Musk predicts a 2022 economic crisis, how can we prepare for the next possible plunge?

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."

Under the influence of the Fed's interest rate hike expectations, the crypto market has indeed followed the stock market all the way down, and under the turmoil in the crypto market, how should we, as ordinary investors, respond? ......

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

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.

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".

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.

How do you prepare for the next Darkest Hour?

The "9.4 incident" and "5.19 plunge" are respectively the directional adjustment caused by endogenous factors of the entire industry, and the "3.12 plunge" is a liquidity crisis caused by the macro environment, and these three extreme crisis events have carried out extreme stress tests when the crisis came to the entire crypto market from many sides.

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.

All articles in this public account are intended to convey industry information and do not constitute investment advice, so please invest with caution

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