If they play rehypothecation games, they will eventually be blown away.
On sovereign use case of #bitcoin people will automatically gravitate towards more easy to use services.
How so? Fractional reserve banking is already rampant, and there's nothing I can see about Bitcoin that will make that stop.
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Try to short a deflationary asset, which is traded 24/7 globally, which is easy to self custody.
What that have to do with fractional reserve lending? If anything, that practice is more profitable with a deflationary asset