The crypto evangelist’s big Bitcoin effort comes to a satisfying conclusion
The best advice you can get when you buy bitcoin or invest in crypto (other than, you know, “don’t do it”) is the same advice you get when you go to a casino: never bet more than you’re willing to lose. Balaji Srinivasan, the former CTO of Coinbasemust have been more than willing to part with fat stacks after he gave up hope that bitcoin would ever reach prices equivalent to $1 million.
“I’m not a trader, I’m not John McAfee, and I’m not in the business of burning a million dollars publicly,” Srinivasan wrote on Tuesday. chirping. Unfortunately, that’s what he did, and more than a month earlier than he said he originally intended.
Srinivasan, a former partner at venture capital kingmakers Andreesen Horowitz, created one public effort back in March that bitcoin would reach $1 million in value. He called his gamble shortly after collapse of Silicon Valley Bank and Signature bankwhich predicts that the economy will go bankrupt along with hyperinflation of the US dollar, all of which will cause the price of bitcoin to skyrocket. Srinivasan originally predicted that it would take 90 days for the value of bitcoin to blow out while the entire US economy flatlined, although he later told CoinDesk it could take “900 days or even 90 months … I’m not 100% likely.”
His attempt to short the entire US economy didn’t exactly pan out, and he called his own bluff late Tuesday. He said he donated $1.5 million in total, of which $500,000 went to three entities, including East African nonprofit GiveDirectly, bitcoin node developers Bitcoin Core and Twitter user James Medlock. The account previously bet a million dollars that the economy would not go into hyperinflation, although the user admitted on Tuesday that they made the tweet as some kind of joke.
Still, Srinivasan continued to argue that there was “something wrong with the economy, and the government is not telling you about it.”
His video explaining his reasoning is more like a hungover person trying to explain why they drunkenly tried to consume their friend’s houseplant than any cogent argument about the state of the economy. He pointed to the run-upturns of previous economic disasters, such as the months before the start of the financial crisis in 2008 and the start of the covid pandemic in 2020, for why he chose his time frame of a few months. He then cited a slew of articles pointing to financial fears of an incoming bond and banking crisis. He tumbled on, quotes the well-known prognosticator Elon Musk and the declining number of millionaires coming to the United States as a sign of economic concern.
“I don’t have a crystal ball,” he said, then claimed there’s a 10% chance we’ll see a financial crisis in “months.”
“This is not a small thing … it is not as if the banking crisis is over,” Srinivasan said, referring to the SVB collapse. That bank was one of the biggest bank failures in US history, although that hasn’t stopped his former bosses at Andreessen Horowitz, aka a16z, log in again to the restored bank. Don’t forget that part of the reason for SVB’s immediate collapse was one bank run by startup founders and venture firms, many backed by a16z. The venture capital firm had reportedly sent notices to many of its startups asking them to withdraw their money, decimating the bank within hours.
Also, let’s not forget where the price of bitcoin currently stands. The price of bitcoin reached peaks of over $60,000 briefly in late 2021 before crashing sharply during the following year. In accordance Coinmarketcapthe price is currently below $30,000. If he really believed that the price of bitcoin would jump $70,000 in price in just a few months time frame, he would also have to confront the fact that bitcoin is only rarely used as a currency, acting more as a volatile speculation that rarely leads to any kind of profit for base users.
