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

Private credit is just stealing time.

By: Jeff Park

Translated by: Chopper, Foresight News

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

In the 1980s, it was junk bonds, cloaked in “capital democratization”; the 1990s saw emerging market debt, packaged as a noble effort to help developing countries integrate into the global economy; the 2000s brought structured finance, so layered and complex that even its designers couldn’t 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 version of this story, and perhaps the most insidious. Unlike its predecessors, from the outset, it deliberately makes the liquidation risk before a crisis completely invisible. By the time problems are discovered, the consequences are often irreversible.

Recently, BlackRock directly wrote down two private credit loans from 100% face value 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?

The crisis is not the root cause; it’s the cover-up that created it

The mainstream narrative is this: after the 2008 financial crisis, banks, constrained by Basel III, were reluctant to lend, so non-bank institutions stepped in to fill the gap, serving small and medium-sized enterprises—an inevitable market development.

A more accurate picture is that the regulatory framework post-2008 didn’t truly eliminate risk; instead, it actively fostered a shadow system that took on the same underlying risks but avoided the regulations designed to constrain them.

The private credit market grew from $46 billion in 2000 to about $2 trillion today. This money didn’t appear out of nowhere, nor did it randomly flow into pension funds and insurance companies. It was precisely directed toward large, long-term capital holders willing to accept opaque valuations.

Its structure mirrors that of the 2008 crisis—except for one major difference. During the subprime collapse, losses mainly hit reckless households and lending banks; once private credit collapses, losses have no boundaries—they come from life insurance policyholders, pension beneficiaries, ordinary people.

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

Even worse, the industry isn’t content with just harvesting institutional investors; 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 professional institutions 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—they’re the same mindset.

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

But the underlying message is: Bitcoin’s price is too honest. 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 a 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 it 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 needing private credit financing. 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, 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 of 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 compensates.

Liquidity transformation is just time theft

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

The key difference: who truly bears the losses?

• Banks hold bad debts on their balance sheets, regulated, facing bank runs and capital wipeouts, with real money at risk;
• Private credit managers earn performance fees, incentivizing “betting” rather than “being responsible and winning.”

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

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

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

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

Private credit is just stealing time.

This has long been the essence of liquidity transformation in finance—only now stripped of its disguise.

They use tools beyond their control, at prices they cannot foresee, bearing 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 sudden zero overnight.

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