Your role shapes the risk

Go back to the corner shop and its fruit stand. Lots of people are part of that small world: the owner, the manager who chose to put the stand outside, the staff working the shift, the customers, people walking by, the bank that lent the shop money, and the company that insures it. When an apple is stolen, the event is the same for all of them. What it means for each of them is not.

The owner loses money. The manager might have to explain the decision. The staff might be asked to keep a closer eye on the stand. The insurer might pay a claim, and might raise the price of insurance next year. The bank only worries if losses grow big enough that the shop can’t repay its loan. It’s the same risk, with different consequences depending on where you stand.

Digital assets work the same way. A drop in Bitcoin’s price means one thing to a firm holding Bitcoin for its clients, another to a firm that owns Bitcoin itself, and another to a lender holding Bitcoin as security for a loan. That’s why you always start with your role before you list any risks. Your role in digital assets walks through each one.