What might be most perplexing about the FOMO-FUD cycle in the cryptocurrency community is that when it has subsided, what remains is a sea of conflicting information on both ends of the spectrum, making it almost impossible to discern fact from fiction. For example, IOTA founders Dominik Schiener and David Sønstebø attempted to set the record straight a handful of times on crypto forums like Reddit, Medium, and other social media platforms, but few saw these as true explanations, as it had become virtually impossible to find the signal amid the noise.
When you have free-entry, a market that wants to get filthy rich fast, and no gatekeepers when it comes to creating money supply, there is huge incentive to create a new ICO. Once launched, inaccurate ICO news often spreads through social sites like Reddit, Medium, and Telegram because it offers investors hope. Investors then share stories that fit a picture of what they want to believe.
This is fine if it serves a true purpose. The key to understanding cryptocurrency pricing *should* simply be to ignore the froth, hype, FUD avalanches and instead focus on its utility. But this is easier said than done. Every valuation framework that has been proposed to predict the success of an ICO fails almost entirely because of the model’s inability to measure sentiment.
