Those unexpected 'black swan' moments in the crypto world
In the world of cryptocurrencies, risk is ever-present, even the most seasoned players can hardly predict all the changes. Here, we will discuss those astonishing 'black swan' events, which remind us that in the face of risk, everyone is equal, and risk control is always on the way.
The Mentougou earthquake
Back in 2014, there was a Bitcoin exchange called MTGOX, which was a leader in the industry. But in February of that year, it was hit by a hacker, and 850,000 Bitcoins vanished, accounting for 7% of the total Bitcoin supply at that time. This 'earthquake' directly caused the price of Bitcoin to plummet by 80%, plunging the entire crypto market into a crisis of trust.
The storm on September 4
Fast forward to September 4, 2017, when a regulatory announcement from mainland China declared ICOs (Initial Coin Offerings) as illegal activities. As soon as this news broke, the token market collapsed instantly, and Bitcoin plummeted by 32%. Overnight, countless people in the crypto circle suffered heavy losses, with 160 million in assets disappearing into thin air. That was truly an unforgettable dark moment.
The terrifying drop on March 12
By March 12, 2020, Bitcoin experienced a terrifying crash again. With the pandemic raging and the global economy in turmoil, investors thought Bitcoin would be a safe haven, but it dropped from $7,900 to $3,780, losing more than half of its value in just two days. It seems that safe-haven assets are not so easy to be.
The night of May 19
On May 19, 2021, Bitcoin faced another severe blow. The central bank and three major financial associations joined forces to crack down on virtual currency trading. Although the market was relatively calm that day, by evening, Bitcoin could not hold up and fell from $44,000 to $29,000, a decline of over 30%.
The fall of Luna
Next, we need to talk about Luna, the public chain ecosystem created by the South Korean Do Kwon. In this ecosystem, the two currencies, Luna and UST, played a game of 'you increase, I decrease.' However, in May 2022, the game could no longer continue, large holders began to sell off UST, causing the price of Luna to plummet and UST to completely lose its peg to the US dollar. Ultimately, Luna nearly went to zero, and the Terra public chain was declared halted. This crisis also shook the decentralized finance (DeFi) sector.
The collapse of FTX
Finally, we must mention the FTX incident at the end of 2022. This once-thriving exchange, ranked second and backed by major institutions like Sequoia and Temasek, unexpectedly faced chaotic internal management and misappropriated customer funds. By the end of November, FTX collapsed, and the price of Bitcoin was hit hard again, dropping from $60,000 to around $15,000, a staggering decline of 75%. This crisis caused the entire crypto market to tremble.
In short, the world of cryptocurrencies is filled with uncertainty and risk. In the face of these 'black swan' events, all we can do is remain vigilant and prepare for risk control. After all, in this world, there are no eternal winners, only survivors who continuously learn and adapt.
