What significant black swan events do you know?
As 2024 is about to come to a close, I, the retail investor, have witnessed so many sudden legendary black swan events. Next time, I must encounter a good coin to buy the dip!! (Maybe not even in the next life :-)
Korean presidential internal turmoil incident (early 2024)
In early 2024, political disputes between the South Korean president and his government officials triggered market turmoil. The political instability within South Korea exacerbated market uncertainty regarding economic policies and regulatory directions. As South Korea is a significant market for global cryptocurrency trading, the political turmoil led to a significant decline in investor confidence in cryptocurrencies. In particular, the prices of Bitcoin and other cryptocurrencies experienced severe fluctuations in the South Korean market, even causing Bitcoin's price to plummet to half its value at one point, putting several local cryptocurrency exchanges at risk of capital outflows and bankruptcy.
China once again strengthens its regulation of cryptocurrencies (end of 2023)
At the end of 2023, the government intensified its crackdown on the cryptocurrency industry, especially regarding Bitcoin mining and cryptocurrency trading. This news quickly triggered market panic, particularly since China had previously been the center of global cryptocurrency mining. Although the Chinese government had issued several rounds of bans earlier, this crackdown was more thorough, leading to the shutdown of multiple mining facilities, withdrawal of investor funds, and causing a chain reaction in the global crypto market.
Re-exposure of Tether (USDT) reserve issues (March 2024)
In March 2024, media exposure once again revealed reserve issues faced by Tether, claiming that Tether's reserve assets were not fully backed by the promised 1:1 ratio of U.S. dollar reserves. While Tether argued that its reserves met requirements, this incident raised significant concerns among investors about stablecoins. As the largest stablecoin by market capitalization, USDT's stability was called into question, directly leading to turmoil in the stablecoin market and triggering panic sell-offs of other stablecoins (such as USDC, BUSD, etc.).
Binance.US completely exits the U.S. market (April 2024)
In April 2024, Binance.US announced its complete exit from the U.S. market due to increasing regulatory pressure from the U.S. government, involving investigations into its alleged violations of U.S. securities laws and anti-money laundering regulations. As one of the largest cryptocurrency exchanges globally, Binance's exit not only triggered massive capital outflows in the U.S. market but also affected liquidity and investor confidence in the global cryptocurrency market. The exit of Binance.US marks an increasingly severe regulatory situation for the cryptocurrency industry in the United States.
The trial and verdict of FTX founder Sam Bankman-Fried (May 2024)
In May 2024, FTX founder Sam Bankman-Fried (SBF) was ultimately convicted in court of market manipulation and financial fraud. Although FTX had already declared bankruptcy in 2022, the trial and its outcome still had a profound impact on the market. This event not only raised questions about the governance capabilities of cryptocurrency exchanges but also intensified regulatory scrutiny of the crypto industry and concerns for investor protection.
Further escalation of cryptocurrency regulation wave (June 2024)
In June 2024, major global economies (such as the United States, Europe, India, etc.) issued stricter regulatory policies regarding cryptocurrencies. These policies not only involve taxes and anti-money laundering regulations but also impose more restrictions on the trading, holding, and circulation of crypto assets. Particularly in the United States, the Securities and Exchange Commission (SEC) launched investigations into several large cryptocurrency projects, resulting in a more stringent regulatory environment for the entire industry. The market experienced capital outflows and a decline in investor confidence, directly leading to a sharp drop in the prices of Bitcoin and other mainstream cryptocurrencies.
DeFi platforms (e.g., Curve, Aave, etc.) suffer major vulnerability attacks (summer 2024)
In the summer of 2024, several well-known decentralized finance (DeFi) platforms (such as Curve Finance, Aave, etc.) suffered significant vulnerability attacks. Hackers exploited vulnerabilities in smart contracts for large-scale fund theft, resulting in billions of dollars in losses. These attacks not only exposed the security vulnerabilities of DeFi platforms but also intensified market trust crises regarding decentralized finance. Many investors began to question the sustainability and safety of DeFi projects, leading to capital outflows and a sharp decline in DeFi token prices.
The collapse of the NFT market (September 2024)
The NFT market experienced a crash in 2024, with many previously high-priced auctioned NFT projects facing liquidity exhaustion and loss of investor confidence. Due to excessive speculation and the bursting of the bubble, many NFT prices plummeted, and some platforms and projects announced bankruptcy or closure. The collapse of the NFT market not only affected artists and collectors but also triggered widespread questioning of the NFT business model and long-term value, further weakening market trust.
Bitcoin network congestion:
In the summer of 2024, the Bitcoin network's transaction processing speed was choked, and transaction fees skyrocketed. While this was a technical bottleneck, it also raised doubts among investors about Bitcoin's scalability, leading to a price decline.
Comprehensive regulatory crisis for stablecoins like USDT and USDC (November 2024)
In November 2024, the U.S. Treasury and regulators from other countries launched a comprehensive review of the stablecoin market. In particular, the regulatory pressure faced by Tether (USDT) and Circle's USDC significantly increased. Regulatory bodies worldwide began to impose stricter regulations on stablecoins, requiring issuers to provide more transparency and proof of reserves. This move led to massive turbulence in the stablecoin market, reducing investor trust in stablecoins and further triggering large-scale market sell-offs.
Cryptocurrency investment has endless attractive charm accompanied by ubiquitous risks!!
CC may be a retail investor, "As long as I haven't sold, I haven't lost" is not wrong!!