IOTA’s recent meteoric rise from 50 cents to $5.5, and its steep decline from $5.5 to $3.8 serves as an interesting case study for how the FOMO-FUD cycles are being used in cryptospace. FOMO is an abbreviation form of “Fear of missing out”, and is triggered whenever inexperienced investors see a certain crypto going bullishly off the charts (ie. its price spiking up). This causes a cascading effect where emotional investors jump onto the surging train in order to reap the profits from this particular rally. FUD, on the other hand, is Fear-Uncertainty-Doubt. This is employed to trigger a bear trend on a certain cryptocurrency, often in the forms of negative press, foul rumors, and publications of “bugs” found within said crypto’s codes. Bad news leads to devaluation of the crypto in question.
IOTA’s fall from its $5.5 ATH traced its origin back to this tweet by Kyle Samani pointing out a critical flaw of IOTA’s tangle network previously discovered by MIT students. To finish this jab-hook combo, another article from Squawker alarms readers of IOTA’s falsifying its list of partnerships. This Squawker article, named Proof: IOTA’s Partnership with Big Tech Not Real, claims that IOTA developers have falsified evidence regarding the participation of tech giants such as Microsoft and Cisco.
“Everyone is excited over the promise of what these partnerships may bring to IOTA and data decentralization overall. The only problem is, several of these partnerships are not real.”
This is an entirely false claim. Microsoft blockchain specialist, Omar Naik tweeted: “We (Microsoft) are excited to partner with IOTA foundation and proud to be associated with its new data marketplace initiative.”
This FUD train did not stop there. LTC-founder Charlie Lee chimed in on the issue, tweeting “The Microsoft partnership is fake?” and going so far as to claim IOTA devs paid Microsoft for its endorsement.
This cast a shadow on IOTA’s freshly launched Marketplace, where companies all over the world can trade B2B data with the use of the cryptocurrency iota itself.
What do IOTA founders have to say?
Dominik Schiener published a short article on IOTA Blog to address the issue directly. He clarifies certain misunderstanding regarding the participation of 35, soon to be 40, companies on IOTA’s Marketplace.
“It’s important to note that we do not have a formal partnership with any of these companies.”
Schiner claims that all “of the companies on the website have explicitly agreed to publicly participate in the data marketplace as participants.” No other commitment was required.
These recent FUDs have no doubt caused damage to IOTA’s name. It is important to remember that given the extreme volatility of the cryptospace, miscommunication like these can cost companies and devs greatly. IOTA is not the first, nor will it be the last crypto to fall victim to the FOMO-FUD cycle. As crypto investors, we here at Csnews would like to urge you to exercise caution and do your research properly, lest you become another victim of inferior motives.