Is a black swan about to appear?

Is a black swan about to appear? What is a black swan? A black swan often refers to an unexpected event that has a significant impact on the global economy. Unfortunately, we cannot predict a black swan, even though its enormous damage is something everyone wants to avoid. The Black Swan or Black Swan comes from a Latin phrase by Juvenal - a Roman poet who lived in the 2nd century.
The Latin phrase he mentioned means "an unusual bird that suddenly appears". in a land”. The term was first used by a writer and finance professor, as well as former Wall Street trader, Nassim Nicholas Taleb. He was the one who talked about this term in his book written in 2007. In it he emphasized the need to prepare for the unpredictable and plan to improvise if it arises. The Black Swan appears, then leaves a period where everyone talks about it and wants to show that it could have been predicted. However, in reality, black swans will only be able to come thanks to the element of surprise, which has never appeared in the past. That is, what we think can be known in advance is just an act called “hindsight”.
If the black swan could have been predicted in advance, it would never have had such a large impact on the global economy. Prominent black swan events in crypto The Fall of Mt.Gox Mt.Gox was the first and largest bitcoin exchange between 2010–2014. By 2013, it accounted for more than 70% of total global BTC trading volume. Hackers created one of the historic events in February 2014, about 850,000 BTC (40 million USD at the time) was stolen. Then this exchange was forced to declare bankruptcy due to the incident. This hack caused the price of Bitcoin from $1160 in December 2013 to below $400 in February 2014. Covid-19 pandemic The Covid-19 pandemic appeared very suddenly and beyond all our expectations. This is considered one of the biggest black swans, causing a global recession. Most people thought that after the virus outbreak, money would pour into Bitcoin and other cryptocurrencies because Bitcoin is considered “electronic gold”.
But Bitcoin dropped 15% after the virus broke out, and was then bought by investors when information appeared to control the epidemic as well as successfully prepare a preventive vaccine. The fall of FTX FTX used to be the second largest cryptocurrency exchange in the world, but it collapsed due to internal corruption. According to a report, FTX had $900 million in liquid assets and $8.9 billion in liabilities before declaring bankruptcy. This is the largest exchange to fail in the history of cryptocurrency, leading to the collapse of the famous venture capital fund 3AC in which FTX held a large stake. Everything started with a tweet from CZ, the CEO of Binance, with the intention of selling all of his FTT tokens. This tweet caused a panic sell of FTT tokens and panicked investors withdrew money from the FTX exchange. Reasons leading to the Black Swan in crypto In the world of cryptocurrency, black swan events can take many different forms.
Due to the inherently high volatility and rapid rate of change of the cryptocurrency market compared to other financial industries, there are quite a few reasons that can lead to a black swan: Government regulations: Government regulations such as sudden bans on cryptocurrency trading or tightening of exchanges can cause prices to plummet. Notably, the Chinese government's restrictions on cryptocurrency are notable. Security Breaches: Major security breaches and hacks can compromise major cryptocurrencies and exchanges. Hacks like Mt. Gox in 2014 and Ronin Network in 2022 caught the market off guard, leading to millions of dollars in losses. Technology flaws: Vulnerabilities in blockchain technology can lead to huge consequences.
If a major vulnerability is discovered in a widely used cryptocurrency protocol, it could undermine investor confidence, causing a decline in the value of the cryptocurrency. Macroeconomic factors: Global economic events, such as political crises, can spill over into the cryptocurrency market. War, epidemic: These are factors that ensure surprise and the huge impact it brings to the economy as well as crypto. Most recently, we have witnessed the Covid-19 pandemic lasting several years, causing the economy to be extremely seriously affected. How to prepare for a Black Swan event Due to the unpredictable nature of black swan events, we always need to be prepared before they actually occur: Diversify your portfolio: Spreading your investments across different cryptocurrencies will help minimize losses when one coin suddenly collapses. Luna or FTX are two recent examples of not focusing all your money on 1 or 2 coins. Risk management: Should have a plan for multiple sources