDT, the community begins to doubt whether they have enough reserves. Moreover, there are rumors that Tether holds high-risk assets, including China Evergrande, which further fuels concerns — what if these assets depreciate? Can they quickly liquidate to pay USDT holders? This is a typical case of FUD fermenting.

Interestingly, FUD and FOMO seem opposite but are actually both psychological traps for investors. The difference is: FUD comes from market whales, KOLs, or celebrities spreading panic information, causing retail investors to sell; FOMO is when retail investors see others making money and rush to buy at the top. Both outcomes are bad — one leads to selling at a low, the other to buying at a high. These mindsets are especially easy to influence inexperienced investors. The same applies in stocks — retail investors often sell at the bottom due to FUD and buy at the top due to FOMO.

So, how to deal with FUD? My experience is that first, you need to have long-term conviction. For example, if you truly believe Bitcoin will become part of the global asset allocation, short-term negative news is insignificant. Second, develop the habit of verifying information. Not all news is FUD; you need to cross-check from official channels and reputable media. The key is to have a clear investment strategy and stick to it, such as dollar-cost averaging (DCA). When FUD hits, it can actually be an opportunity to buy at lower prices.

I also want to emphasize that FUD is indeed exploited by malicious actors to manipulate the market. The Bitcoin spot ETF blunder at the end of 2023 is an example — a major media outlet mistakenly reported SEC approval, causing Bitcoin to spike to $30k, and over $100 million in short positions were forcibly liquidated. Although it was later corrected, it might have been a test of market reaction. Similar manipulations exist in stocks, with real estate rumors and commodity supply panic being common FUD tactics.

To truly overcome FUD, I recommend maintaining diversified information sources and obtaining knowledge from credible outlets. Set clear investment goals and stop-loss points so that even during market volatility, you can stay rational. Reduce exposure to panic-inducing platforms and practice emotional management. Most importantly, do not overly rely on others’ opinions; keep learning and reviewing your own decisions. Only then can you stay more clear-headed amid the dual pressures of FUD and FOMO.