A number of cryptocurrencies are considered by experts to be anti-fragile, notably Bitcoin (BTC) and Ethereum (ETH). Whether an asset is anti-fragile or not depends on a number of factors. These factors include:
Status of expert opinions about the asset
- Volume of using the asset
- Value of the asset
- How long the asset has been on the market
- How the entity reacts in times of crisis
- Regulations and laws related to the asset
- Uses and bindingness of the asset
Some cryptocurrencies tend to experience price spikes at times when uncertainties shake the cryptocurrency markets. It is a common belief among experts, analysts and investors that cryptocurrencies with this tendency are a gold-like safe haven in the markets.
Is Bitcoin an Anti-Fragile Asset?
One of the most important features of anti-fragile assets is that they tend to strengthen even in the event of a major crisis or disruption. In this regard, experts and analysts point to Bitcoin's resilience despite the dramatic collapse in 2018, when prices fell by almost 80 percent in one year. In the context of this example, Bitcoin is an anti-fragile asset. Cryptocurrencies such as Bitcoin and Ethereum are the most prominent examples of anti-fragile assets. These assets, which have maintained their dominance in cryptocurrency exchanges that have gone through many bottlenecks even after years, have been the harbors that investors trust even in the most difficult times.
The first example of anti-fragile assets in history is gold. Although centuries have passed, gold and similar precious metals have not lost their importance and have always been preferable investment instruments.
How was the Concept of Anti-Fragile Used First?
The concept of anti-fragile was used by Nassim Nicholas Taleb first.
One of the most important elements of Taleb's anti-fragile system is debt avoidance. Taleb, whose full title is "Anti-Fragility: Things That Gain From Disorder-Antifragile", Taleb provides several examples of how the world and its population can become less fragile. One of Taleb's key insights is that "When you don't have debt, you don't care about your reputation.". According to Taleb, the prerequisite for dealing with political fragility is to have zero debt. According to him, a non-fragile trading strategy can make an asset more attractive even in a turbulent market.
Through his work and ideas, Taleb has contributed to a clearer characterization of anti-fragile assets. Thanks to his research and findings, Taleb was able to state that there are still assets that can be invested in, even in markets that are not optimized and are going through difficult times.
Some investors and analysts mistakenly believe that Bitcoin is so resilient only because a certain number of people believe in it. But the anti-fragile thesis is that Bitcoin has become stronger and stronger after these events.
What Are the Features of Anti-Fragile Cryptocurrencies?
Anti-fragile cryptocurrencies have some common features. These common features are as follows:
- Reacting Well
- Diversity
- Self-Regulation
- Achieving Growth with Minor Damage
- Variability and Flexibility
What ıs Reacting Well?
Anti-fragile cryptocurrencies mean that they can react stronger and better when they are in situations of uncertainty and stress. This suggests that anti-fragile cryptocurrencies can thrive rather than resist.
What Is Diversity?
The diversity and distribution of a cryptocurrency mean that despite a crisis in one possible region, other regions can be supportive and compensate for the damage.
What Is Self-Regulation?
Anti-fragile cryptocurrencies are self-organizing and work in harmony. This makes them more resistant to external factors.
What Is Achieving Growth with Minor Damage?
Anti-fragile cryptocurrencies have been observed to benefit and grow further after small losses. This suggests that anti-fragile cryptocurrencies tend to grow as they are exposed to stressful conditions.
What Are Variability and Flexibility?
Anti-fragile assets are able to adapt and adjust to changing conditions.
Why Are Anti-Fragile Assets More Resilient?
The main reason why anti-fragile assets are trustworthy is that they exist on a decentralized blockchain, which by its very nature runs on thousands of computers and cannot be shut down from a single center. Anti-fragile is therefore much more than just the robustness of any cryptocurrency, and can demonstrate not only the ability to withstand a crisis, but also the ability to better weather it. The omnipresence of anti-fragile assets in the market means that at the end of the day, investors have a safe haven to rely on.