What Default Odds Did CoreWeave's Swaps Imply?

Chamath Palihapitiya says the number to watch is how the sharp money prices companies that borrow to fund these boxes, including CoreWeave, Nebius, and IREN. They trade credit default swaps, insurance for the bondholders. That price spiked this week to about 953 basis points. He reads it as about a 16 percent chance of default in a given year, and about a 55 percent chance over five years. A coin flip.

He is explicit about whose forecast that is. It is not his call. It is what the insurance market was saying about the debt. He says those traders are the smartest money in the trade, which is why the spike is worth looking into.