People Who Hate Bitcoin Are “Plundering” the World Through Private Credit

By Jeff Park

Translated by Chopper, Foresight News

In finance, each generation invents a new tool—disguising its worst instincts as seemingly prudent products.

In the 1980s, it was junk bonds, cloaked in the rhetoric of “democratizing capital”; in the 1990s, emerging-market debt, repackaged as a noble mission to integrate developing countries into the global system; in the 2000s, structured credit—so layered and complex that even its designers couldn’t grasp it before it collapsed.

These “innovations” share one trait: they fabricate artificial solutions (e.g., liquidity transformation) for real problems (e.g., insufficient growth), ultimately collapsing under their own excess.

Private credit is the latest chapter—and possibly the most insidious. Unlike its predecessors, it was designed from the outset to render losses invisible until it’s too late: by then, the damage is irreversible.

Recently, BlackRock wrote down the face value of two private credit loans—from 100% to 0%—in one go. One was slashed in under a month. This looks less like a technical valuation error and more like an admission of broken incentives.

How did we get here?

Crisis isn’t the root cause—it’s the cover-up that breeds crisis

The industry’s dominant narrative goes like this: After the 2008 financial crisis, banks—constrained by Basel III—shrank lending, so non-bank lenders stepped in to serve SMEs. A natural market response.

The truer story is that the post-2008 regulatory framework didn’t eliminate risk—it actively spawned a shadow system bearing identical underlying risks, yet evading the very safeguards meant to contain them.

The private credit market ballooned from $4.6 billion in 2000 to roughly $2 trillion today. That money didn’t appear out of thin air—or flow haphazardly into pensions and insurers. It was deliberately channeled to large, long-lockup institutions willing to accept opaque valuations.

Its structure mirrors the 2008 crisis—except for one stark difference. In 2008, subprime losses fell mainly on reckless households and overextended banks. In a private credit collapse, losses have no boundaries: they hit life-insurance policyholders, pension beneficiaries—the general public.

In 2008, the socialization of losses—infuriating as it was—at least followed a period of private gain. With private credit, gains flow straight into fund managers’ pockets, while losses are socialized onto teachers’, nurses’, and civil servants’ retirement accounts—people who never consented to underwrite them.

Worse, the industry isn’t content with harvesting institutional capital. It’s now targeting retail investors. Since 2025, private credit ETFs have exploded—but the problem has only deepened: illiquid assets don’t become liquid inside an ETF. They simply relocate the “run-on-redemption-but-can’t-sell-the-assets” bomb from professional institutions to ordinary investors’ brokerage accounts.

That’s the reality unfolding right now.

Asset allocators who hate Bitcoin reveal everything

Over the past few years, I’ve pitched Bitcoin to institutions worldwide—and noticed a startling pattern: those rejecting Bitcoin often zealously embrace private credit. These aren’t opposing views on the same question—they’re expressions of the same mindset.

Their objections to Bitcoin sound “prudent”: too volatile, drawdowns unexplainable, no cash flows to anchor valuation.

But the subtext is this: Bitcoin’s price is brutally honest—public, real-time, visible to all. If it’s wrong, it’s wrong—and you can’t hide it.

Private credit is its antithesis:

• Valuation changes crawl—smoothed quarterly by fund managers
• No liquid market exists to puncture the fiction
• Lock-up periods stretch long enough for decision-makers to get promoted, switch jobs, or retire

“Exclusive deal access”? Just a euphemism for absent pricing competition.

A true fiduciary pursues truth. These allocators pursue avoidance of truth. This isn’t risk management—it’s its opposite, dressed in professional garb and utterly indifferent to beneficiary interests.

The AI boom turns it systemic

Morgan Stanley estimates $290 billion in global data center capex will be needed from 2025–2028—with ~$80 billion expected to come from private credit. Private credit has thus evolved from a lending niche into critical infrastructure for the most consequential tech transition of the coming decades.

Case in point: In October 2025, Meta and Blue Owl closed a $27 billion data center financing—the largest private credit deal ever. The money came from PIMCO and BlackRock—and ultimately from pensions and insurers.

The cruel irony of this loop: Ordinary workers’ retirement savings are funding automation and AI—technologies poised to displace those very workers. Private credit distorts capital costs and suppresses labor value. Today, nearly $50 billion in private credit flows into AI every quarter.

Financializing AI infrastructure while simultaneously displacing the workers who fund it forms a self-cannibalizing loop: left hand cutting off the right.

Liquidity transformation is theft of time

I’m not saying credit itself is evil—or that all private credit firms are rotten. Credit has always been a game of probabilities; defaults and mismatches exist in every era.

The crucial distinction lies in who truly bears the loss.

• When a bank books a bad loan, it sits on the balance sheet—subject to regulation, runs, and equity wipeouts. Real skin in the game.
• Private credit managers earn performance fees—a “bet-on-it” incentive, not a “win-responsibly” one.

By the time the loan hits zero, the manager has already pocketed their fee.

Every financial engineering exercise ultimately circles back to one question: Who absorbs the cost nobody wants?

Private credit’s “genius” lies in answering that question with exquisite elegance:

Gains flow upward and backward—to older, retired, long-term-capital beneficiaries

Costs flow downward and forward—suppressing wages, freezing hiring, delaying investment, and warping the economy’s capital cost

Private credit is theft of time.

This is finance’s age-old liquidity transformation—stripped bare.

People bear risks they neither chose nor foresaw, via instruments they cannot control and at prices they cannot anticipate.

Lock-ups prevent exit; opaque valuations prevent protest; quarterly smoothing ensures that when the final bill arrives, no one remains accountable.

It doesn’t look like predation—it looks like “steady returns.” The two are nearly indistinguishable—until collapse hits. Though this story is old, its novelty lies in its scale, its opacity, and the astonishing success of an asset class built on a false sense of safety—one that has convinced the world’s most cautious capital allocators it’s legitimate.

No asset class anywhere in the world can hold a 100% valuation for three consecutive months—then vanish overnight.

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