Updated: Apr 24, 2021
Humans deal with new risks in a very similar way. Both Covid-19 and Bitcoin are new events in our lives and it is fascinating how similarly we reacted to them. Initially we were afraid of these new "things" but then we just got used to them, accepted them and here we are investing on Robinhood and socializing, even thought the risk hasn't changed.
In 2020 we witnessed two phenomenal events. On one hand humanity lived through its first global pandemic in the age of internet, and also we saw how the price of Bitcoin skyrocketed to the skies. On first look those two events doesn’t seem to have much in common, and this is true except that both are great example how people handle risk. In both cases we can observe how people are accepting the risk and underestimated even though objectively it is the same (if not higher).
What is risk?
In our mind risk is the probability of a given outcome to happen. In reality we are concerned with bad outcomes like getting infected with Covid-19 or losing money on the stock market. Calculating risk is also extremely easy