Former Coinbase CTO Makes $2M Bet on Bitcoin’s Performance
Former Coinbase CTO, Balaji Srinivasan, bets $2M that coinbase will exceed $1M value within 90 days.
Balaji Srinivasan Shows Confidence in Bitcoin’s Short-Term Potential
The market is in a really weird place: bank failures, FDIC takeovers, and bailouts larger than the 2008 liquidity crisis. Turns out that’s really good for cryptocurrency, and Bitcoin in particular. Former Coinbase CTO Balaji Srinivasan thinks it’s really good for BTC, as he took up a bet on Twitter for $2M that Bitcoin’s price would exceed $1M in the next 90 days.
This bold move by Srinivasan highlights just how optimistic he is on Bitcoin's future and the wider cryptocurrency market, and more importantly, how dire the situation is for the US Federal Reserve. As the former Coinbase CTO, Srinivasan has been a vocal advocate for the cryptocurrency and has previously predicted that it could reach a price of $1 million in the future. With this bet, Srinivasan is putting his money where his mouth is and locking it into a timeline.
Navigating the Risks of the Federal Reserve and Currency Debasement
You may be thinking “this sounds insane,” and you’d be right! This is a terrible bet. I’m not in the business of telling people what is going to happen with asset prices, but the Federal Reserve only deployed $300B. That’s far less than the nearly $5T that was printed through COVID, and that combined with collapsing supply chains and massive geopolitical strife through war has resulted in <10% inflation annually. The relationship between the Fed’s actions and interest rates is not simple, and no one has a good model for what this does to inflation, but I’d have to imagine this wouldn’t result in the thousands of percent changes in immediate real USD value that would be required to make Bitcoin worth $1M USD.
In Balaji’s defense, currency debasement tends to happen slowly, then all at once. Almost every paper currency in the history of the world has collapsed under the weight of debasement, and the current economic paradigm that the government runs everything through, Modern Monetary Theory (MMT), is built around this. Essentially, MMT says “there’s no debt too big since we can just debase the currency”. And right now, the government is seeing incredible system risk due to their rapid interest rate hikes.
Ultimately, I think Balaji just burnt $2M. I’d gladly take that bet. But I think he is directionally correct–the Fed is actually leading us down a path that results in much more harm than good.