You know, I recently rethought something. When you look at cryptocurrency cycles and market crashes, you can’t help but remember 1929. And not without reason — the same causes of the Great Depression were present then, just on a different scale.

It all started with a simple thing — people lost trust. In October 1929, there was a crash on Wall Street called Black Tuesday. But it wasn’t sudden. Years before that, there was wild speculation, stock prices soared to the sky, and people borrowed money to invest. Sounds familiar?

When investors realized that prices were inflated, panic set in. Everyone tried to sell at once. Millions of people lost their savings in a single day. This was one of the reasons for the Great Depression, but not the only one.

Then things got even worse. People who lost money on the stock market began withdrawing deposits from banks. Banks couldn’t return everyone’s money at once — they simply closed. A wave of bankruptcies rolled in one after another. Without deposit insurance (which didn’t exist), people lost everything. Loans were frozen, and the economy started to suffocate.

But that was only in the USA. Then the crisis spread worldwide. Europe, already weakened by World War I, took a hit. Governments began imposing protective tariffs — trying to save their economies. The Smoot-Hawley Tariff of 1930 was supposed to help American producers, but instead, it triggered a trade war. Other countries responded with their own tariffs. Global trade plummeted in free fall.

This created a vicious circle. Demand drops — companies cut production — unemployment rises — people spend even less — demand drops even more. A cyclical crisis that fed on itself. The causes of the Great Depression were interconnected — each one worsened the others.

In some countries, unemployment reached up to 25%. People queued for free bread. Thousands of companies shut down. Entire families lost everything. It wasn’t just an economic catastrophe — it was a social and political bomb.

The recovery took years. Franklin Roosevelt launched the New Deal — large-scale government programs to create jobs, reforms in the financial system, deposit insurance. It helped, but full recovery only came with the start of World War II, when governments began actively investing in industry.

Why am I telling you this? Because those who don’t know history are doomed to repeat it. Studying what caused the Great Depression shows us how fragile the system can be. Speculation, loss of trust, lack of regulation, chain reactions — we saw all of this in 2008, and echoes of it are heard even in cryptocurrency cycles.

It’s important to understand these patterns so as not to step into the same traps. History is the best teacher.