Black swans vs gray rhinos: how crypto investors get caught in traps

What's happening in the crypto market?

Have you ever noticed that crypto news often mentions two strange terms — “black swan” and “gray rhino”? It seems like some weird metaphor, but in reality, these are two completely different types of crises that explode in different ways.

Black Swan is something that no one has seen before. The term was introduced by writer Nassim Taleb: an event so rare and unpredictable that traditional statistical models are simply unable to capture it. Past security experiences do not guarantee future well-being.

On March 12, 2020, when the COVID-19 pandemic began, the crypto market experienced two sharp declines within a 13-hour interval — the worst drop in seven years. Analysts termed it a systemic collapse. Or on May 18, 2021: three Chinese financial associations banned all crypto business. The market fell by $13,591. In one day, liquidations exceeded $9 billion. This was truly a black swan.

What is a gray rhino?

Gray Rhino is a completely different beast. Author Michele Wucker named it the risks that we clearly see but ignore. It's not sudden; it's a clear danger that we simply… postpone.

A classic example is the Terra/LUNA collapse in May 2022. Analysts had been warning about issues since the beginning of the year. Rune Christensen from MakerDAO publicly wrote back in January:

“UST and MIM are Ponzi schemes. You can make money off them, but they are not designed for stability. When the market pulls the money out, they will disappear.”

But what happened? People ignored the signals. UST with its huge talk of “algorithmic stability” led money to nowhere. The tail broke off from the search for quick profits. The result: users lost almost everything, venture funds suffered, LUNA fell to zero.

Key Difference

How to avoid the next crisis?

Taleb expressed himself emotionally: if you hear an economist talking about “equilibrium” or “normal distribution” — ignore him.

For crypto investors:

1. Black swans — accept that the unpredictable exists. Diversify, don't put all your wealth in one pool.

2. Gray rhinos are your real problem. When technical analysts and experienced developers warn about a Ponzi scheme, about the lack of a real use case, about restructured emissions — listen. Delay only allows the risk to gain momentum.

3. Ethics vs Profit — the crypto world often chooses hot stories over reality. LUNA was a gray rhino months before the collapse. The Eth merge had the experience of GPU miners — another gray rhino that inevitably began.

Taleb's story about Bitcoin is telling: at first, he called it “insurance against inflation,” then 180 degrees — he criticized it as a fool's game. Why? Because he looked at the real data instead of the hype.

Conclusion: Black swans are inevitable. But gray rhinos are your test of common sense. Listen to the skeptics, check the numbers, look at the mechanics 2-3 times before throwing money in here. It's not fun, but it works.