What is a bank run? Scenarios in the crypto world 🏦💸

Question

A bank run or "bank run" is basically a bank panic. It occurs when many customers rush to a bank to withdraw their money at the same time. All scared. People lose trust and rumors spread like wildfire. Bankruptcy seems imminent 🚨

Anatomy of a bank run 📉

Panic spreads quickly. People want their money now. Banks never keep all the cash; it would be impossible. They lend and invest. When everyone demands their money at once... chaos. The bank runs out of liquidity. Imminent collapse 💥

Bullfights usually arise from:

Severe economic crises 📊
Soaring inflation 💹
Political chaos 🏛️
Distrust in banks 🔍
A bank with specific problems 📉

To avoid this disaster, governments do things. It seems to work most of the time. They create liquidity policies, deposit insurance, and transparency rules. It's not always perfect, but it helps 📋

When crypto panics 🌐

The crypto world is not immune. Not at all. The last few years have been a rollercoaster of collapses. It seems that no one learned the lessons of traditional banking 🔥

In 2022, FTX experienced its own hell. Accusations against Alameda Research and boom... $6 billion vanished in 72 hours. Too much for any platform. Withdrawals were suspended. Everything collapsed 📱💔

What scares about crypto is that:

There is almost no regulation 📜❌
No insurance. Nothing. 🛡️❌
There's no one to save you in a crisis 💧❌

When crypto panics 🚀→🔥

The crypto panic arises for several reasons:

Crisis of confidence 👁️: A rumor, a hack, and everyone runs to the door. Fast.
No liquidity 💦: The market is falling, people want cash. Now.
Fear of breaking 💣: Speculations become self-fulfilling prophecies. Ironic.

The consequences are brutal. Many platforms have gone up in flames. Billions lost. Dreams destroyed. The list is long and painful 📉🌑

The most serious platforms try:

Save reservations. Quite a few.
Improve security. Constant.
Show what they do. Transparency.

2023 brought new scares. It doesn't seem like the cycle will end soon. Panic remains latent, especially when the global economy seems to be teetering 🌍

In the end, the runs are real threats. In banks and in crypto. Choose carefully where you put your money. Understand the risks. Not all shelters are safe 🧠💎

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