I just reread what the concept of a black swan is and found it extremely important for understanding the crypto market. Simply put, a black swan is an unexpected, rare event that has a horrifying impact on prices and the market. Nassim Nicholas Taleb introduced this concept in his book *The Black Swan*.

In crypto, what exactly is a black swan that many people fear? It refers to unpredictable shocks that are difficult to foresee—such as the collapse of FTX in 2022 or the disintegration of Terra/LUNA. These events are often impossible to see coming in advance, but when they happen, they cause massive price swings, shaking the entire market.

I’ve found that black swans in crypto have a few clear characteristics. First, they are rare and completely unexpected because the crypto market is still fairly young and is easily affected by news from outside. Second, their impact is extremely large—prices can swing sharply, affecting not only one type of coin but the entire ecosystem. What’s interesting is that after it happens, experts try to explain why it occurred, even though they couldn’t predict it beforehand either.

There are no shortage of examples of what black swans look like in crypto history. COVID-19 in late 2019 caught all of us off guard, throwing the entire economy and financial markets into chaos. Then the collapse of FTX in 2022—a giant exchange suddenly went bankrupt—causing Bitcoin and the whole market to drop sharply. The Terra ecosystem with LUNA/UST also disappeared in an instant, leading to losses of tens of billions of USD. China’s ban on cryptocurrencies was also a major shock that made the market plunge uncontrollably. Or recall 2021, when Bitcoin fell from a peak of 64,000 USD to below 30,000 USD in just a few weeks, making many investors panic.

What is the impact of a black swan? First of all, liquidity can disappear entirely—you want to sell but nobody is buying, you want to buy but nobody is selling. Investors’ confidence is severely damaged, especially for projects or exchanges that are affected. There are opportunities, but there are also risks—major investors may take advantage of low prices to accumulate assets, while smaller retail participants end up suffering heavy losses.

I’ve drawn a few lessons from these experiences. Risk management is crucial—never put everything into a single asset. Diversifying your portfolio is the best way to protect yourself. Always keep part of your capital in stablecoins or traditional assets so you’re ready when shocks happen. And most importantly, closely monitor news, because black swans often originate from major events such as bankruptcies, bans, or system failures. Understanding what a black swan is will help you be more prepared for unexpected market fluctuations.