Crypto's 'sound money' firms are just overleveraged bagholders.

A bitcoin treasury firm called Nakamoto has pledged about 70% of its bitcoin holdings as collateral to crypto exchange Kraken, securing a loan of roughly $165 million. The catch is that the firm's entire market value is now less than the amount it owes, and it bought the pledged bitcoin at around $118,000 per coin, far above the current market price below $69,000.

This situation highlights a familiar, reckless pattern in crypto finance: using volatile assets as loan collateral. If bitcoin's price falls further, Nakamoto could face a margin call, potentially forcing a sale of its assets at a loss and creating a domino effect. It's another reminder that for all the talk of decentralization and sound money, the industry keeps recreating the same high-risk, highly-leveraged failures of traditional finance.