I think the so-called Bitcoin treasury companies have just reinvented exchange tokens: there is an asset with X real world utility but not naturally leverageable. It should flow to place in world where most leverage is bolted onto it; immediately incentive compatible. Repeat 100x
And then “Holy %}*]^ how did so much of it end up in a place with grossly deficient risk management?!”
(I understand that MicroStrategy is the opposite of leveraged exposure from the common shareholder’s perspective but if someone with hands on keyboard believes they are allowed leverage if they hold more exchange tokens then the model happens regardless of whether that is true.)
(See, for example, the trading fund which believed that the more FTT it held the more cash it could licitly borrow from an affiliated entity’s depositors to deploy against many interesting aims.
They were wrong about that, obviously.)
Relevant Patio11 tweet: https://x.com/patio11/status/1933975792721207316