“The central idea in The Black Swan is that: rare events cannot be estimated from empirical observation since they are rare.” — Nassim Nicholas Taleb
A black swan event, a phrase commonly used in the world of finance, is an extremely negative event or occurrence that is impossibly difficult to predict. In other words, black swan events are events that are unexpected and unknowable. The term was popularized by former Wall Street trader Nassim Nicholas Taleb, who wrote about the concept in his 2001 book.
The Blackest Swan of the 21st Century..thus far..
1. The 1997 Asian Financial Crisis
2. The “Dotcom” Crash
3. 9/11 Attacks
4. The 2008 Global Financial Crisis
…The Covid 19 + The Oil War
Since last week’s newsletter, the number of confirmed cases has doubled. Evidence suggests that Covid-19 is set to spread further and faster. Thus far, the mortality rate is approximately 4%. This indicates that if the spread is left uncontrolled, then the number of deaths could be:
1 million infected = 40,000 deaths
10 million infected = 400,000 deaths
100 million infected = 4 million deaths
1 billion infected = 40 million deaths
In contrast, the Bubonic Plague or infamously known as the Black Death that occurred around 700 years ago had the number of deaths estimated at 50 million. With a world population estimated at 500 million at the time, that was a 10% mortality rate. It goes to show that the only weapon we have now is to flatten the curve and stop the spread of Covid19.
Thankfully, medicine has advanced significantly in the centuries since and as of 2 days ago, scientists in the U.S.A and China are already looking at vaccination trials.
Futures volume on cryptocurrency exchanges
On the March 8, the Oil War was “officially” declared and this resulted in not just a Black Monday at the stock market the following day, but combined with Covid-19 effects, the perfect storm occurred and led to an entire week of share prices diving, depreciated currencies and even commodities took a serious beating. Many indices across the globe had not seen these levels since the 2008 global financial crisis.
Bitcoin and cryptocurrencies were not spared and Bitcoin had on one day, fallen by more than 43%! It has somewhat recovered since then, and without quantitative easing too.
Interesting to note is that once again, we see that during a bear market such as it was in 2018 and 2019 (exchanges were able to provide a service to both miners, funds and traders a means to hedge themselves), there is increasing demand for futures contracts in the crypto derivatives market.
In 2020, there are more futures exchanges and all of them have been showing increasing volume over the past weeks.
One week before Black Week, the volume for one such top exchange was doing on average more than USD 2bn per day. Once the news came out about the Oil War on March 9, the volume had spiked to more than triple the normal average. When the stock markets opened the very next day, trade volume dipped due to the uncertainty resulting from the shock of markets crashing.
As the markets plunged worldwide over the next couple of days, the dive of BTC prices in relation to USD was seen as a great opportunity to not only put in short positions but also to grab the “knife” by catching entries on low spot prices or long positions at the lower support levels. The greater spike in volume experienced later in the week was also seen happening across all major crypto derivatives exchanges.
International Women’s Day
Check out the quotes from these celebrated women at the BitOrb website today! An article was also posted highlighting Angelina Kwan, former regulator at the Securities and Futures Commission in Hong Kong (SFC) and an advocate of digital assets such as Bitcoin.
Exchange Update: Hiring of more developers
In a time when many thousands will be losing their jobs due to the economic slowdown, we will continue to keep an eye out for talent as we grow our tech team. In order to catch the next wave, we are increasing our capacity to be able to output more features and tools in shorter time frames.
We are conducting interviews once a week every week.
Find out more about applying here.