Runaway Fear and Bitcoin
Fear. Uncertainty. Doubt. FUD. Recently the news cycle relating to bitcoin and all cryptocurrencies has been riddled with FUD. An alarming trend is happening, especially as it relates to the market response and panic selling, and it invloves extreme overreaction and even creating false narratives when in reality, the story is much different and shouldn't induce the panic that is happening with each headline.
Caution Not Crackdown
A good portion of the panic selling has been influenced by various governments or businesses publicly declaring that they will be putting resource focus on their cryptocurrency monitoring or handling. It seemed to start recently with fears that South Korea would be banning any and all cryptocurrency exchanges.
In mid January, Coindesk and many other outlets were posting variations of the following headline:
Crackdown is a very loaded word and is used often when describing governments looking into bitcoin and cryptocurrency further. However, as was the case in South Korea, it doesn't mean a ban or extreme government enforcement is happening. The reality is usually, a government like South Korea, is simply looking to enforce laws around taxing and illegal activity, not regulating cryptocurrency or shutting down exchanges.
There were even more egregious examples of 'reputable' news sources spreading fictional FUD like this headline from Reuters.
This is an especially reckless headline because no government entity can ban cryptocurrency. That violates one of the core tenets of cryto being decentralized and not owned by any single entity.
The truth, as it's been revealed in the last couple days, is that South Korea has no intention to ban cryptocurrencies and has admitted that they couldn't even if they wanted to.
As the Reuters headlines show, there will continue to be an influx of false headlines and misinformation about bitcoin and cryptocurrency. In fact, since the South Korea news was cleared up, there has already been a new cycle of FUD being shared today with India's finance minister declaring the same goal of trying to eliminate illegal funding activity.
There's that nebulous word again - crackdown. And already the markets are overreacting with a selloff in early hours of trading this morning. But inevitably, the correction or clarification will be coming out in a week or two, with much less fanfare, that India is not looking to ban crypto, rather just control the funding of illegal activities.
Ignore the Runaway FUD
As these headlines continue to emerge, keep in mind two things. Number one, loaded words like 'Ban' and 'Crackdown' will be used to get clicks because that's the job of these reporters. But they are just that - clickbait, and never resemble the truth. Number two, and most importantly, bitcoin and other cryptocurrencies can not be banned by any government or organization.
Cryptocurrencies are not owned, governed, regulated or controlled as they are by nature decentralized. And because they pose such a significant threat to the established financial order, sensational headlines and fear tactics will continue to emerge. Tune it out, and remember that this is a necessary step in the evolution of cryptocurrencies.