Blackrock buying a ton of bitcoin is like an arrogant guy taking a massive dose of mushrooms thinking he's tough.
They have no idea what they just swallowed.
Discussion
They have a clear understanding of what they have. Most of the players in the ETF space understand well.
indeed, some more than others, those who dont likely outsource to those who do.
like others, im quite concerned about the consolidated custodial risk at coinbase.
Good analogy. I don’t think they were ready for this orange heroic dose.
6102 aside, what do you suppose is blackrocks worst case? how do they get side ways on this?
seems like they are in a great rent seeking position.
It's not totally clear at the moment, but dealing with bitcoin changes your incentives. It's transformational
do you hve any wild ass guesses? those are always fun
My hope is that they get short squeezed, but I don't think they can because of the legal structure
hm, they arent short and they have a defined open and close price which supports your intuition about legal structure.
their market makers and trading desks carry big locate risks - the mms are short the price until they locate the coins.
something akin to a short squeeze is a fork and that could definitely impqct black rock. they have discretion over which fork the trust adopts. if they adopt the wrong fork according to the network they will be long the wrong thing and short the right thing. even still this would just hurt though a reduction of aum not a loss of collateral.
there then is the big issue, loss of collateral. i do not like their custodial concentration at coinbase. its irresponsible to not diversify secure implementations. like keeping all cash at one bank.
I've never seen an arrogant guy take a massive dose of mushrooms.
What are the ramifications?
Asking for an arrogant friend 😉
trojan horse deployed