FOMO, FUD, HODL, BTFD.

Abbreviations are used in many sectors. In the Dutch tax law, for example, the following abbreviations are used: VPB (corporate income tax), IB (personal income tax), PPT (principal purpose test), MBT (main benefit test), etc. Abbreviations are also used in the crypto world. The best known abbreviations are: FOMO, FUD, HODL and BTFD. What do these stand for?

FOMO

What exactly does FOMO stand for? FOMO stands for ''Fear Of Missing Out''. It means that you are afraid to miss the boat or that you are afraid that a great opportunity will pass you by. This fear - FOMO - actually causes you to get stressed out and make wrong decisions or not to make decisions.

A good example of when people suffered from FOMO was at the end of 2017. The bitcoin price broke new records every few days and rose to an all-time high. It looked like it would rise even further. Some claimed that the price could reach 100,000 Dollars. People saw on social media that people became incredibly rich from buying and trading crypto. So people were afraid that if they did not invest in bitcoin now, they would be the only one missing the opportunity. Because they did not want to miss the boat, they bought bitcoin without thinking about what bitcoin is, how a wallet works etc. They bought crypto out of fear. That was the starting point. They were afraid that there would never be another opportunity, so they had to act fast. 

FOMO causes you to make bad decisions.

How to tackle FOMO

In order to understand how to control FOMO, I will briefly explain how exactly this emotional state works. FOMO is not an unknown concept. This term is often used in psychology. A good example is that someone is afraid to miss a party. That person actually does not want to go: they are tired, for example, or they do not feel like going. This person will still attend the party because the person is afraid of missing out on something where all of his friends will be. If the person does not go, there is a great fear of falling out of the group. After all, he can no longer talk about the party. This principle can also apply to investing in crypto. If you are afraid of missing the boat - because the price shoots up, then the trick is to remain calm and rational. They sometimes say that you should exclude emotion when investing in crypto. By excluding emotion and focusing purely on the rational, FOMO will be less prevalent. If you plan to invest in a crypto currency, take the time to find out what this currency is and if you see a future in it. If so, then at least you are investing without emotion.

FUD

In the crypto world, the term FUD is often used. FUD stands for ''Fear, Uncertainty and Doubt''. FUD involves a feeling being stirred up by others so that your decisions are influenced. For example, a person can spread FUD about a certain cryptocurrency so that people should or should not invest in this cryptocurrency.

Suppose you want to buy a coin, but you think the price is too high. You want to buy this coin for a much lower price. To lower this price, you spread fake messages about this coin. You write bad things about the coin. By spreading fake news, you try to make people feel fear, insecurity and doubt, while this information is not correct at all. Because of FUD, people will sell this coin because they think it is worthless. Because people sell the coin, the price goes down and you can buy at a lower price. But if you have obtained this coin, then you also want this currency to increase in value. What you could do is spread fake messages that only spreads positive news about this coin. You can also create fake messages about a competitor. Here you can spread information that your crypto currency is much better than the competitor. Through these fake messages, people will invest or sell your currency due to fear, uncertainty and doubt. Your crypto currency could increase in value, purely because you have created a feeling. In this way you have influenced others. The more FUD is spread, the greater the influence on investors to invest in your crypto. Influencers are almost always used to lead FUD campaigns. Influencers or well-known people who have a large audience could succeed in a FUD campaign.

How to mitigate FUD?

What you can do to avoid FUD is to never sell crypto out of fear. Of course, this is not that simple. After all, we are human beings and emotions are part of it. Therefore, it is very important that you do proper research about the crypto that you want to invest in. Make sure you know who is running the project, if there is a white paper where the team explains the project, etc. This will increase your confidence in the project and the crypto. Do not immediately believe what other people say. There is always a reason why people say what they say. It is often motivated by self-interest.

HODL

HODL is not an existing word in English. HODL is a typo of the word HOLD and means to hold a particular cryptocurrency. This means that the person holding the crypto has no intention of selling it in the short term. The crypto is often held for several years. HODL now means 'Hold On For Dear Life' which was invented later. HODL entered the world in 2013, when a user posted a message on a forum in a drunken state. He (or she) wrote in a forum post 'I AM HODLING'. The user who posted this message is called GameKyuubi.
What GameKyuubi says in his post is that he (or she) is bad at trading and suffers from FUD and FOMO. He always buys and sells at the wrong time. In that situation, it is better to keep the crypto for the long term. Crypto trading with large amounts of money creates a lot of financial risk, but it also has a psychological and mental impact.