I liked the article due to the other Druckenmiller ideas. It does seem to underestimate liquidity in Bitcoin. It would be interesting to know what the total spot (OTC and exchange volume) Vs futures is for Bitcoin.
The inelastic or fixed short term supply characteristic of Bitcoin is not unique and many commodities have this feature.
The reason I think of the rehypothecation issue is that it has occurred in the past with subprime and also metals. Basically the collateral is used for further purchases of risk assets, also usually thought of as a hard asset (houses in subprime, metals in the Chinese rehypothecation episode in 2014).
You asked in another thread how stablecoin deposits can earn 9% pa. Maybe that is one way, I have no idea really, maybe they do it in some other less risky manner. But when something is good, it's almost irresistable for investment bankers to crank out more. Asset backed tokens appear to me to have potential for rehypothecation, so potentially are margin accounts on crypto and futures on crypto. It would be interesting to know the degree of rehypothecation in Bitcoin instruments currently (and hence the leverage in the system).
https://www.wsj.com/articles/banks-a...ans-1402093846
https://papers.ssrn.com/sol3/papers....act_id=1366171
The inelastic or fixed short term supply characteristic of Bitcoin is not unique and many commodities have this feature.
The reason I think of the rehypothecation issue is that it has occurred in the past with subprime and also metals. Basically the collateral is used for further purchases of risk assets, also usually thought of as a hard asset (houses in subprime, metals in the Chinese rehypothecation episode in 2014).
You asked in another thread how stablecoin deposits can earn 9% pa. Maybe that is one way, I have no idea really, maybe they do it in some other less risky manner. But when something is good, it's almost irresistable for investment bankers to crank out more. Asset backed tokens appear to me to have potential for rehypothecation, so potentially are margin accounts on crypto and futures on crypto. It would be interesting to know the degree of rehypothecation in Bitcoin instruments currently (and hence the leverage in the system).
https://www.wsj.com/articles/banks-a...ans-1402093846
https://papers.ssrn.com/sol3/papers....act_id=1366171
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