With yesterday’s US and UK stock market plunges (already dubbed “Black Monday 2020”) topping the global market instability of the past few months, many of us are having flashbacks to the 2008 financial crisis.

For a couple of years now, economists have predicted an impending downturn in financial markets (“likely to hit before the end of 2021”). Other economists have even warned that the way we dealt with the 2008 economic recession (bailing out the banks and not the economy at large) means that the economy is still in the same bad shape, making a follow-up crash a given.

Evolutionary Psychology and Investor Behaviour

Unfortunately, advance notice hasn’t lessened the shock of the current market upheaval or our fears about its projected human impact.

The Caveman Approach

By our very nature, our brains are wired to respond to crises, firstly, by activating our ‘reptilian brains’ that operate fight/flight responses. This primitive part of our brain is reliable to respond quickly to situations like ‘caveman gets attacked by sabre-toothed tiger’. At the same time, it tends to be rigid and compulsive resulting in irrational and unhelpful behaviour when we’re confronted with complex modern problems.

Across the board, we’re seeing people responding to the current financial crisis (a highly complex situation) with this (simple) mode of action. Fear and panic are getting the best of many, triggering them to sell off shares as market prices are at a ten-year low.

Bitcoin and cryptocurrency markets haven’t been immune to the shock, and understandably so. The Bitcoin market price, like any other tradable asset, fluctuates according to the supply and demand ratio. As can be expected, any factor of global uncertainty or risk could trigger investors into panic selling.

Activating your Rational Brain

While the behaviour of ‘the human herd’ is compelling, to follow suit could lead you to make decisions you’ll regret for a very long time. Letting go of your holdings during a selling frenzy could mean locking in a loss you’ll never recover. It could also mean missing out on the upside once markets stabilise and prices recover.

For starters, we can conclude that acting from a state of panic is probably the worst thing you can do. Sticking our heads in the sand is no option either. How then should we respond to set ourselves up in the best position to weather out this storm?

The key to responding to distressing situations in a helpful way is to press the ‘pause button’ on our impulsive reptilian brains, and activate the part of our brain that has evolved to control higher executive thought - the neocortex.

This ‘new mammalian brain’ has allowed humans to develop language, abstract thought and imagination needed for tasks like thinking, reasoning, and solving math problems. Complex situations are layered with subtlety and nuance, and that’s what the neocortex is best at.

Given the intricate nature of financial markets, it’s not difficult to see which part of your brain is best geared to set you up for success.

Keep Calm and Focus on the Fundamentals

Price is nice, but building real utility and value is far more important. I focus on building #BSV to be the global enterprise #blockchain. Price will follow more meaningfully as we build real use. — Jimmy Nguyen (@JimmyWinMedia) June 4, 2019

In the case of financial markets, we can activate our advanced reasoning by choosing to focus on the facts instead of responding impulsively to the temporary distress.

The facts of the Bitcoin and cryptocurrency industry are the same as before: most cryptocurrencies are little more than speculative tokens with zero utility - a crash waiting to happen.

Bitcoin SV, on the other hand, is a technology that’s laying the foundation for the Fourth Industrial Revolution.

At last month’s CoinGeek conference, we watched enterprises announce the big data applications they are building on and migrating to Bitcoin SV. And let us not forget Metanet, the Bitcoin SV Internet that’s positioned to resolve many of the dilemmas of the existing Internet model. These developments alone indicate that Bitcoin SV is about to bring about a seismic shift in the way we do business and society, and we’ve only just entered into Bitcoin SV’s second year of independence.

And so, while a period of uncertain market conditions lies ahead, let’s stay calm and focus on the fundamentals: Bitcoin SV is fighting fit and ready to weather this storm - and the next.