History knows many cases of global financial crises — 1857, 1929, 1987, 2008. They have many things in common, but only one thing is important — everything always comes back to normal. Panic only drags this point away. Stop panic. You can beat this. You can win. The course is still not frozen. Trends are still being looked at. Analyze, trade, make money! After all, there’s a shorts.
Winners and losers will always be. It’s up to you to decide which side you’re on.
Let’s take a look at the most famous of the crises:
1. The first truly global crisis is considered to be the 1857 crisis. It hit the economies of the USA, Germany, England and France. It was linked to the massive bankruptcy of railway companies in the United States and the decline of the stock market. Without good transport supply and a well-functioning banking system, production started to fall. Mostly steel (cast iron), national economy (cotton) and shipbuilding. After this crisis, bankers around the world began to pay more attention to risk insurance.
2. The crisis of 1873–1878. Connected with the sharp dependence of Europe and the USA in cheap goods from Latin America. There was a speculative upturn in the Austrian and German stock markets. This caused an explosion of growth in real estate. And then the economies of many European countries collapsed.
3. 1914. The crisis caused by the outbreak of World War I. Unlike others, it did not move from the center to the periphery, but occurred simultaneously in several countries. In fact, at the same time the USA, Great Britain, France and Germany began to get rid of foreign issuers’ securities to finance military companies.
4. 1929–1933. The time of the Great Depression. It’s hard to tell where it started. After all, the US was on the rise after World War I. Rising shares of banks, large companies, increased production of goods, etc. It seems that the economy simply couldn’t stand such rapid growth. In 4 years of depression, 30 million people lost their jobs.
5. 1973. The reason for this crisis was the desire of the three OPEC member countries to raise the cost of a barrel of oil by reducing the amount of oil produced. This led to an average 20–30% reduction of production capacity in Europe and the USA. 15 million unemployed people were thrown into the streets.
6. 1987. “Black Monday”. Dow Jones index dropping by 22.6% in the USA. The reason is a massive outflow of investors from regional markets.
7. 1997 — Asian crisis. The ubiquitous devaluation of Southeast Asian countries, again due to investor outflows.
8. 1998 — Russian crisis. The reason is a huge national debt of Russia, the construction of a pyramid of short-term bonds and the fall in world prices for raw materials, to which Russia is the supplier. The consequence is a default.
9. 2000–2003. “Dotcom collapse”. The crisis caused by mass investments in Internet projects. The schemes of monetization and withdrawal were imperfect and showed their ineffectiveness. One way or another, this event greatly affected the relationship between the IT sphere and the economy as a whole.
10. The global financial and economic crisis of 2008–2012. Reasons are still being clarified to this day. However, it is clear that it started with the U.S. mortgage crisis in early 2008 and affected the entire credit sector.
Cryptocurrencies have not yet had to be part of the global crisis. They have experienced their own local crises, but not world ones. To date, they have succumbed to panic and general influence. But decentralization, high volatility, and lack of attachment to traditional values give the cryptocurrency a chance to emerge from the crisis dozens of times faster than the stocks.