In case you haven't heard by now, the former Chief Technology Officer of Coinbase Balaji Srinivasan has made a bet via Twitter regarding the price of Bitcoin. He is betting that, due to incoming hyperinflation, the price of 1 BTC will reach $1 million USD within 90 days. He has made the bet with "James Medlock," a pseudoanonymous Twitter user.
As you can see, it all began with Medlock's Tweet stating that the US does not enter hyperinflation -- rapidly extreme price increases within an economy. By definition, it is typically characterized by increases of more than 50% on a monthly basis. The United States Federal Reserve has a target inflation rate of 2%, a level which has not been seen since February 2021.
Anyways, back to the bet. Medlock responded to Srinivasan by saying, "Sir, I believe we have ourselves a deal." CZ even stepped in, offering to assist in escrow:
The logistics are still being worked out, but Srinivasan further expands upon the bet and his hyperinflation thesis:
I am moving $2M into USDC for the bet. I will do it with Medlock and one other person, sufficient to prove the point. See my next tweet. Everyone else should just go buy Bitcoin, as it'll be much cheaper for you than locking one up for 90 days. Terms of the bet: ideally someone can set up a smart contract where BTC is worth >$1M in 90 days, then I win. If it's worth less than $1M in 90 days, then the counterparty gets the $1M in USD. HYPERBITCOINIZATION We have to define hyperinflation in BTC vs USD terms because all other fiat currencies can and will be inflated away. That is hyperbitcoinization. This is the moment that the world redenominates on Bitcoin as digital gold, returning to a model much like before the 20th century. What's going to happen is that individuals, then firms, then large funds will buy Bitcoin. Then sovereigns like El Salvador (@nayibbukele) and tiny crypto friendly countries. The big move will be when a US state like Florida or Texas, or a "normal" country like Estonia, Singapore, Saudi, Hungary, or UAE buys BItcoin. And when @narendramodi tells India's central bank to buy Bitcoin, even as a hedge, it's over. Why will it be so fast? Well, hyperinflation happens fast. We've seen digital pandemics (COVID), digital riots (BLM), and digital bank runs (SVB). 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. The thing is, people are still tuned to an analog world where things get gradually worse rather than all at once. But there isn't much forewarning for a digital event — it's 1 and then it's 0. Just like the bank runs, except this is the central bank. There are however two sources of forewarning. First is the chart of the long-term depreciation of USD vs BTC, from less than $1 USD per BTC to $25k USD per BTC. Much of the smart money has been voting against the dollar since the financial crisis. The end is a digital drop off a cliff, almost invisible on the chart — but highly visible in the world. This tweet is the second forewarning. It'll be ignored and mocked by people who still trust the US establishment, even after the last few years. Who can't imagine that the US banks and media could be lying to them to this extent. But they are. Just as they did in 2008, and over the last ten years. The digital devaluation of the dollar is coming and it's going to be intense.
I'd like to put that $1 million Bitcoin price into perspective here. At that price, the total market capitalization of Bitcoin would be at roughly $19 trillion. The actual number is a bit higher, like $19.13 trillion, but I will just say 19 for simplicity. The total gross domestic product, the total value of the goods produced and services provided in a country in a given year, of the United States in 2022 was $25.46 trillion. The total mortgage debt outstanding in the United States, as of the end of 2022, was $19.33 trillion.
As you may expect, Bitcoin bulls are taking this price prediction and running hogwild with it. Skeptics are of course deeming it a pump, fueled by self-interest. Myself, I don't see Bitcoin hitting $1 million within the next 90 days but I do see a gradual continued price appreciation, marked by sharp rises and sell-offs. These types of price movements are simply characteristic of Bitcoin, as it its life as a currency as young and speculators continue to speculate and hodlers continue to hodl.
I can tell you this: if Bitcoin does indeed hit a million in the near future, I will be sleeping much easier at night and riding off into the sunset a little bit earlier than expected. The mathematics would be much simpler too: a hundred million satoshis is one Bitcoin, so one satoshi = one cent, 100 satoshis = 1 dollar, etc. But, at the end of the day:
1 BTC = 1 BTC
If you are looking to follow the bet, I would suggest following the accounts of those involved for the latest updates:
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