They might want it to fail for the normies. That way they can say, "see how bad Bitcoin is."

I think rehypothecation ....meme coins....crypto etc is all 100% a given. The road and "end" we see of what bitcoin can and will be must have all these things. Everything and I mean everything will have to be means tested. I appreciate what you are doing but human psychology and incentives have not changed. Bitcoin will be played with uppppp and down and in between.... big crashes and historical events yet to come.... from there we grow and learn.

In the game of rehypothecation, the thing BlockFi, Celcius, Genesis, et al got wrong was the crucial underpinning of basic margin lending— the maintenance margin. They all took a common TradFi function, margin lending, and made up a new fancy name — over-collateralized lending. They acted as if they were doing a new fancy Bitcoin/Crypto thing, but really it was just traditional margin lending. Unfortunately, these new players failed to understand the importance of understanding margin basics: margin values vs. maintenance margin. Especially when dealing with highly volatile assets like Bitcoin. When you set your maintenance too low it’s a guaranteed margin call on a security like Bitcoin w/ a 50-200 vol. While this works in the favor of the house in the short-run, in the long run it’s disastrous. What started as an easy picking 4-12% appearance of a risk-free house always wins turned into a house of over levered & rehypothecated cards. Leverage kills.

Good reading, thanks Preston. I suspect banks will have a clause along the lines of ‘return the assets (bitcoin) OR the dollar equivalent’ in the case of distress. However this may also be the return to sound money banking as failures result in people demanding 100% deposits

love it - keep doing the lords work- can you please also update us with a list of recommendations for books you are you people should aim to read this year?

Just saw your why bitcoin decompression presentation on youtube. That was a great high level overwork. Signal is strong.

Thank you. I ran it through AI and just sent out letters to my senators and representative.

This. Stop trusting strangers with your life savings. Banks are retarded in the age of trustless money.

Thanks Preston

Proof of reserves or BUST

I imagine etf can be repo’ed in its current form. I guess it’s less critical as spot but it could cause etf discount premium to change widely if there are some repo fail.

IF BITCOINERS DON'T ACT, THESE GUYS WILL

Aw come on Preston, it’s a free market (or at least should be). Rehypothecation of bitcoin is inevitable. Best we can do is educate people and push them towards self-custody or at least companies that show proof of reserves.

Full throttle or not at all: make the banking license contingent on never rehypothecating bitcoin .. if they do then close the doors Reality is they will, irrespective of “rules” and “guidelines” and “law” .. they’ll need to have their BlockFi/Celsius/Genisis moment What price an education 🤷‍♂️

I knew you were a grandma lover

Truth bitcoin doesn’t need external laws but it’s important to flag the implications of a continuing banking bad practice on our families, communities and economies. Much thanks.

Well said.

It’s astounding how the powers that be are not already fully across this 🤔