People who dislike Bitcoin are using private credit to "plunder" the entire world.

Written by: Jeff Park

Translated by: Chopper, Foresight News

In the financial world, each generation invents a new tool that disguises the worst instincts as seemingly prudent products.

The 1980s saw junk bonds, cloaked in “capital democratization”; the 1990s had emerging market debt, packaged as a noble effort to help developing countries integrate into the global economy; the 2000s introduced structured credit, so complex that even its designers couldn’t fully understand it before it collapsed.

These “innovations” share a common trait: they create artificial solutions to real problems (like insufficient growth), such as liquidity transformation, which ultimately leads to disaster when overused.

Private credit is the latest—and perhaps most insidious—version of this story. Unlike its predecessors, it was deliberately designed from the start to hide the risks of liquidation before they explode. By the time the problems are discovered, the consequences are often irreversible.

Recently, BlackRock directly wrote down the face value of two private credit loans from 100% to zero, with one happening in less than a month. This doesn’t seem like a technical valuation error; it appears to be an honest admission of flawed incentives.

How did we get here?

Crisis isn’t the root cause; it’s the cover-up that creates it.

The mainstream narrative is that after the 2008 financial crisis, banks, constrained by Basel III, stopped lending, and non-bank institutions stepped in to fill the gap, serving small and medium-sized enterprises—a market-driven response.

A more accurate picture is that the regulatory framework post-2008 didn’t eliminate risk but actively fostered a shadow system that bears the same underlying risks while avoiding the regulations meant to constrain them.

The private credit market grew from $46 billion in 2000 to approximately $2 trillion today. This money didn’t appear out of nowhere nor did it randomly flow into pensions and insurance companies. It was precisely channeled to large, long-term capital institutions willing to accept opaque valuations and lock in funds for extended periods.

Its structure mirrors that of the 2008 crisis: the losses from subprime mortgages were concentrated among reckless households and banks; but if private credit collapses, losses are unbounded, coming from life insurers, pension beneficiaries—ordinary people.

The socialization of losses that angered the public in 2008 had at least a period of private gains beforehand. Private credit, however, funnels profits into fund managers’ pockets while socializing losses into teachers’, nurses’, and civil servants’ retirement accounts—people who never agreed to bear that risk.

Even worse, the industry is no longer content with just exploiting institutions; it’s now targeting retail investors. Since 2025, private credit ETFs have surged, but the problem has worsened: illiquid assets packaged into ETFs don’t become liquid. It’s just shifting the “redemption wave meets unsellable assets” bomb from professionals to ordinary investors’ brokerage accounts.

This is the reality unfolding.

Asset allocators who dislike Bitcoin have exposed everything.

Over the past few years, I’ve recommended Bitcoin to institutions everywhere and discovered a startling pattern: those who reject Bitcoin often obsessively pursue private credit. These aren’t two different viewpoints but stem from the same mindset.

Their reasons for opposing Bitcoin sound “prudent”: high volatility, unexplained drawdowns, no cash flow to value.

But the underlying message is: Bitcoin’s price is too honest. It’s publicly available in real-time, visible to everyone—if you’re wrong, you’re wrong; you can’t hide it.

Private credit, on the other hand:

• Has extremely slow valuation changes, smoothed quarterly by fund managers
• Lacks a liquid market to expose lies
• Has lock-up periods long enough for decision-makers to get promoted, change jobs, or retire

The so-called “exclusive project channels” are just excuses for the lack of effective pricing competition.

True trustees seek the truth, but these allocators prefer not to face it. It’s not risk management; it’s the opposite—disguised as professionalism, completely ignoring beneficiaries’ interests.

The AI boom turns this into systemic risk.

Morgan Stanley estimates that from 2025 to 2028, global data center capital expenditures will total $2.9 trillion, with about $800 billion financed through private credit. This has transformed private credit from a lending market into a critical infrastructure for the technological transformation of the coming decades.

A typical case: in October 2025, Meta and Blue Owl completed a $27 billion data center financing—the largest private credit deal in history. The funds came from PIMCO and BlackRock, ultimately from pension funds and insurance companies.

The cruel cycle: ordinary workers’ retirement savings are used to fund automation and AI, which in turn replace their jobs. Private credit distorts the cost of capital, suppresses labor value. Now, nearly $50 billion in private credit flows into AI every quarter.

Financializing AI infrastructure and the labor that sustains it creates a closed loop: the left hand cuts, the right hand benefits.

Liquidity transformation is essentially stealing time.

I’m not saying credit itself is evil, nor that all private credit institutions are bad. Lending has always been a probabilistic game—bad debts and mismatches exist in every era.

The key difference: who truly bears the losses?

Banks recognize bad debts on their balance sheets, are regulated, and face risks of bank runs and capital wipeouts with real money at stake.

Private credit managers earn performance fees, incentivizing you to bet—encouraging risk-taking—not responsible, prudent investing.

When loans go to zero, managers have already pocketed their earnings.

Every financial engineering ultimately boils down to one question: who bears the unwanted costs?

The “genius” of private credit is answering this question with remarkable “elegance”:

• Returns flow upward and backward: to long-term, retired, and beneficiary investors
• Costs flow downward and forward: suppressing wages, freezing hiring, delaying investments, distorting the entire economy’s cost of capital

Private credit is essentially stealing time.

This long-standing liquidity transformation in finance has only shed its disguise.

They use tools beyond their control, at prices they cannot predict, to bear risks they shouldn’t have to bear.

Lock-up periods prevent them from exiting; lack of transparent valuation prevents protests; quarterly smoothing ensures that when the final bill arrives, no one can be held accountable.

It may not look like plunder; it appears as “steady returns.” The difference is nearly indistinguishable until the collapse. Though this story has been around for a long time, what’s new is its scale, opacity, and the astonishing success of this asset class built on a false sense of security—so much so that even the world’s most cautious capital managers believe in it.

No other asset class in the world has experienced three months of 100% valuation followed by a complete wipeout overnight.

If this isn’t theft, I truly don’t know what is.