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6 Lessons Bitcoin Investors Can Learn From Past Financial Crises

The sharp ups and downs in price typical for Bitcoin may frighten newcomers to the crypto industry. However, anyone who has been following BTC for a relatively long period of time has grown accustomed to these fluctuations- you are unlikely to be afraid of a fall from $60,000 to $30,000 thousand if you have previously seen a fall from $20,000 to $3,000 thousand and the subsequent long rise to $60,000.

Fluctuations with such high volatility are much less common in traditional financial markets. However, it is possible for financial instruments to drop sharply and cause financial crisis.

A few past crises come to mind- the crisis of 2007-2008 or the dot-com bubble. These phenomena are similar, and cryptocurrency investors can learn a lot from past financial crises.

Let’s look back at our turbulent financial past to see what we can take away.

The following article is a guest post by Bert Kozma, a writer, and Editor-in-Chief at Cryptogeek.info. As an author, he has been covering cryptocurrency and financial markets over the past decade and draws on his years of experience as a marketing and sales expert. Saimaa University of Applied Sciences awarded him a Bachelor of Business in International Business.

Editor’s note: The following article is not investment advice and is intended solely for the purpose of entertainment and education. It is a volatile industry. Before making any investment, consult a licensed financial advisor.

Lesson 1: Follow the Crowd at Your Peril.

The crowd is a poor financial advisor. It panics easily and acts contrary to logic and commonsense.

In 2005, 3 years before the onset of the global financial crisis, several people managed to predict the growing bubble in the USA housing market.

These individuals were able profitably invest and made money during the financial crisis. The book “The Big Short” and the film based on it, Michael Lewis, describes how most “experts” of the time didn’t believe there was a bubble in the market. Those who did were deemed crazy.

Scion Capital hedge funds manager Michael Burry tried to convince his investors that they are using their assets correctly and playing against the market. Some even sued him. He was eventually right, despite all the pressure. After the mortgage market crashed, Scion Capital’s profit was 489 percent – more than $ 2. 69 billion.

A sober and crowd-independent judgment is a useful asset in volatile markets.

Lesson 2: There will always be cycles in a market. Prepare.

Bull market don’t last forever.

This seemingly simple rule is often forgotten by many investors, particularly during periods of steep price appreciation.

Before the 2007 US Real Estate Crisis, which triggered the global financial crisis, real estate prices rose for a long time. In the hope that their property would increase in value, people took out loans to buy real estate they couldn’t afford before.

Regardless of whether it’s dot-com stocks or the housing market or Dogecoin, sooner or later any growth will be followed up by a decline which may or not be disastrous.

Keep this in mind, and don’t lose sight of the possibility.

Lesson 3 – Don’t Give Up on Promising Assets after a Price Drop

When the infamous dot-com bubble burst on March 10, 2000, hundreds of Internet companies went bankrupt, were liquidated, or sold.


Amazon's stock price since the dot com crash.

Amazon’s stock price since the dot com crash. Source: Miro on Medium

Internet stocks in the late 90s soared inadequately due to the general hype around the emergence of the Internet and its potential use for business. Numerous economists and commentators argued that these high stock prices were justified. Instead of creating their own business models and strategies, the companies spent money on marketing and advertising.

After the crisis, the term “dot-com”, which was used for many years to describe any immature or ill-considered business plan, became obsolete. Investors were reluctant to invest in Internet stocks because of the loss of trust in tech companies.

Today, few people are able to recall bankrupt companies like NorthPoint Communications and Global Crossing. However, many of the startups that emerged from the dot-com boom have significantly more weight: Amazon, eBay and Google are among the most valuable companies in the world.

When the price of bitcoin dropped to $3,000 in 2018, down nearly 90% from its then-ATH, many adamant investors held on. When BTC’s price rose to $64,000 in 2021, they were rewarded for their steady hands and long-term belief in the asset.

Evaluate the long-term prospects of an asset, regardless of the current hype.

Lesson 4 – Diversify

Investing all your funds in a single asset can be very risky.

If you are actively investing in cryptocurrency, diversifying your financial assets into stocks, fiat currencies and real estate is a good idea to reduce the risk of losing everything.

Lesson 5 – Be Wary of Assets that Have No Clear Value

An investment target that is not backed up by real value and has real-world utility is often regarded as dubious. Yet, many speculators take advantage of the opportunity to ride this wave.

These assets were discovered to be Internet stock during the dot-com boom.

During the 2008 crisis, the so-called synthetic CDOs represented bad debt that was much riskier than anticipated.

When we examine the most speculative crypto assets that have prices that pump for just one tweet or seem at random, we consider popular assets such as Dogecoin

Dogecoin, for example, was created as a meme and not the universally recognized vehicle of value like Bitcoin and Ethereum. It has nevertheless experienced significant growth in 2021, thanks in large part to the vocal Doge proponent, Elon Musk.

Granted, some might say that Bitcoin is also an asset that has no real-world value. Bitcoin is the most well-known and oldest cryptocurrency. It has been a reliable source of value and a medium for exchange. The Bitcoin investor ethos is credible because most altcoins can’t boast the same.

While some altcoins have greater technology than others, most coins that are on the market would make foolish investments.

Understand investing in memes in trends can be risky.

Lesson 6 – Bitcoin Investors Should Have a Backup Plan

A large-scale crisis could directly impact the viability and financial stability of financial institutions.

In “The Big Short”, Michael Burry placed a wager against the housing market by using a credit default swap.

Banks were required to pay large amounts of money in the event of a drop in securities prices. He also predicted that the crisis would become so severe that many banks would have to close their doors and not be able to pay their debts.

He saw this scenario coming and decided to only deal with banks that were not closely tied with the housing market, and would be able to withstand a crisis.

Something similar may happen in the cryptocurrency market. Imagine you have made an investment in a cryptocurrency that is only listed on a few exchanges. Imagine that you are unable to sell your assets on these exchanges due to the massive drop in cryptocurrency prices.

Poof – Just like that, your coin’s liquidity dwindles.

You need to have a backup plan.

Perhaps more likely is the restriction of the work of exchanges in the territory of certain countries in the event of a crisis. Now, it’s typical that cryptocurrency exchanges won’t be available to use in certain countries (for example, Hitbtc is not available in the USA). These restrictions may be more severe in the case of a crisis.

What might happen to your digital assets if the country that regulates these exchanges prohibits them from doing business?

Consider where these exchanges are situated and what the country’s cryptocurrency policy could be.

Carefully choose cryptocurrency exchanges and wallets and take into consideration all possible scenarios, and seek self-custody wherever possible.

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FTX claims: Creditors in Russia, China, Ukraine among those temporarily unable to participate

FTX creditors in several countries, China, Russia and Ukraine included, unable to participate in claims. The FTX bankruptcy estate is however said to be evaluating options. The FTX estate has begun its creditor repayments that could see more than $16 billion go to eligible creditors across the globe. However, as FTX creditor Sunil Kavuri noted…


  • FTX creditors in several countries, China, Russia and Ukraine included, unable to participate in claims.
  • The FTX bankruptcy estate is however said to be evaluating options.

The FTX estate has begun its creditor repayments that could see more than $16 billion go to eligible creditors across the globe.

However, as FTX creditor Sunil Kavuri noted in a post on X on Feb. 21, the bankrupt crypto exchange is temporarily unable to process distributions to creditors in multiple countries.

In the post Sunil shared, FTX creditors in several countries, including Russia, China, Ukraine, Nigeria and Egypt are currently unable to participate in the distributions.

FTX Claims

A lot of claims are from Jurisdictions not eligible for FTX distributions at the moment which include:

Russia, China, Egypt, Nigeria, Ukraine

FTX is reviewing options

China is the largest with 8% of customers pic.twitter.com/Ts1iToqhAL

— Sunil (FTX Creditor Champion) (@sunil_trades) February 21, 2025

What happens next?

This ineligibility cuts across five regions, with China accounting for the largest share of customers at 8%. Per some user commentary, some Chinese users have reported “disputed status” claims, which Sunil says is also part of the temporarily unavailable distributions.

Notably, the FTX estate is reportedly evaluating its options

FTX announced the commencement of the initial distributions to the group of customers dubbed “Convenience Classes.” This group, in FTX’s Chapter 11 reorganization plan, are those with claims under $50,000. In its announcement on February 18, 2025, FTX said customers would receive their distributions within 1-3 business days.

According to the collapsed exchange’s bankruptcy estate, customers who miss this initial distribution will have to wait until May 30, 2025.

“The next record date for Convenience Claims that have become allowed since the initial record date and have not received their distribution is set for April 11, 2025. The Next Distribution is expected to commence on May 30, 2025,” they posted on X.

FTX imploded in November 2022, with founder & CEO Sam Bankman-Fried later arrested and charged. He was found guilty in November 2023 and sentenced to 25 years for defrauding customers and investors.


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Mawari and Nankai Electric Railway partner for the Digital Entertainment City Namba project

The “Digital Entertainment City Namba” will be the world’s first smart city integrating AI, XR and DePIN. Mawari will deploy edge computing and rendering devices across Nankai’s properties for decentralized streaming. Nankai Electric Railway rail network spans over 100 stations across multiple lines in Japan. In a groundbreaking collaboration, Mawari, a leader in spatial computing…


Mawari and Nankai Electric Railway partner to create the Digital Entertainment City Namba

  • The “Digital Entertainment City Namba” will be the world’s first smart city integrating AI, XR and DePIN.
  • Mawari will deploy edge computing and rendering devices across Nankai’s properties for decentralized streaming.
  • Nankai Electric Railway rail network spans over 100 stations across multiple lines in Japan.

In a groundbreaking collaboration, Mawari, a leader in spatial computing and decentralized physical infrastructure networks (DePIN), has partnered with Nankai Electric Railway Co., Ltd., Meta Osaka Co., Ltd., and e-stadium Co., Ltd. to create the “Digital Entertainment City Namba.”

This ambitious urban development project, set to unfold in Osaka, Japan, promises to be the world’s first fully integrated ecosystem combining artificial intelligence (AI), extended reality (XR), and DePIN technologies at a city-wide scale.

The partnership brings together complementary strengths. Meta Osaka contributes strategic innovation and localized expertise, ensuring the project aligns with the region’s unique cultural and economic fabric.

On the other hand, e-stadium, a Nankai Group company, leverages its focus on e-sports and community engagement to address social challenges and foster a thriving digital culture. Together, these organizations are laying the groundwork for a smart city that integrates advanced technology with everyday life.

Mawari’s role is pivotal, deploying edge computing and rendering devices across Nankai’s properties to deliver decentralized streaming infrastructure. This setup brings computation closer to users, minimizing delays and enabling real-time interactions with 3D AI agents that possess both “body and soul,” as described by the company. The result is a scalable, efficient system capable of supporting a wide range of applications, from entertainment to practical services.

For Mawari, the project represents a milestone in its mission to democratize AI-driven immersive experiences. According to the CEO Luis Oscar Ramirez, “Uniting AI, XR, and DePIN in ‘Digital Entertainment City Namba’ is a landmark moment for the entire industry, demonstrating a clear path to mass adoption with tangible social impact.”

A visionary fusion of technology and urban life

At the heart of the “Digital Entertainment City Namba” project is Mawari’s pioneering technology, which powers real-time 3D streaming of lifelike AI-driven avatars. These avatars, rendered with minimal latency, offer a new level of immersion and interactivity, capable of performing tasks such as guiding tourists, assisting customers, and facilitating human-like communication across language barriers.

Notably, the project builds on Mawari’s extensive experience, having successfully executed over 50 XR projects worldwide since 2019.

By integrating AI, XR, and a decentralized network of edge computing devices, the Digital Entertainment City Namba will transform Nankai’s railway stations and properties into vibrant digital hubs that seamlessly merge virtual and physical experiences.

Founded in 1885, Nankai Electric Railway is one of Japan’s oldest private rail operators, with a network spanning over 100 stations across multiple lines, including connections to Kansai International Airport and the Koyasan World Heritage Site.

Traditionally a transportation powerhouse, Nankai is now embracing a bold vision to evolve its infrastructure beyond mere transit points. Under the leadership of President and COO Nobuyuki Okajima, the company has been working since 2023 to reimagine the Namba area as an “ENTAME-DIVER-CITY” — a dynamic hub of entertainment and co-creation.

This vision gained momentum with the opening of the e-Stadium Namba Main Branch, an e-sports facility, in August 2024 at Namba Parks, a commercial complex operated by Nankai. The addition of Tsutenkaku, a historic Osaka landmark, to the Nankai Group in December 2024 further expands the scope of this digital transformation.

Through the Digital Entertainment City initiative, Nankai aims to weave immersive experiences such as virtual idols, anime characters, and interactive storytelling into these physical spaces, creating a next-generation entertainment ecosystem.

Projected impact of the Digital Entertainment City Namba

The Digital Entertainment City Namba is poised to make a significant impact across multiple sectors.

For tourism, the project taps into Japan’s growing inbound travel market, which saw 23 million foreign visitors in 2023. Multilingual 3D guides and XR content will offer tourists intuitive navigation and immersive cultural experiences, boosting local businesses and elevating Osaka’s global appeal.

Beyond tourism, the initiative addresses Japan’s looming labour shortage, projected to reach 11 million workers by 2040, by creating flexible, remote work opportunities. AI-driven avatars will enable diverse groups, including caregivers, seniors, parents, and people with disabilities, to participate in industries like customer service and tourism through immersive interfaces.

This inclusive approach not only enhances accessibility but also aligns with Japan’s need for innovative workforce solutions.


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Arizona Becomes First State to Pass Bitcoin Reserve Bill

TLDR

  • Arizona House passed bills to invest public funds in Bitcoin and digital assets.
  • Governor Hobbs must sign the bills for them to become law.
  • Arizona could invest up to 10% of its public funds in crypto.
  • The move aligns with growing state and federal crypto reserve efforts.
  • If approved, Arizona could lead states in adopting crypto for public finance.

Arizona has taken a historic step toward integrating cryptocurrency into its public financial strategies. On April 28, the Arizona House of Representatives passed two significant bills aimed at establishing a Bitcoin and digital assets reserve for the state. Senate Bill 1025 (SB1025), which amends existing statutes to allow for a strategic Bitcoin reserve, passed with 31 votes in favor and 25 opposed. A similar measure, Senate Bill 1373 (SB1373), designed to create a broader state-level digital assets reserve, passed with 37 votes supporting and 19 against.

🚨NEW: Arizona becomes the first U.S. state to pass a $BTC reserve bill that allows for up to 10% of public funds to be invested in virtual currencies like Bitcoin.

The bill will still need to pass Democratic Governor Katie Hobbs’ desk in order to be signed into law. https://t.co/8lAJ1V9pop

— Eleanor Terrett (@EleanorTerrett) April 28, 2025

The legislation permits the Arizona State Treasurer to allocate up to 10% of public funds into virtual currencies such as Bitcoin. According to Representative Jeff Weninger, who advocated for SB1025, this move mirrors efforts in approximately 15 other states considering similar initiatives. Weninger explained that while the law grants permission to invest in digital assets, it does not mandate immediate action, allowing flexibility as the digital economy evolves.

Governor’s Approval Remains the Final Step

Although the passage of SB1025 and SB1373 represents a major milestone, the bills require the signature of Arizona Governor Katie Hobbs to become law. Governor Hobbs has previously indicated her intention to veto legislation not accompanied by a bipartisan funding solution to support healthcare services for individuals with disabilities. However, with recent advancements in budget discussions, the outlook for the bills may have shifted.

The strategic Bitcoin reserve would position Arizona as a leader among U.S. states in adopting cryptocurrency for public fund management. It would allow the state to invest in Bitcoin and other digital assets as part of its financial diversification strategy. This development could also encourage further institutional interest in Bitcoin, potentially influencing broader market dynamics.

Broader National Movement Toward Crypto Reserves

Arizona’s move coincides with national discussions around establishing cryptocurrency reserves at the federal level. In March, President Donald Trump signed an executive order proposing the creation of a “Strategic Bitcoin Reserve” and a “Digital Asset Stockpile.” Republican lawmakers, including Wyoming Senator Cynthia Lummis, have introduced legislation aimed at allowing the federal government to hold over 1 million Bitcoins, partly through assets seized via civil or criminal forfeiture.

The BITCOIN Act is back. pic.twitter.com/WNeU6SWPj3

— Senator Cynthia Lummis (@SenLummis) March 11, 2025

The momentum behind both state and federal initiatives indicates growing recognition of digital assets within the public finance sector. If Arizona’s bills are signed into law, the state will serve as a model for other jurisdictions exploring similar cryptocurrency investment frameworks. Meanwhile, New Hampshire is advancing comparable legislation, having passed a bill in its House of Representatives that is awaiting a Senate floor vote.

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