Risk Series, Part 3: Uncontrollable Risks | Narrated
from Monochrome Hosted by monochrome.co
In the first article of our Risk Series, we outlined several frameworks which can be used to evaluate risk, such as the Value at Risk (VaR) and the Standard Risk Measure (SRM) frameworks, defined systematic and idiosyncratic risks and the four different categories Bitcoin’s risks fall under. Following this, in our second article, we evaluated the overall severity of Bitcoin’s idiosyncratic risks through the use of a risk framework adopted from Australia’s prudential regulator, the Australian Prudential and Regulation Authority (APRA), and developed risk mitigation plans for many of these risks. When investing in exotic assets, investors would be wise to tread with caution. However, this can lead to investors worrying about situations or circumstances that, while potentially highly detrimental, have a low probability of occurring. Whilst Bitcoin has uncontrollable risks that mirror some of these criteria, and which should not be underestimated, there are more immediate risks that should be dealt with. In this piece, we look at some of the risks of investing in Bitcoin that are beyond mitigation or are impracticable to mitigate, which we define as uncontrollable risks. Furthermore, conclusions will be drawn to determine whether or not these uncontrollable risks may become controllable in the future. Read the original article here.
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