This is the original issue 1538 of the vernacular blockchain
Author | Produced by Terry
| Vernacular Blockchain (ID:hellobtc)
On December 31, 2021, Musk replied to a netizen question, saying that "predicting the macro economy is very challenging, and my intuition is that (the economic crisis) may be in the spring or summer of 2022, but not later than 2023."
The gale began at the end of Qingping, under the influence of the Fed's interest rate hike expectations, the crypto market did follow the stock market all the way down, and the asset feast since last year's big water release seems to be really coming to an end, and pessimism is generally spreading.
Defense is one of the most important decisions, and if there is an economic crisis in 2022 or beyond, as Musk said, how could it affect the crypto market? Under the turmoil in the crypto market, how should we, as ordinary investors, respond?
01
Bitcoin
The "world currency" that emerged in the crisis
Let's turn our attention back to 2008, on September 15 of that year, Lehman Brothers, which owns huge commercial real estate and is one of the five major investment banks on Wall Street, declared bankruptcy, which became the last straw that crushed the camel, and the first domino of the global financial crisis officially collapsed, triggering a financial tsunami that swept across the capital market, bank credit and other dimensions.
Banks fail, money is printed in large quantities, and the money of our ordinary people is entrusted to the banks for safekeeping, but if they cannot be trusted, or even if our monetary wealth is greatly diluted and deprived of unlimited money printing (so-called "quantitative easing"), then what can we expect?
It was against this obscure background that the spark of stars began to appear:
On November 1, 2008, Satoshi Nakamoto released the Bitcoin White Paper: A Peer-to-Peer Electronic Cash System.
On January 4, 2009, Satoshi Nakamoto created the Genesis Block and received his first block reward: 50 Bitcoins (bitcoin has undergone three halvings, down to 6.25 bitcoins per block);
On January 12, 2009, Satoshi Nakamoto sent the world's first Bitcoin transaction (the recipient of the transaction, Hal Finney, is considered one of the most likely Satoshi Nakamoto figures);
Interestingly, when Satoshi Nakamoto created the Creation Block, he "carved" a comedic sentence on it - "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" (at a time when the Chancellor of the Exchequer was forced to consider a second intervention to alleviate the banking crisis).
This is actually the title of the front page article of the British Times that day, which introduced some details of the Bank of England's bailout in the context of the 2008 global financial crisis. In fact, from this "performance art", we may also be able to get a glimpse of the significance of Satoshi Nakamoto's creation of Bitcoin:
The resistance to the wanton deprivation of people's wealth under "quantitative easing" aims to realize the ideal of a super-sovereign global currency by technical means, so as to combat hyperinflation and ensure the sanctity of people's private property.
In 2012, Bitcoin showed the world the possibility of "super-sovereign world currency". At that time, the Cypriot government planned to obtain EU bailouts at the expense of savers, freezing deposits above 100,000 euros to solve the debt problem.
This caused great panic among the general public and strong doubts about the safety of banks, and some people discovered Bitcoin independent of sovereign currencies, making Bitcoin appear on the international stage for the first time.
Of course, after more than a decade of growth, today's Bitcoin may no longer be just a single vision of a "global currency":
Nowadays, users who buy and hold Bitcoin are not really using it as a currency for payments and transactions, but more as a store of value with a consensus basis, similar to "digital gold" - a better severability, portability and liquidity than gold.
Even so, due to the recent sharp depreciation of the Turkish currency, the lira, the search volume of Bitcoin and the number of downloads of Bitcoin wallets in Turkey have surged, and how similar to the former Cyprus, the spark is still burning.
02
The history of the crypto market turbulence events
However, Bitcoin, which originated in the 2008 global financial crisis, has also been tested by many crises in the 13 years since its birth.
Taking history as a mirror, here we review the performance of the Bitcoin and crypto markets during the past macroeconomic turmoil, and simply review the most well-known "9·4", "5·19" and "3·12" events in the industry, and jointly review how the Bitcoin and crypto markets behave during macroeconomic turbulence, and how there are historical laws worth learning from.
9.4 incident
The "9.4 incident" was undoubtedly an industry watershed, and the almost crazy wave of speculation in China was directly put on the brakes.
On September 4, 2017, seven departments, including the Central Bank, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the State Administration for Industry and Commerce, the China Banking Regulatory Commission, the Securities Regulatory Commission, and the Insurance Regulatory Commission, officially stopped 1C0 financing.
As soon as the announcement came out, the prices of various tokens on the exchange fell all the way, among which all kinds of projects issued through 1C0 financing fell the most severely, and they all fell below the issue price, with the highest decline of more than 90%, and even many projects that took the opportunity to run away from zero.
Stimulated by the story of a million, tens of millions, and billions, people who entered the crypto market with a hundredfold and a thousandfold fantasy woke up and became the most vulnerable group at that time.
March 12 plunged
From 12:00 on March 12, 2020 to 12:00 noon on March 13, in just 24 hours, Bitcoin, which has been in decline for a week, began to decline from $7600, first to $5500.
The follow-up broke all the way down the support point, the lowest down to $3600, the overall market value evaporated by 55 billion US dollars, the whole network exploded more than 20 billion yuan, and accurately achieved "price halving".
There is no end to the nest, the sudden market waterfall makes the secondary market "blood flowing into a river", especially in the context of the general leverage of individuals and institutions, the inevitable serial bursts further promote the depletion of liquidity, selling, shorting, serial stampede, leverage to kill leverage.
The domino effect triggered by the "black swan" plunge eventually wiped out the bulls in the market, and the price of BTC even fell below $3800 at one point, hitting the accepted bear market low in 2019.
This plunge tragedy, which is enough to enter the history of the currency circle, has achieved a tragic "deleveraging" process under the market stampede of a series of explosions, and has put the panic of investors to the maximum, almost unstoppable.
May 19 plunged
Last year's May 19 was an unprecedented "disaster" for participants in the crypto market.
In a short period of time, China's computing power, which once played a pivotal role in the mining landscape, disappeared, including the clean-up and rectification of social media, and the market panic caused by the collateral has made the market that has entered the bull market for nearly a year suffer an unprecedented market value evaporation process, bitcoin once fell below $30,000, directly from the highest point, and the entire crypto market was bloody.
03
How do you prepare for the next Darkest Hour?
In retrospect, the "9.4 incident" and "5.19 plunge" were directional adjustments caused by endogenous factors in the entire industry, respectively, and the "3.12 plunge" was a liquidity crisis caused by the macro environment.
And every "crisis" in the crypto market, hindsight proved to be essentially a good opportunity:
The despair of the "9.4 incident" bred hope, and three months later, the crypto market immediately opened a magnificent bull market, which should also be the initial impression of many crypto industry practitioners on the crypto market bull market;
After the "3.12 plunge", the crypto market began with the "Summer of DeFi", opening a "Cambrian explosion" that set a record in both height and breadth;
In the more than half a year since the "5.19 plunge", the domestic crypto market has accelerated into Web3, and the domestic industry has developed a new stage of buying;
In short, no matter what kind of unprepared crisis, only those who are prepared to be kicked out can taste the post-crisis feast.
Before the 2020 "3.12" crash, Authur Hayes, CEO of crypto derivatives exchange BitMEX, posted a blog post predicting macroeconomic crises and crypto market turbulence, ending with "Long live volatility, and stay healthy" (growing from volatility, always staying healthy).
This is perhaps the best survival guide in today's volatile market: anything that doesn't kill us will make us stronger, so the way to deal with a crisis may be simple – to keep cash flowing, to live healthy, and to be ready to embrace the gifts of crisis.
The crisis is not an opportunity, but it is only an opportunity for those who are prepared, and we must ensure that we are always on the same high-speed train in the same direction as the fast-growing crypto industry. Long crypto, short the world。
END
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"Disclaimer: This article is the author's independent point of view, does not represent the vernacular blockchain position, this content is only for the majority of crypto enthusiasts to learn and communicate, does not constitute investment opinions or suggestions, please look at it rationally, establish a correct concept, and improve risk awareness. The copyright and final interpretation of the article are owned by the vernacular blockchain."