Former Coinbase CTO and venture capitalist Balaji Srinivasan has many skeptical of his latest prediction that Bitcoin will moon to $1 million within 90 days. What could he really be after with such a bullish public bet?
On Tuesday, Balaji explained that his $2 million gamble isn’t about making money, but about settling an “ideological matter” surrounding U.S. dollar inflation.
In a tweet response to angel investor Jason Calcanis on Tuesday, Balaji clarified that last week’s bet was not initially proposed by him, but by James Medlock on Twitter. Medlock, who was surprised to see someone take up the offer, later called it “the most profitable shitpost in history.”
“I believe Medlock will agree that this is an ideological bet, like the Simon-Ehrlich bet, which resolved a famous difference of opinion between libertarians and progressives,” wrote Balaji.
The Simon Erlich-bet was a bet between professors Julian Simon and Paul Ehrlich in 1980 to settle their conflicting theories around human overpopulation and resource scarcity. Simon, who argued that the human race would not be driven to poverty and famine by overpopulation, ultimately won the bet, with Ehrlich sending him a cheque for $576 in October 1990.
Balaji’s theory about “hyperbitcoinization” predicts an overwhelming flow of capital into Bitcoin as the Federal Reserve injects trillions of dollars into the economy to protect the banking system. As he states, others including Jack Dorsey have predicted near-term hyperinflation for the US dollar in recent years.
The former CTO said that he has publicly committed to never selling his Bitcoin for USD unless legally compelled to do so and that he no longer has faith in the US banking system.
“I am sadly not alone in this loss of faith in US banking,” he continued, citing Moody’s negative outlook on the banking system released earlier this month, and the very recent surge in Chinese banking shares over global competitors. “If the USD fails, the free world needs BTC as the reserve currency, not RMB,” he said.
Numerous critics have blasted Balaji’s predictions as being overzealous, if not outright self-interested. Demtri Kofinas on Twitter called Balaji’s claims about rising Chinese banks a “lie,” and his predictions about USD hyperinflation “ideologically driven and ignorant.”
Yet certain Bitcoin bulls don’t find it so unreasonable: BitMEX co-founder Arthur Hayes has predicted that the Federal Reserve’s new Bank Term Funding Program will result in “infinite money printing,” while Strike CEO Jack Mallers said on Monday that the Federal Reserve is “blowing up the financial system.”
Others, however, think it’s all a publicity stunt:
“I do not do John McAfee-like stunts. I am an ideologically driven person who believes in Bitcoin & everyone who knows me can testify to this,” Balaji concluded.