Former Coinbase CTO bets $2 million that Bitcoin will reach $1 million in 90 days
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Balaji Srinivasan, a former CTO of Coinbase, has placed a $2 million bet that Bitcoin will hit the $1 million mark in 90 days. This bet was in response to financial expert James Medlock who proposed a $1 million bet that the United States would not enter hyperinflation despite the recent collapse of banks in the country.
Bitcoin will hit $1 million in 90 days, says Balaji
In a Twitter thread on March 17, Balaji explained his views and why he proposed the bet. He claims the current banking situation is similar to the 2008 financial crisis, but this time central bankers, banks and regulators have lied to all dollar holders and depositors. According to the investor, the banking crisis was beyond fractions, as the banks do not have enough funds on a market-to-market basis to cover withdrawals.
Balaji also claims that the banks saw the crash coming, but that regulators were allowed to hide their literal insolvency until it became a major problem. Referring to the travails of former FTX chief Sam Bankman-Fried, he added that the banks used a similar system to use customer deposits to invest in dubious bonds.
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”They used all the deposits to buy the ultimate shitcoin: long-dated US Treasuries. And they were all straightened out at the same time, in the same way, because they were buying the same asset from the same supplier who devalued it at the same time: the Fed,” Balaji said.
But that’s not all. Balaji claims that the current banking crisis will lead to what he calls “hyperbitcoinization,” a phenomenon in which the world redefine Bitcoin as digital gold, similar to the model used before the 20th century with physical gold. He added that individuals, firms and large funds such as sovereign countries will buy Bitcoin to hedge against hyperinflation in the coming weeks.
Balaji paints a bleak picture, believing that hyperinflation will happen quickly when dollar holders realize that the Fed has lied about how much money is in the banks. Referring to a chart of the long-term weakness of USD/BTC, the analyst believes that a significant drop will occur in the coming weeks.
Balaji ends by saying he will move $2 million to the USDC for the effort. This will be divided into $1 million stake with Medlock and $1 million with another person. “Terms of the bet: ideally someone can set up a smart contract where BTC is worth >$1M in 90 days and I win. If it’s worth less than $1 million in 90 days, the counterparty gets $1 million in USD,” he suggested.
Related reading: Bitcoin price approaches $28,000 as BTC surges to its highest level since June
Arthur Hayes, the former CEO of BitMex, also agrees that BTC can reach $1 million. Hayes tweeted “BTC = 1 million dollars,” with a screenshot of a Bloomberg article reporting China’s decision to reduce the reserve ratio (RRR).
The Crypto Community has mixed reactions
Unsurprisingly, Balaji’s efforts received mixed reactions from the crypto community. While a few believe his convictions may be correct, the majority are willing to take his bet. Bitcoin’s price is currently around $27,000 at the time of writing.
Featured image from Unsplash, charts from Tradingview and Twitter