People who hate Bitcoin are plundering the world with private credit Author: Jeff Park Compiled: Chopper, Foresight News In the financial industry, every generation invents a new tool to package the worst of nature into seemingly cautious products. The 1980s were junk bonds, cloaked in the guise of 'democratization of capital'; In the 1990s, emerging market debt was packaged as a noble cause to help developing countries integrate into the global community; In the 2000s, structured credit was so complex that even designers couldn't figure it out before its collapse. These 'innovations' have one thing in common: they create artificial solutions (such as liquidity conversion) for real problems (such as insufficient growth), which ultimately lead to disasters due to excessive proliferation. Private credit is the latest version of this story, and perhaps even the most sinister one. Because unlike its predecessors, it deliberately made the liquidation before the risk outbreak completely invisible from the beginning of its design, and by the time it was discovered, the consequences were irreversible. Recently, BlackRock directly reduced the face value of two private credit loans from 100% to 0 in one go, with one of them taking less than a month. This doesn't seem like a technical error in valuation methods, but more like a confession of an incentive mechanism error. How did we get to this point? The crisis is not the root cause, it is the cover up of the truth that created it. The mainstream narrative of the industry is as follows: after the 2008 financial crisis, banks were constrained by Basel III and dared not lend, so non bank institutions stepped forward to fill the gap and serve small and medium-sized enterprises, which was the inevitable choice of the market. The more real situation is that the regulatory framework after 2008 did not truly eliminate risks, but actively gave birth to a shadow system that assumed the same underlying risks but avoided the regulation originally used to constrain risks. The size of the private credit market has expanded from $46 billion in 2000 to approximately $2 trillion today. This money did not appear out of thin air, nor did it accidentally flow into pension or insurance companies. It is precisely delivered to institutions with large amounts of funds, long-term lock-in, and willingness to accept opaque valuations. Its structure is exactly the same as when the 2008 financial crisis broke out, with only one significant difference. In the 2008 subprime mortgage collapse, losses were mainly concentrated in households that borrowed recklessly and banks that lent money; Once private credit collapses, the losses have no boundaries, and the money comes from life insurance policyholders and pension beneficiaries, that is, ordinary people. The socialization of losses that angered the public in 2008 was at least preceded by a period of private gain. And private credit: profits go into the pockets of fund managers, while losses are socialized to the retirement accounts of teachers, nurses, and civil servants, who have never agreed to provide a safety net. Even worse, the industry is not satisfied with just harvesting institutions and is now targeting retail investors. Since 2025, private credit ETFs have been on the rise, but the problem is even more serious: illiquid assets that are loaded into ETFs will not become liquid. Just transferring the bomb of 'redemption wave but unable to sell assets' from professional institutions to the securities accounts of ordinary investors. This is the reality that is happening. Asset allocators who dislike Bitcoin have exposed everything. In the past few years, I have been recommending Bitcoin to institutions everywhere and found a surprising pattern: those who reject Bitcoin often fervently pursue private credit. This is not two different perspectives on reading questions, but the same mindset. Their opposition to Bitcoin sounds very "cautious": too much volatility, unexplained drawdown, and inability to value without cash flow. But the underlying message is: the price of Bitcoin is too honest. Real time disclosure, visible to everyone, wrong is wrong, cannot be hidden. On the contrary, private credit is the opposite: valuation changes are extremely slow, and fund managers' quarterly 'smoothing' without a liquid market to expose lies. The lock up period is long enough to allow decision-makers to be promoted, switch jobs, or retire. The so-called 'exclusive project channel' is just an excuse for the lack of effective pricing competition. The true trustee will pursue the truth, while these allocators pursue not having to face the truth. This is not risk management, it is the opposite of risk management, but wearing a professional cloak and completely ignoring the interests of beneficiaries. The AI boom has turned it into a systemic risk. Morgan Stanley estimates that from 2025 to 2028, global data centers will require $2.9 trillion in capital expenditures, of which approximately $800 billion will need to be covered by private credit. This has transformed private credit from a lending market into a critical infrastructure for the most important technological transformation in the coming decades. Typical case: In October 2025, Meta and Blue Owl completed a $27 billion data center financing, the largest private credit transaction in history. The money comes from PIMCO, BlackRock, and ultimately from pension and insurance companies. The cruelty of this cycle: ordinary workers' retirement funds are used to fund automation AI， Conversely, it replaces the worker's own work. Private credit distorts the cost of capital and lowers the value of labor. Now, nearly $50 billion in private credit flows into the AI field every quarter. The financialization of AI infrastructure, along with the replacement of the workers who support it, forms a closed loop: the left hand cuts the right hand. Liquidity conversion is stealing time. I am not saying that credit itself is guilty, nor am I saying that all private credit institutions are bad. Credit has always been a probability game, with bad debts and mismatches occurring in every era. The key difference lies in: who truly bears the loss? The bank has issued bad debts, which are on its own balance sheet and are subject to regulation. Faced with a run on the bank and the clearing of equity, there is a risk of real money and silver; Private credit managers earn performance commissions as incentives to encourage you to bet, not to encourage you to win responsibly. By the time the loan is cleared, the manager has already earned enough money. Every financial project ultimately leads to a question: who will bear the costs that no one wants? The 'brilliance' of private credit lies in answering this question with utmost elegance: benefits flow upwards and backwards: towards the elderly, retired, and beneficiaries of long-term capital, costs flow downwards and forwards: lowering wages, freezing recruitment, delaying investment, and distorting the capital cost of the entire economy. Private credit is stealing time. This is the long-standing liquidity conversion in the financial sector, but it has been stripped of its disguise. They bear risks that they do not need to bear through tools they cannot choose and at prices they cannot foresee. The lock up period ensures that they cannot exit, the lack of public valuation ensures that they cannot protest, and the quarterly valuation smoothing mechanism ensures that by the time the final bill arrives, no one can be found responsible. It doesn't look like plunder, it just looks like 'steady gains', the two are almost indistinguishable until the moment of collapse. Although this story has been around for a long time, its novelty lies in its large scale, low transparency, and the astonishing success of this asset class built on a false sense of security, which has even convinced the world's most cautious capital managers. There is no type of asset in the world that can be valued at 100% for three consecutive months and then reset to zero overnight. If this doesn't count as theft, then I really don't know what counts.