Reflecting on Black Monday
October 19, 1987, is a date that sends chills down the spine of traditional bankers: Black Monday. On this day, the stock market plummeted by a staggering 23% in just one day. With automated trading systems going haywire, it marked a turning point in financial history that remains a reference point for market collapses. All the suits and ties were prepared for the psychological damage, but did they realize this was just the beginning?
The Crypto Connection
Fast forward to today, and if you ask a crypto enthusiast about Black Monday, the response is likely to be a shrug or a chuckle. As serial investor Alex Tapscott recently quipped, “in crypto, we just call that Monday.” For the cryptocurrencies like Bitcoin and altcoins, daily swings of 23% aren’t an alarm; they’re more like Tuesday. Traders far more resilient to volatility have learned to ride the roller coaster rather than scream with fear.
Lessons from the Past
One of the prominent figures from this era, Nicholas Taleb, shared some valuable lessons about market crashes:
“The first lesson I learned was that these things happen. The second lesson I learned was that when they happen, what you make everywhere else disappears. Unless you’re hedged for events like Black Monday, whatever alpha you think you’re going to get, you’re not going to get.”
Wise words indeed! When the market tumbles, all bets are off; particularly when you realize your hedge didn’t perform as expected.
The Resilience of Crypto Investors
Looking at Bitcoin’s track record since 2013, we see several major crashes, often laughing in the face of impending doom with losses that even reshape the traditionalists’ fear. Near 50% losses have become a rite of passage in crypto land, yet the investors remain bold and optimistic. Why? They’re learning and recovering, with market rebounds becoming more stable each time the digital currency screams back from the brink.
A Split Opinion
Yet, the narrative is not without drama—opinions clash like titans. On one corner, you have steadfast crypto advocates, convinced of its longevity and ultimate dominance. On the other, traditionalists waving their hands dismissively, comparing Bitcoin to the infamous Tulip Mania, a historical bubble infamous for its irrational exuberance. Who will win this epic tale of financial evolution? Your guess is as good as mine!
In Conclusion
So here we are, thirty years after Black Monday, and the financial landscape has dramatically transformed. While one market fears plunging heights, another embraces volatility with a hearty laugh. After all, in crypto, every day can feel like a new adventure—whether it’s a thrilling ride or a nosedive, grab your helmets, folks!
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