Balaji Srinivasan, a prominent encryption expert, and crypto-focussed angel investor has made a bet that the US will have such extreme hyperinflation within the next 90 days that a single Bitcoin will cost at least $1 million.
The bet came about after James Medlock, a renowned market specialist wrote on Twitter saying “I’ll bet anyone $1 million dollars that the US does not enter hyperinflation” suggesting that the US will face hyperinflation this year.
Srinivasan replied with a proposition, stating that he would send $1 million to James if hyperinflation did not happen within 90 days. However, the pundit required James to place a counter bet by purchasing 1 bitcoin. At the time of proposing on March 17, Bitcoin was valued at around $26,000, placing the odds at around 40:1 for James to Srinivasan respectively should the former win.
Srinivasan, formerly a CTO of Coinbase also mentioned that they need to agree on a custodian who will provide an escrow and settle the bet at the end of the forecast period.
The high stake bet comes on the back of a major banking crisis in the US that has prompted the Federal Reserve to pump its balance sheet hundreds of billions to avert further bank collapses. This, according to some experts has placed the fight against inflation in harm’s way, pushing the US toward the brink of a 2008-like global financial crisis.
“Just as in 2008, the bankers lied. This time, the central bankers, the banks, and the bank regulators have lied to all dollar holders and depositors. This isn’t your typical fractional reserve situation. The problem is that there isn’t enough in the banks on a mark-to-market basis to cover withdrawals,” said Srinivasan.
Srinivasan also suggested that the absolute worst place to be is to have large amounts of assets locked up in three-month Treasury bills. According to him, most fiat bank accounts are now a trap thus people should “buy Bitcoin and get their coins off exchanges.”
Srinivasan’s comments sparked a discussion about the future of money and the role of digital currencies in it. Programmable money, as Srinivasan calls Bitcoin and other digital assets, has the potential to address bank crises by allowing for more complex financial transactions and automation.
Meanwhile, the bet has sparked excitement in the crypto community with observers keenly waiting to see the outcomes. Notably, bitcoin has surged by over 60% year to date. To tap the $1 million mark, the asset’s price would need to grow over 3,300%, which to some is improbable within 90 days.
At press time, Bitcoin was trading at $27,745, up roughly 4% in the past 24 hours, as per data from Coinmarketcap.