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What Does 'Risk Appetite Inflation' Mean?

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[ SLANG ][ CRYPTO ][ PSYCHOLOGY ]

The gradual escalation of the size and riskiness of trades a person is willing to make, driven by a string of earlier wins that recalibrate their sense of normal risk upward without them consciously deciding to take on more.

REAL-WORLD EXAMPLE

"Every win made the next bet feel a little more reasonable until the bet that finally wasn't."

LORE & ORIGIN

Named in trading-psychology writing around 2022 to describe how winning streaks specifically โ€” not losing ones โ€” are often the more dangerous driver of eventual blowups, since they inflate risk tolerance gradually and invisibly.

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2022
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2022-2026 (Permanent Trading Vocabulary)
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