In light of the banking crisis that has hit the United States of America with the collapse of Silicon Valley Bank, the market is in a state of uproar. A million theories, speculations and opinions are circulating in the industry, with many views correlating the current circumstance to the 2008 banking crisis.
Amongst the flurry of predictions, the one that stands out the most is that by Balaji Srinivasan. Balaji is an extremely popular and well-known investor who has made a big name for himself, especially in the crypto space. He was credited with co-founding Counsyl, a health-tech firm and was also a general partner at Andreessen Horowitz, one of the leading venture capital firms in the States. However, he is most well known for working at Coinbase, a top cryptocurrency exchange platform, as the Chief Technology Officer (CTO).
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What is the 1 Million Bitcoin bet Everyone is talking about?
Srinivasan made a polarizing prediction on the 17th of March 2023. He said that in his opinion, the ongoing hyperinflation in the United States of America will drive the price of Bitcoin up and within 90 days the cryptocurrency will reach the value of one million US dollars.
The wager placed by Baljai on his prediction is around 2 million dollars in totality. He has placed a bet with two separate individuals, one of whom is not named and the other is James Medlock, a crypto pundit who works behind a pseudonymous Twitter account. This all started when James tweeted saying “I’ll bet anyone $1 million dollars that the US does not enter hyperinflation”.
Balaji took to action and responded by taking up the bet. He asked Medlock to buy 1 BTC and said that he will send 1 million dollars as per the conditions of the bet. The term that was decided was of 90 days. Srinivasan has moved 2 million dollars into USDC for the purposes of the bet. According to the conditions of the bet that were tweeted by him, we can understand that a smart contract would be set up in which if the value of BTC is greater than a million in the set time span, then Balaji would win the wager. However, if its price is any less than 1 million dollars after June 17 (90 days) then the two members of the counterparty will get 1 million US dollars each.
Balaji’s Opinion: Why he thinks Bitcoin will hit 1Million USD in next 90 days?
Balaji has been extremely vocal about his opinion on the current scenario. In the same tweet he also added that
“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. They knew this through all of last year, and communicated it internally in their coded language.”
He has termed what he thinks is going to be a turning point in the industry as “hyperbitcoinization”. He feels that hyperinflation must be reflected in terms of BTC versus USD since the rest of the fiat currency will be inflated away. In this circumstance, Bitcoin will start dominating the market with both individual users as well as big firms and investors will start purchasing BTC.
According to him, the movement will happen fast and many counties will have a role to play. Balaji gave the example of digital pandemics (COVID), digital riots (BLM), and digital bank runs (SVB) that escalated very quickly to further drive home the point that hyperinflation will not take very long.
He added that
“Everything will happen very fast once people check what I’m saying and see that the Federal Reserve has lied about how much money there is in the banks. All dollar holders get destroyed.”
What is the current state of Bitcoin?
Let’s have a look at where Bitcoin stands at the time of writing this article.
BTC is currently trading at a value of 28,195.12 US dollars and holds its number one rank in the list of cryptocurrencies. The fully Diluted Market Capitalization of Bitcoin now is at 592,101,735,614 US dollars, which just like the price has shown a growth of around 3.9 per cent. The twenty four hour trading Volume has risen by 57.46 per cent and reached 48,767,342,077 dollars.
Additionally, the value of BTC has moved away from the stocks of the United States which has happened for the first time in almost a year. This price growth was seen rising at about 65 per cent in contrast to the 2.5 per cent gains in S&P 500 and the Nasdaq’s 15% fall.
Balaji’s Bitcoin Price Prediction: What are others saying about it?
The reactions to Balaji’s wager and the larger scenarios at hand have been quite polarizing. According to Decrypt “And even though Bitcoin’s correlation to stock indexes like the S&P 500 and Nasdaq remains significant, some on Twitter are calling it the “The Great Decoupling” given Bitcoin’s recent surge past $28,000 as Wall Street wavers.”
Adam Cochran, who is a very well-respected venture capitalist published a long tweet expressing his opinions on the claims made by Srinivasan. He said that during the covid pandemic, BTC saw a massive rally, which in itself was around 547%, through the years between 2020 to 2022. However, according to the bet, Balaji is expecting a mammoth gain of 3600% in a very short time span of only 90 days. This means that the catalyst required for such expansion will have to be way more powerful and impactful than the pandemic.
Decrypt had a conversation with Adam through direct messages on Twitter and reported what he told him. He stated that “Simply put, stores of value or alternative assets do well when we doubt the profitability of an economic system and not the existence of a system. If the system doesn’t exist, we shift down the hierarchy of needs, placing value on necessity goods, not valuables.”
According to Cochran, even though Balaji’s bet is some sort of a beacon of light for the crypto market and has brought back the excitement that the users of crypto had lost, he still believes that the bet is extremely unrealistic especially since the macro environment is in a such a risky position.
On the other hand Jimmy Song, a very respected Bitcoin expert and entrepreneur has shown some backing for the views endorsed by Balaji. He said that while the situation at hand is quite worrisome, Bitcoin could contribute towards softening the blow in a major way. Acting like a strictly limited currency, BTC can not only store value more efficiently but also as a result help reduce the consequences of hyperinflation.
He tweeted that
“By providing a stable, secure, and transparent financial system, Bitcoin will help foster new solutions and innovations that pave the way for a more resilient, just, and prosperous system.”
Many analysts are also thinking that maybe Balaji will lose the bet and will have to let go of the 2 million dollars. But due to all the hype created because of this, he will end up making millions of dollars on the remnant of his holdings.
Is Bitcoin Actually Going to hit 1Million USD in next 90 days?: Our Opinion
Keeping in mind everything that has been said, we can also contribute our opinion to the array of speculations. According to Balaji the matter at hand right now is not of rational argument but instead is of existential belief. The bet can be seen as a vehicle to further drive home his ideologies on the subject.
From a very rational point of view, we believe that such a huge growth is not really plausible. However, we don’t think that Balaji is after the analytical or logical output of this bet. He is trying to spread a larger awareness and knowledge about the deeply ingrained flaws in the banking system and how Bitcoin can be an answer to them.
The options users can resort to are limited, and right now Bitcoin can be purchased at a much more nominal rate. In the scenario that Bitcoin’s price pumps massively and reaches lakhs in its value, then users will end up having to buy bitcoin but at a higher rate. We also think that the talk is not just limited to bitcoin here. With the scenario we have laid for us, it is very possible that the top 100 coins globally will increase by around 10 to 20 times in the coming one year.
What we need to understand is that with the last three booms (2012-13, 2016-17, 2020-21), each one of them was followed by a consequent bust. The bust was initiated since users had an existing financial option of the dollar. In the future scenario, this seems less likely. We feel that after the next boom the option of going back to the dollar will deplete and there won’t be an exit option.
Hence we advise you to enter the market now with a crypto-economic belief system in mind.
Bitcoin and Hyperinflation in USA: Video
Recommended: If you have some free time, do not miss this video in order to understand what is Hyperinflation and why Bitcoin is the ultimate end.
This video features Sunil Agarwal and Hitesh Malviya from India talking about Balaji’s Bitcoin Price prediction. Feel free to watch it at 2x speed, to save time.
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Disclaimer: The above article – ‘Is Bitcoin going to cross 1M USD in next 90 days: Balaji’s Bet’ is just an opinion and not a financial advise. Please DYOR and consult a financial expert before investing. None that we have said is an investment advise.