Balaji Srinivasan, the former CTO of Coinbase, has made a $2 million bet that Bitcoin will reach the $1 million price mark in 90 days. This bet was in response to financial expert James Medlock who proposed a $1 million bet that the US would not enter hyperinflation despite the collapse of the country’s banks.
Bitcoin Will Reach $1 Million In 90 Days, Balaji Says
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 investors, the banking crisis went beyond fractional reserves because banks did not have enough funds on the market-to-market to cover withdrawals.
Balaji also stated that banks saw the crash coming but were allowed by regulators to hide their literal insolvency until it became a major problem. Citing the experience of former FTX chief executive Sam Bankman-Fried, he added that banks use the same system of using customer deposits to invest in dubious bonds.
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“They all use their deposits to buy the ultimate shitcoin: US Treasuries that have been around for a long time. And they all got rekt at the same time, in the same way, because they bought the same asset from the same vendor that was devalued at the same time: the Fed,” Balaji said. said.
But that’s not all. Balaji said that the current banking crisis will lead to what he calls “hyperbitcoinization,” a phenomenon in which the world redenominates Bitcoin as digital gold, similar to the model used before the 20th century with physical gold. He added that individuals, companies, and large funds like sovereign nations will buy Bitcoin to hedge against hyperinflation in the coming weeks.
Painting a bleak picture, Balaji believes that hyperinflation will happen quickly if the dollar holder realizes that the Fed has lied about how much money is in the banks. Citing the graph of the long-term depreciation of USD/BTC, analysts believe that a significant drop-off will occur in the coming weeks.
Balaji ended by declaring that he would transfer $2 million to USDC for the bet. This will be divided into $1 million bet with Medlock and $1 million with others. “The terms of the bet: ideally, people can set up a smart contract where BTC is worth > $1M in 90 days, then I win. If the price is less than $1M in 90 days, the partner gets $1M in USD,” he said.
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Arthur Hayes, former CEO of BitMex, also agreed that BTC could reach $1 million. Hayes tweeted “BTC = $1 million,” with an image from a Bloomberg article reporting China’s decision to reduce the reserve repo rate (RRR).
The Crypto Community Has Mixed Reactions
Unsurprisingly, Balaji’s bet drew mixed reactions from the crypto community. While some believe the belief may be true, the majority are willing to take the bet. The current price of Bitcoin is around $27,000 at the time of writing.
Featured images from Unsplash, charts from Tradingview and Twitter