Coinbase CTO bets Bitcoin to $1M in 90 days, but I’m not sure even he believes it

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Key Takeaways

Former Coinbase CTO Balaji Srinivasan wager an nameless Twitter account $1 million that Bitcoin would commerce at $1 million or higher in 90 days
Srinivasan is predicting imminent hyperinflation and a collapse of the US greenback
Bet is on wildly unfavourable phrases, with the opposite aspect of the wager, James Medlock, ready to lock in huge revenue risk-free by merely shopping for a name possibility with a $1 million strike for insurance coverage
Bet comes almost a 12 months to the day after Do Kwon’s notorious wager with one other nameless Twitter account over LUNA value

(*90*)

I’m no chemist, but one of the potent mixtures recognized to humankind has to be that of ego and cash.

In what could go down in the annals of Internet historical past, former Coinbase chief expertise officer and outstanding angel investor Balaji Srinivasan wager $1 million that the value of Bitcoin can be $1 million or higher in 90 days’ time.

The wager was confirmed over Twitter, with the opposite aspect taken by nameless meme fanatic James Medlock. “(My wife) is the only person who knows I am James Medlock”, he posted in one other tweet. “And I immediately told her about the bet”.

What is the wager?

The wager began when Medlock posted the under tweet, an innocuous tweet outlining his perception that the US would not expertise hyperinflation, apparently in response to some crypto fanatics declaring that it was inevitable.

I’ll wager anybody $1 million {dollars} that the US does not enter hyperinflation

— James Medlock (@jdcmedlock) March 16, 2023

It ought to have ended there. But in got here Srinivasan declaring he “will take that bet”. Not solely that, but on wildly unfavourable phrases. The setup is that this: Medlock sends 1 BTC and Srinivasan sends $1 million to escrow right this moment, with the latter denominated in the stablecoin USDC.

The logic is that, had been hyperinflation to happen and the US greenback to collapse, Bitcoin would reap the beneficial properties and explode upwards. Hence, the wager turned from hyperinflation into the Bitcoin value.

If Bitcoin trades at $1 million or higher on June seventeenth, the kitty is Medlock’s. If it doesn’t Srinivasan takes the bounty.

I’ll take that wager.
You purchase 1 BTC.
I’ll ship $1M USD.
This is ~40:1 odds as 1 BTC is value ~$26k.
The time period is 90 days.
All we’d like is a mutually agreed custodian who will nonetheless be there to settle this in the occasion of digital greenback devaluation.
If somebody is aware of how to do that… https://t.co/tcuBNd679T pic.twitter.com/6Aav9KeJpe

— Balaji (@balajis) March 17, 2023

The wager is not sensible

Obviously, this wager is not sensible for quite a lot of causes. Firstly, the unique tweet was a joke, as $1 million in the occasion of hyperinflation would change into nugatory.

But the crux of it is the phrases. Looking at market odds, it is a longshot of virtually unimaginable odds. So a lot so, in reality, {that a} huge chunk of the wager might be assured to Medlock in a risk-free method in about 30 seconds, ought to he so please.

All he would have to do is go to the market and purchase a name possibility on Bitcoin with a strike value of $1 million {dollars} on the identical expiry date of the wager (June seventeenth). This would price pennies in comparability, and a large chunk of the $1 million might be pocketed.

Of course, all people is aware of this, and the wager is nothing greater than a seize at publicity or some type of self-marketing stunt by Srinivasan. He reportedly already holds a large stash of Bitcoin in any case, with the wager not being overly materials to him. Call me a cynic, but there’s additionally the truth that Srinivasan launched a podcast a month in the past.

The humorous half is that Medlock didn’t have 1 BTC, value $26,000 on the time, to hand. Poker participant Isaac Haxton stepped in to cowl the 1 BTC (with out taking any upside). Medlock has additionally stated he will donate a complete of 70% of the winnings after taxes to charity – but he will nonetheless pocket a cool $300,000 from a tweet which was a literal joke.

What would have to occur for the wager to win?

Were this wager to win, it is difficult to think about what the world would seem like. A 3600% enhance to $1 million per Bitcoin in 90 days would place the market cap of Bitcoin at shut to $20 trillion. That is a mind-boggling quantity – for one factor, it is greater than all mortgage debt in the US.

For this to occur in 90 days would seemingly imply a complete collapse of the economic system and society as we all know it. The banking sector evaporating into skinny air and the US greenback collapsing would throw the world into chaos, with an virtually unimaginable degree of crime, unrest and anarchy.

People would lose their life financial savings and society would collapse near-instantly. And but, there are Bitcoiners cheering on Srinivasan in this wager. Go determine.

In an amusing coincidence, the wager comes almost a 12 months to the day that LUNA founder Do Kwon wager with one other nameless Twitter account that LUNA can be a cheaper price in one 12 months than it was then. This week marked the one-year level, and I believe any cryptocurrency investor is aware of what has occurred to LUNA.

Some folks have an excessive amount of cash and simply don’t know what to do with it, I suppose.