In the TradFi market and the Crypto Assets field, we often encounter the terms "black swan" and "gray rhino." So, what do they actually mean, and what is the difference between them?

### The significance of the black swan event

The term "black swan" was introduced by writer Nassim Nicholas Taleb in his book, referring to those extremely rare and unpredictable events. These events often have a massive impact. Taleb emphasizes in his book that traditional statistical models and risk models cannot effectively capture these extreme events because they rely on past data, whereas black swan events are typically those that have not occurred in the past, making them unpredictable.

Taleb reminds us not to be overly confident due to past safety experiences. He points out that when faced with the unknown and uncertainty, people often fall into misunderstandings and even fantasize that they can completely control the situation. However, in reality, the world's changes are often nonlinear and cannot be smoothly predicted.

The term "black swan" originates from ancient times when Europeans generally believed that all swans were white, until the discovery of black swans in Australia, which overturned long-held beliefs and theories, becoming a paradigm of unpredictable events.

In the black swan event of the Crypto Assets field

For example, in the Crypto Assets market, price fluctuations are severe, and the attitudes of governments towards Crypto Assets vary by country, with their regulatory policies influenced by factors such as technology and market sentiment. On March 12, 2020, in the face of the impact of the COVID-19 pandemic, the Crypto Assets market experienced two sharp declines, which is considered the most severe market crash in the past seven years. The reason can only be summed up as a systemic collapse.

On May 18, 2021, one year later, the three major associations of China's financial industry issued a statement prohibiting any business involving Crypto Assets and warning about the speculative nature of the market. This news caused the Crypto Assets market to plummet, with over $9 billion liquidated in a single day.

The relationship between Taleb and the Crypto Assets community

As for Taleb's own attitude, in 2018 he stated that Bitcoin could be an "insurance policy," but by 2021, he criticized Bitcoin for being unable to counter inflation risks, calling it a "stupid game."

### The meaning of the gray rhinoceros event

The term "gray rhino" was proposed by writer and risk analyst Michele Wucker in her work, referring to obvious and highly probable risks that are often ignored or postponed for handling. These events tend to have a high probability and far-reaching effects, but are frequently overlooked for various reasons. She emphasizes that early identification of these risks and taking action can reduce future losses.

The "gray rhino" symbolizes a powerful, obvious, and threatening presence, aligning with risk characteristics. Unlike a black swan, the gray rhino focuses on risks that are obvious but often ignored.

The gray rhino event in the field of Crypto Assets.

In the early hours of May 10, 2022, the algorithmic stablecoin UST on the Terra (LUNA) platform experienced a massive decoupling event, leading to widespread panic in the market, causing significant losses for many users. This incident had been controversial since early 2022, with some analysts believing that a series of gray rhino phenomena occurred in the same year, leading to this event.

In addition, today's Ethereum has completely transitioned from PoW to PoS, making the dream of mining with graphics cards a thing of the past. During this transition, certain signs may have been apparent for some time but were not given timely attention.

Disclaimer: The content of this article contains third-party views for reference only. The content does not constitute investment advice.