They assumed collateral would hold 25% of its initial value until the end of the loan. In the past 12 years, Bitcoin lost 80%+ of its market value. Three times

They assumed collateral would hold 25% of its initial value until the end of the loan. In the past 12 years, Bitcoin lost 80%+ of its market value. Three times. It came back before, so they might become solvent again eventually. But this was bad risk management.