Why the lenders are in trouble and you should be worried.
1/x
1/x
2/x - First of all, if you have funds with a third party anywhere - get out while you can. Some will survive, some wont but best to wait till the dust has cleared.
3/x - Lets stick with facts first. There is an asian lender in trouble. Miners have been overlevered. Instead of buying protection, a few have been overly bullish and instead did a real texas hedge.
4/x - Lending to miners is pretty terrible risk wise. Usually you'll ask for 200% collateral. 100% of which are liquid coins (think BTC), the other 100% of which are machines. When BTC has done a huge drop like this, the liquid collat is severely devalued. The machines?
5/x - illiquid and difficult to dispose of at anywhere close to book value. As a lender to these entities, BTC dropping is disastrous for you.
6/x - As a major asian lender, you also have lines with other lenders. This is where contagion starts. The lender in question has a balance sheet of 2-5bn if estimates on the streets are correct
7/x - Lets go to the more juicy part. We all know that 3AC has defaulted due to them being overly levered. This leverage was taken from the lenders. What could 3AC have posted as collateral?
8/x - Liquid tokens and more pertinently for us - their GBTC stake. 
9/x - This GBTC was probably pledged as collateral to one of the lenders. The problem is this. For liquid tokens like BTC, you can immediately sell it off. However, shares that are pledged are usually with a 3rd party agent. The process to start selling is not immediate
10/x - You can do a dirty hedge by selling out BTC against this. However there is already no demand for GBTC at all - as evidenced by the discount. 5% of the total shares outstanding going into the market will press the discount to even 50%.
11/x - This means minimally 3AC going under is going to create at least 100mil of damage to one of the lenders even if they did everything correctly.
12/x - However, remember that 3AC was touted to be 18b at one point in time. If their illiquid assets were marked at 9b (half) - and i would imagine they would want to use this as collateral as much as they can - we are talking about a multiple billion hole created on the lenders
13/x - The various lenders definitely have exposure to 3AC. BlockFi, Genesis and Nexo. Heck. Nexo even loaned money against NFTs for 3AC - Floor prices for those jpegs are gonna see a market in free fall.
14/x - Of all these 3 lenders. BlockFi is definitely pretty weak. First of all, they did a down round at 1b from 3b. This means they are short of cash. Most importantly it means that they probably did not make money in one of the biggest bull markets in crypto
15/x - A down round in venture is severely damaging to everybody. You only do it if you are fighting for survival. If you can't even make money in a bull market where there are no defaults. How can you make money in a bear market with higher default rates?
16/x - I touched upon the lending business model. Essentially every other lender is capitalized at 5-10% equity to asset base. 3AC's fall out is just the first to come. There will be many more defaults. As long as one lender comes into distress
17/x - All the rest will fall in contagion because they have lines with each other. This is Lehman for us.
18/x - This credit destruction will trigger further selling. Which begets further selling because our entire industry is built on leverage. Miners. Lenders.
19/x - If we take the aggregate balance sheet of all the lenders out there - thats 50bn of credit. If one lender goes under. Expect that 50bn to vaporise. This will damage the entire crypto marketcap by maybe 300bn - assuming that every dollar into
20/x - the system increase/decreases market cap by 6x.
21/x - tldr - the lenders are in trouble from themselves, 3ac and other levered clients. We will continue to face collateral liquidations in a downward spiral of endless selling.
22/x - However, this may be the first cycle where we break past the previous high. What will this do to the psyche of "investors"? The break in narrative will be extremely damaging - some will lose faith
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