2023-05-03 20:10:10
© Reuters. Ex-Coinbase backs off on $1M Bitcoin bet
CriptoFácil – Former CTO of Coinbase (NASDAQ:), Balaji Srinivasan, became famous for betting that (BTC) would reach US$ 1 million in three months. The executive bet the same amount of money on this bet, but decided to back out.
Earlier, Balaji claimed that the United States would experience hyperinflation that would destroy the power of the dollar. So, the executive bet $1 million in USDC that the price of BTC would reach that value because of the crisis.
However, Balaji did not withdraw his arguments even after the bet ended. That is, he maintains his thesis that the dollar is on the way to hyperinflation, underlining that the economy will not have the “soft landing” promised by the chairman of the Federal Reserve (Fed), Jerome Powell.
Bitcoin at $1 Million
On Tuesday (2), Balaji announced the end of his bet on Twitter. According to the executive, he decided to mutually cancel the bet.
“The million dollar bet is now closed by mutual agreement. I have earned over $1 million in blockchain donations, which you can check by clicking on the links below,” Balaji said.
Indeed, the links Balaji provided show proof of the donations the former executive won after announcing the bet. According to the sums, Balaji received around US$ 1.5 million in donations, or around R$ 7.5 million in current values.
Then, the executive donated the amount in equal parts to three organizations: Medlock (the counterparty of the bet), the charity organization Give Directly and another one for Bitcoin Core. Each of them received about US$500,000.
Balaji closed the bet 46 days before the 90-day deadline. During Consensus 2023, Balaji predicted at 10% the probability that his prediction actually occurs in the stipulated period.
“The reason I did this was because I believe in the public good, but unfortunately we can no longer rely on the public sector to tell us when something is wrong. So I spent my own money to send a demonstrably expensive signal that there is something wrong with the economy,” he said.
In an attached video, the investor explained that a crisis can happen quickly – and without warning from regulators or the government. Balaji cited as an example Ben Bernanke, who said that the economy could enter a “mild recession” in April 2008. However, the “mild recession” turned into a major global crisis just five months later.
Balaji predicts crisis
According to Balaji, several areas of the economy are already on the brink of collapse. The US debt ceiling is fast approaching, most of the country’s banks are close to insolvency, and assets held by failed banks are now comparable to 2008 levels.
Additionally, bonds suffered their worst year ever in 2022, which were largely bought by banks and insurance companies. Student loan debt and credit card debt are also on the rise, totaling $180 billion and $960 billion, respectively.
Balaji also believes that countries are abandoning the dollar at an accelerated pace, echoing views published by BitMEX co-founder Arthur Hayes.
“If you believe there is a high probability that these simultaneous economic crises will make a massive impression in 90 days, 900 days or even 90 months – then you expect some kind of default and a fiduciary crisis,” Balaji wrote on his website. “And you’re going to want to be prepared, whatever that means for you.”
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