White Swan Event

A white swan is an easily predictable event that is anticipated based on current information and forecasting.


What Is a White Swan Event?

A white swan event is predicted with a high degree of certainty. It often has three common characteristics:

  • It is sure to occur.

  • Its impact is easy to quantify.

  • Human error is usually considered the cause of such events.

A recession is a good example of a white swan event. Metrics such as rising unemployment, inflation and negative GDP growth are signs of a recession. The World Bank has recently announced that the global economy is headed into stagflation, an economic event sharing some characteristics with recession.
While no one can tell the exact date, what is certain is that economy-related issues (white swan events) are going to occur at some point. It is one of the reasons the world is adopting cryptocurrencies at an accelerating rate. They have proven themselves to be a good hedge against inflation in nations where the local currencies have collapsed.

White Swans in the Crypto Market

The crypto market may be taken as a white swan event. This is because, over the long term, it is easy to predict how it will pan out. For instance, since its creation over a decade ago, it has experienced tremendous growth. While there are always periods of bear market conditions, the crypto market’s recovery is always predictable, very much like a pendulum that swings both ways after reaching the equilibrium point.
When it does rise, it is often relatively fast and usually hits a new all-time high. There seems to be a lot of room for growth because only a small percentage of the world has ever interacted with crypto. It will shoot the demand up, and consequently, the market cap will increase.