Balaji Srinivasan, former CTO of Coinbase, has bet $2 million that Bitcoin would reach the price of $1 million in 90 days. This bet was in response to financial expert James Medlock, who proposed a $1 million bet that the US would not go into 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 was proposing the bet. He claims that the current banking situation is similar to the 2008 financial crisis, but this time, central bankers, banks and regulators have lied to all holders and depositors of dollars. According to the investor, the banking crisis went beyond fractional reserves as banks do not have enough funds from market to market to cover withdrawals.
Balaji also alleges that the banks saw the collapse coming but were allowed by regulators to hide their literal insolvency until it became a major problem. Citing the woes of former FTX chief executive Sam Bankman-Fried, he added that banks have implemented a similar system of using customer deposits to invest in questionable bonds.
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“Everyone used the deposits to buy the latest bullshit currency: long-term US Treasuries. And they all got into debt at the same time, in the same way, because they bought the same asset from the same vendor that devalued it at the same time: the Federal Reserve,” Balaji said.
But that is not all. Balaji claims that the current banking crisis will lead to what he calls “hyperbitcoinization,” a phenomenon in which the world renames Bitcoin as digital gold, similar to the model used before the 20th century with physical gold. He added that individuals, companies, and large funds such as sovereign countries will be buying Bitcoin to hedge against hyperinflation in the coming weeks.
Painting a bleak picture, Balaji believes that hyperinflation will occur quickly once dollar holders realize that the Fed has lied about how much money is in the banks. Citing a chart of the long-term depreciation of USD/BTC, the analyst believes a significant drop is in store for the next few weeks.
Balaji concludes by stating that he will move $2 million to USDC for the bet. This will be split into a $1 million bet with Medlock and $1 million with someone else. “Terms of the stake: Ideally, someone can set up a smart contract where BTC is worth >$1 million in 90 days, then I win. If it’s worth less than $1 million in 90 days, then the counterparty gets the $1 million in dollars,” he proposed.
Related reading: Bitcoin Price Approaches $28,000 as BTC Hits Highest Level Since June
Arthur Hayes, the former CEO of BitMex, also agrees that BTC could reach $1 million. There is tweeted “BTC = $1 million,” with a screenshot of a Bloomberg article that reported on China’s decision to lower the Reserve Repurchase Rate (RRR).
Crypto Community has mixed reactions
Unsurprisingly, Balaji’s bet drew mixed reactions from the crypto community. While some believe his convictions might be correct, most are willing to take his bet. The Bitcoin price is currently around $27,000 at the time of writing.
Featured Image from Unsplash, Charts from Tradingview and Twitter
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