We still hear talk how cryptos and especially bitcoin compares to major Financial Disasters in the history. Usually the comparison is made with the following Disasters.
Tulip Mania. A classic investment bubble that occurred in the 17th century in Holland.
South Sea Company. A British company of 1700’s , the incident is known as the South Sea Bubble.
WorldCom. A telecommunication giant, with accounting fraud of $3.8 billion, probably the largest in history.
Dot com. A bubble which occurred around 2000 when there was huge commercial growth of the Internet.
The above cases are the most common Financial Disasters people refer too when they compare with crypto currencies.
Also, the incident with MtGox is a popular subject. Mt Gox, a popular bitcoin exchange, had huge technical problems and bitcoin withdrawals were halted, causing a big drop of the bitcoin price on the exchange.
However, we never hear a comparison with the so called Cyprus Financial Crisis, or, do we?
In 2013, hair cut was imposed on ALL accounts held at Laiki Popular Bank. Anyone who had more than 100K Euro in their account the EU and the Cyprus Government just took the money away, that is, if the account had 500K it was left with 100K. Thousands of account holders lost great sums of money, some lost millions. If the account holder had also a debt this remained unaffected or if the account holder was a company and held in the account money to cover expenses such as VAT and other, the obligations remained. Capital controls were also imposed, were one could withdraw certain amount per week and not being able to transfer money.
Maybe the Cyprus Financial crisis is not compared to crypto currencies is because crypto currencies favour in this case and may be a solution for income protection in years to come. Lack of confidence by some people can be and will be, sorted out soon.