""If a borrower posts bitcoin as collateral, this loan would automatically become the most senior loan. A person will let any other asset go before relinquishing their bitcoin to a lender.""
— Brian Hirschfield
From: Structured Credit
Key Insight from Bitcoin for Institutions:
2. There is no bailout in bitcoin —mistakes that make bitcoin unspendable are permanent and irreversible.
Chapter: Bitcoin Custody Requires a Higher Understanding of Tradeoffs
Limited Bailouts
There are only so many more bailouts available. Given the state of fiat money, we shouldn't be overconfident in pensions' lifespan.
From: Bitcoin for Institutions
Key Insight from Bitcoin for Institutions:
5. Convertible debt enables leverage - Strategy pioneered using corporate finance to accelerate bitcoin accumulation.
Chapter: Strategy (Balance Sheet Strength)
Key Insight from Bitcoin for Institutions:
2. The power of bitcoin as capital depends on its owner—not just the quantity held.
Chapter: Introduction
A key determinant of whether it pays to pull the goalie is how much time is left in the game . According to Brown/Asness, it made sense to pull the goalie with six minutes left - an uncomfortably long time that seems unintuitive but maximizes winning probability.
From: Pensions
Allocation Limits
Consider capping bitcoin allocation at a percentage of total deferred compensation to manage risk.
From: Bitcoin for Institutions
Precision Allocation
Small, precise allocations can generate significant alpha without dramatically changing the fund's risk profile.
From: Bitcoin for Institutions
If you are a typical institution wanting to use bitcoin, chances are that you are unfamiliar with bearer assets. You may be wondering why you are even reading about them. A lot of the confusion that exists around bitcoin stems from the extraordinary property that it has of being a bearer asset.
From: Bitcoin is a Bearer Asset
Phase 2: Build Custody Capability
Develop internal bitcoin custody infrastructure or partner with institutional-grade custody providers.
From: Bitcoin for Institutions
ℹ️ Bitcoin is already less inflationary than gold, and will eventually add no new stock to the world's supply. When inserted into a monetary landscape of vastly inflationary monies like fiat currencies, stocks, bonds, and real estate, the supply-capped bitcoin will continue to absorb the monetary energy of its peers.
From: Bitcoin Requires a Deflationary Mindset
Risk Disclosure
Clear disclosure of bitcoin's volatility, custody risks, and the unsecured nature of NQDC benefits is essential.
From: Bitcoin for Institutions
BlackRock's ETF would represent 10% of that value, or $2 trillion . That's $2 trillion of value on balance sheets of companies all over the world.
From: Bitcoin Custody Requires a Higher Understanding of Tradeoffs