What you should know about the Black Swan Event

We all know that predicting the crypto market is not as easy as one may think most of you will hear someone say the market will be bullish which at the end of the day, it will become bearish, which is a sign of "black swan event" because the market is full with an unexpected event.

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Black Swan Event

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In the crypto and financial markets generally, there several unexpected events positively or negatively impacted the financial markets. Without further ado, Black Swan Event is an unexpected occurrence in the financial markets that has a significant influence on prior predicted events.

This is simple to understand right. There are so many predictions in the financial markets that don't occur immediately, and most time even those who predicted may have forgotten about their prediction suddenly what they have predicted for months or years will just occur making a significant impact in the market. Well black swan event hardly happens, and despite its significant impact, there are still some consequences.

A good example of a black swan event that shook (hit) the entire world was the COVID 19 which became a threat to our societies without warning us. The epidemic hit the world without informing anyone at first there was no significant equipment to stop the epidemic from spreading thereby causing a significant influence on the unemployment rate, stock market decline, business decline and so on which is a clear example of a black swan event that happens in the real world.

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Black Swan Events in the Crypto Industry

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We have looked at the black swan events in the real world, and in the crypto industry, black swan events, usually happen in different forms. Due to the volatility nature of how the crypto market is, seeing the unexpected is very common some of the things that cause black swan events are:

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• GOVERNMENT REGULATORY SHOCKS:

We have been hearing about sudden bans on cryptocurrency from different parts of the world in Nigeria the government has tried many times, to crack down on crypto exchanges and traders, and whenever the government makes such an announcement the crypto market is usually affected by price decline.

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• TECHNOLOGY VULNERABILITY:

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An unexpected vulnerability in a blockchain network can cause a black swan event. This can happen when someone is tempered with a blockchain network, or crypto protocol which can make investors lose interest in the project.

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• SECURITY BREACHES:

Security breaches like hacks can affect crypto exchange. In 2022 there was a security break in the Ronin network which resulted in the losses of millions of dollars owned by customers.

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• MARKET MANIPULATION:

Investors don't want to hear about coordinated market manipulation such as pump and dump strategy which even you as an investor if you should hear that so so an so crypto project is into the pump and dump you will be prompted to withdraw your money. A good example of a crypto project that is still suffering from market manipulation is the FTX and Terra Luna** project that destabilized the crypto market in 2022.

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Conclusion

_{Black Swan Event is what we have talked about in this post, which we say is an unexpected occurrence that happens in the crypto market unaware even after it has been predicted or not. Many unexpected events have happened in the crypto market which you must have heard about. Please note that this post is strictly forbidden as investment advice, but serves as educational content.}

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