What is a black swan? That is a question everyone involved in crypto should understand clearly. This term refers to unexpected, rare events that have a devastating impact on the market. Nassim Nicholas Taleb introduced this concept, and it truly fits the world of digital assets.

In crypto, a black swan refers to unusual shocks—hard to predict in advance, but when they happen, they shake the entire system. Prices plunge, liquidity evaporates, and confidence collapses. I’ve been through it a few times, and it’s truly an unpleasant experience.

Major events in crypto history are the most typical examples. COVID-19 suddenly came, and the global financial markets were thrown into turmoil. Then, there was the collapse of FTX in 2022—an enormous exchange suddenly went bankrupt, dragging Bitcoin and the entire market down. In 2022, LUNA and UST also collapsed completely; tens of billions of USD vanished, and confidence in algorithmic stablecoins was seriously damaged.

There was also a time when China unexpectedly issued a ban on crypto mining and trading, causing the market to drop significantly. Or in 2021, Bitcoin fell from a peak of 64,000 USD to below 30,000 USD within a few weeks, causing major panic among investors.

The characteristic of these events is that nobody can usually predict them in advance. The crypto market is still young and depends on far too many external factors. When they occur, the impact is extremely large—not only affecting one coin, but spreading across the entire ecosystem. After that, experts start analyzing and explaining why it happened, but by then it’s already too late.

Honestly, these events create both opportunities and risks. Big investors can take advantage of low prices to accumulate assets, while smaller players often suffer severe losses because they are forced to sell at low prices.

The lesson I’ve drawn is that you need to manage risk really well. Don’t invest too much in just one type of asset. You should diversify your portfolio and invest in multiple different projects. Most importantly, always keep part of your capital in stablecoins or traditional assets so you’re ready to deal with shocks. In addition, closely monitoring information is also essential, because black swans often originate from major developments such as bankruptcies, bans, or system failures.

Especially when the crypto market is still young, the likelihood of a black swan happening is very high. So prepare your mindset and strategy in advance to avoid being caught off guard when it strikes.