Phase 1: ETF-Based Program
Start with ETFs (IBIT, FBTC) to get the program operational. This is the fastest path to offering bitcoin in NQDC.
From: Bitcoin for Institutions
⚠️ It is unacceptable to view a bitcoin payoff today as worth anything less than its current USD equivalent on an apples-to-apples basis with a fiat-denominated bond. These estimates assume no further currency debasements, which is a highly unreasonable assumption.
From: Bitcoin Requires a Deflationary Mindset
Collateralized Debt
Assets held as collateral (homes, cars, retirement accounts) back loans. When LTV ratios breach minimums, borrowers must pledge more collateral or face liquidation.
From: Bitcoin for Institutions
Key Insight from Bitcoin for Institutions:
3. Institutional custody failures could be catastrophic —potentially destroying trillions in value and taking down the financial system.
Chapter: Bitcoin Custody Requires a Higher Understanding of Tradeoffs
The Problem
Pension managers only saw asset returns from investment consultants. Everything was in an "asset-only framework" that defined benchmarks, strategies, and the goal of "beating the S&P 500."
From: Bitcoin for Institutions
ℹ️ No node or even group of nodes has the power to change the rules of the protocol, nor can they be exempted. Every node does its own validation, but it is part of the larger network. A node that wants to run different rules is free to do so, but they are unlikely to be able to spend their version of bitcoin as other nodes will not recognize their coins as valid.
From: Bitcoin is a Bearer Asset
It is a misconception that the game is to build the biggest stack. The game is to accumulate the most powerful form of capital . While all bitcoin is treated as fungible, the truth is that the power of the capital is determined by its owner.
From: Introduction
Counterparty Risk
Traditional valuation methods hide the significant counterparty risk that comes with debt-based financial instruments.
From: Bitcoin for Institutions
Knowing one can just sell everything they own and put it on a 12-word seed and go anywhere they want in the world is a level of individual sovereignty previously unavailable to human beings .
From: Bitcoin is a Bearer Asset
Key Insight from Bitcoin for Institutions:
1. Bearer assets derive ownership from possession —whoever holds it owns it, without requiring registration or identity.
Chapter: Bitcoin is a Bearer Asset
Career Risk
A CFO telling the CEO "the pension is doing great" when bonds lost 30% was too much career risk - even if liabilities also dropped 30%.
From: Bitcoin for Institutions
Tax Deferral
Taxes are deferred until distribution, allowing bitcoin gains to compound without annual tax drag.
From: Bitcoin for Institutions
Key Insight from Bitcoin for Institutions:
3. "Pulling the goalie" is the right analogy - increasing volatility through bitcoin actually reduces the risk of not meeting obligations.
Chapter: Pensions
Low Interest Rates
Convertible bonds often have near-zero coupon rates because investors want exposure to potential equity upside.
From: Bitcoin for Institutions
The "1" in front of the bitcoin address told us that Coinbase was holding the bitcoin for the ETF in "pre-Segwit" addresses . The potential danger this signals is highly concerning.
From: Bitcoin Custody Requires a Higher Understanding of Tradeoffs
ℹ️ Market Cap Explosion: Strategy's market capitalization has grown from approximately $1 billion to nearly $100 billion, driven primarily by their bitcoin holdings. They await S&P 500 entry despite meeting the criteria.
From: Strategy (Balance Sheet Strength)
Since the launch of the Bitcoin Core protocol in 2009, more and more people have decided that it is important to understand "this thing." It turns out that understanding bitcoin is like learning to play multiple instruments at the same time .
From: Bitcoin Requires More Patience and Time than Institutions Have
📝 Long/Short Strategy: It isn't hard to imagine a fund that buys Battery's loans and sells equivalent loans from traditional lenders. The only question is how much capacity Battery can create. We might have to wait a few cycles before bitcoin becomes less concentrated to see the full utilization potential.
From: Structured Credit
Present Value Illusion
Using Present Value as a benchmark masks the debasement of expected future payoffs and colors the incentives of debt issuers.
From: Bitcoin for Institutions
Key Insight from Bitcoin for Institutions:
1. Traditional collateral has failed - the 2008, 2022, and 2023 crises showed that housing, gilts, and treasuries can rapidly become unreliable.
Chapter: Structured Credit