- Former Coinbase CTO Balaji Srinivasan Bets $1 Million on an Anonymous Twitter Account That Bitcoin Will Trade $1 Million or More in 90 Days
- Srinivasan predicts impending hyperinflation and collapse of the US dollar
- The bet is on wildly unfavorable terms, with the other side of the bet, James Medlock, able to make massive profits risk-free by buying a call option with a $1 million strike for insurance.
- Bet comes nearly a year after Do Kwon’s infamous bet with another anonymous Twitter account at Luna’s expense
I’m no chemist, but one of the most potent mixtures known to mankind is that of arrogance and money.
In what might turn into the annals of internet history, former Coinbase chief technology officer and major angel investor Balaji Srinivasan bet $1 million that bitcoin would be worth $1 million or more in 90 days’ time.
The bet was confirmed on Twitter, taken on the other hand by anonymous meme enthusiast James Medlock. “(My wife) is the only person who knows I am James Medlock”, he posted in another tweet. “And I immediately told him about the bet”.
What is the condition?
The bet began when Medlock posted the tweet below, an innocuous tweet outlining his belief that the US would not experience hyperinflation, apparently in response to some crypto enthusiasts declaring that it was inevitable.
I’ll bet anyone $1 million that America will not enter hyperinflation
— James Medlock (@jdcmedlock) March 16, 2023
It should have ended there. But Srinivasan declared that he would “take that bet”. not only that, but wildly unfavorable terms. The setup is this: Medlock sends 1 BTC and Srinivasan sends $1 million to escrow today, which is later denominated in the stablecoin USDC.
The logic is that, if hyperinflation occurs and the US dollar falls, bitcoin will benefit and explode to the upside. Hence, the stakes shifted from hyperinflation to the price of bitcoin.
If bitcoin trades at or above $1 million on June 17, the kitty is Medlock’s. If it doesn’t, Srinivasan takes the reward.
I’ll take that bet.
You buy 1 BTC.
I will send $1M USD.
This is ~40:1 odds as 1 BTC is worth ~$26k.
Duration is 90 days.
All we need is a mutually agreed upon custodian that will still exist to settle the digital dollar in the event of its devalued.
If anyone knows how to do it… https://t.co/tcuBNd679T pic.twitter.com/6Aav9KeJpe
– Balaji (@balajis) March 17, 2023
the stakes don’t make sense
Obviously, this bet doesn’t make sense for a number of reasons. First of all, the original tweet was a joke, as $1 million would be worthless in the event of hyperinflation.
But its root is conditions. Given the constraints of the market, it’s a long shot of almost impossible odds. So much so, in fact, that a substantial portion of the bets could be guaranteed to Medlock in about 30 seconds risk-free, should he do so.
All he has to do is go to the market and buy a call option on bitcoin with a strike price of $1 million dollars on the same expiration date (June 17th) of the bet. It will cost money in comparison, and a whopping $1 million could be pocketed.
Of course, everyone knows this, and the ploy is nothing more than a publicity grab or some kind of self-marketing stunt by Srinivasan. He reportedly already has a large stockpile of bitcoin in any case, with the condition not being too important to him. Call me cynical, but there is also a fact that Srinivasan launched a podcast a month ago.
The funny thing is that Medlock didn’t have 1 BTC, which was worth $26,000 at the time. Poker player Isaac Haxton made a move to cover 1 BTC (without making any reverse moves). Medlock has also stated that he will donate a total of 70% of the winnings after taxes to charity – yet he made a cool $300,000 from a tweet that was a literal joke.
What must be done to win the bet?
If this bet were to be won, it is hard to imagine what the world would look like. A 3600% increase to $1 million per bitcoin in 90 days would take the market capitalization of bitcoin to around $20 trillion. That’s an astonishing number—for one thing, it’s more than all mortgage loans in America combined.
This happening in 90 days would mean a complete collapse of the economy and society as we know it. The banking sector evaporating into thin air and the US dollar plunging would throw the world into chaos, with almost unimaginable levels of crime, unrest and lawlessness.
People would lose their life savings and society would collapse near-instantly. And yet, there are bitcoiners cheering Srinivasan on this bet. go figure.
In an amusing twist of fate, the bet comes nearly a year after LUNA founder Do Kwon bet with another anonymous Twitter account that LUNA would be worth less in a year than it was then. This week marked one year, and I think any crypto investor knows what happened with LUNA.
I think some people have too much money and don’t know what to do with it.