Why Can Rumors Be Fatal For New Projects? A Deep Dive Into Investors’ Psychology

Crypto markets are undergoing a severe lack of investors’ trust and streamlined liquidity flow due to recent developments. This poor performance of the cryptocurrency market is commonly referred to as crypto winter and can last for a specific period of time before the market returns to its routine value. 

Crypto winters can be disastrous for new blockchain startups as new funding almost freezes with investors moving away from the ecosystem. Due to this reason, it becomes extremely hard for blockchain startups to survive the crypto winter.

Due to the high uncertainty in the market, every project has to undergo a tough time, creating the perfect conditions for rumors to spread around. In this CoinGabbar blog, we will cover the impacts of rumors on the crypto space and understand how it can be fatal for new projects trying to survive in this crypto winter. 

Increasing Rumours Amidst This Crypto Winter

As the cryptocurrency industry has grown to become a leading pillar of decentralized finance, the media around it has also prospered at a rapid pace. Every piece of information in the crypto domain spreads like wildfire because of the highly active community and the great interest of news agencies in the crypto market. The news mechanism has developed to be so swift that even rumors are entertained wildly by the community. 

Even at the slightest hints of any mishappening and the blockchain experts draw whole stories themselves, creating a panic situation across the crypto space. Cryptocurrencies are relatively new and thus market volatility is a serious issue that makes sensational headlines. Every new development comes with the hope that it will pump the market or the fear that it will push the market down. The reliance of cryptocurrency markets on the sentiment of social media users becomes another important reason for the media to be so effective in cryptocurrency markets. 

From one to another, we witnessed a series of events that were highly influenced by speculations and rumors. Most of them were nothing but short-lived rumors but some of them turned out to be true and became the reason for sizeable market endeavors. 

What is FUD? Why Should Be You Beware of it?

FUD or Fear, Uncertainty, and Doubt are one of the most critical aspects that drive the market based on the sentiment of the investors. This is also a tactic used by marketers effectively to create a sense of panic in the space and pace up the decision-making of their target audience without asking for too much information about the product. 

This is the case with market rumors as well. Rumors incite fear, uncertainty, and doubt in the mind of the stakeholders and force them to take a decision in their own interest. The panic created by FUD is so grand at times that users do not feel the need to verify if the information is coming from a reliable source. As a result of which a lot of users move towards either buying a commodity without analyzing the fundamentals of the project. The fear of missing out on the market swings triggers massive rallies. 

On the other hand, the fear of losing your funds because of the rumors about the projects compels users to withdraw their investments and shift to safer investment options such as Bitcoin or ETH. All of these are the consequences of a lack of investor research and a deficiency of reliable news-sharing platforms in the crypto space.

CoinGabbar is building the world’s most trustable content on blockchain tech and related technologies. We are ensuring that customers get access to all the research tools in one place for DYOR (Do Your Own Research).

Things to Keep in Mind

Avoiding rumors while investing in cryptocurrencies is one of the biggest challenges that you could face in the market. Here is a list of the things that you should always keep in mind to keep yourself safe from market rumors and always take the right decision. 

• Whenever you hear about any market speculations, do not act immediately. Take your time and verify through multiple credible sources if the information that came to you is correct.

• Always do your own research and do not rely on any third party or community to influence your decision. 

• If you are someone who takes impulsive decisions, cryptocurrency investments might not be the best option for you.

• Before making any investment decision, go through the fundamentals of the projects, e.g the people backing up the project, the value proposition of the product, marketing tactics, team strength, and the past history of the founders.

• If you are not sure about the credibility of the project but still want to invest to gain extra returns, invest only what you can afford to lose. 

• Moving your crypto assets to a secured cold wallet is always a good practice that will help you to reduce the stress related to your exchange or hot wallet. If you are in crypto for long-term investments, we advise you to go for a hard wallet. 

Conclusion

Cryptocurrencies are highly volatile and even the slightest of insider information can move the markets by significant margins. Information has become a tool for crypto investors to predict upcoming market updates. The bright side of information comes with the dark side of fake news, propaganda, and rumors. However, the crypto community has to keep in mind that all the information available on the internet is not 100% accurate. 

We have to filter out the right and wrong information by doing our own research and crowdfunding the news portals so that they do not have to rely on crypto capitalists for their funding. 

CoinGabbar is one such platform that provides crypto information with reliable and unbiased information. We ensure that our readers get the best of the crypto news and information in an interactive and easy-to-digest manner. If you are someone who wants to overcome the rumors, follow CoinGabbar and become part of the most trustworthy global crypto community.