“You buy 1 BTC. I will send $1M USD.”
Those were the stakes that venture capitalist Balaji Srinivasan proposed over Twitter to pseudonymous writer and self-described “tax enthusiast” James Medlock on March 17. The bet? Within 90 days, one bitcoin will be worth $1 million.
Medlock, who had jokingly tweeted earlier that he would “bet anyone $1 million dollars that the US does not enter hyperinflation,” quickly accepted the terms. With bitcoin hovering around $26,000, Srinivasan had made an approximately 38–1 wager that “hyperbitcoinization” would unfold over the next three months as the Federal Reserve devalued the U.S. dollar to backstop the nation’s shaky banks with new infusions of cash.
Critics have said the bet is a promotional ploy to launch a new media brand or to pump the price of bitcoin to increase the value of his holdings. His doubters include George Mason University economist Tyler Cowen, who predicts that “the US will muddle through its current problems and patch up the present at the expense of the future,” and bitcoin mega-booster Saifedean Ammous, author of The Bitcoin Standard, who writes “I feel dirty sounding bearish on bitcoin, but I do not think bitcoin will hit $1m in 90 days & and I do not think the dollar can possibly hyperinflate this quickly.”
So what is Srinivasan thinking?
Find out this Thursday at 1 p.m. Eastern as Srinivasan joins Reason‘s Zach Weissmueller and economist Lawrence White, author of Better Money: Gold, Fiat, or Bitcoin? to discuss the bet and their analyses of the state of the U.S. banking system. Watch and leave questions and comments on the YouTube video above or on Reason‘s Facebook page.
Balaji Srinivasan’s bet with James Medlock—https://twitter.com/balajis/status/1636822077775941633
Federal Reserve to provide additional funds for banks, backstopped with $25 billion from the Treasury—https://archive.is/qrZYB#selection-4839.93-4839.251
Bloomberg: Fed could inject up to $2 trillion—https://www.bloomberg.com/news/articles/2023-03-16/jpmorgan-says-fed-s-loans-will-provide-2-trillion-of-liquidity
Study on uninsured bank deposits in 2023—https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4387676
Bloomberg: Fed discount window lending surpasses $164 billion -https://www.bloomberg.com/news/articles/2023-03-16/banks-rush-to-backstop-liquidity-borrow-164-8-billion-from-fed#xj4y7vzkg
St. Louis Fed: Fed balance sheet since 2004—https://fred.stlouisfed.org/graph/?id=WALCL
Tyler Cowen: The banking crisis won’t wreck the economy—https://marginalrevolution.com/marginalrevolution/2023/03/this-banking-crisis-wont-wreck-the-economy.html
Ammous Safeidean: A bank crisis is deflationary—https://twitter.com/saifedean/status/1638453109033664513
FedNow Service launches in July: https://www.federalreserve.gov/newsevents/pressreleases/other20230315a.htm
Jerome Powell addresses banking crisis and rate hikes—https://www.youtube.com/watch?v=WK6EfnYkejc
Janet Yellen voices concern for a ‘few’ banks—https://www.youtube.com/live/je-6S97KKqY?feature=share&t=4049
DeSantis announced Digital Bill of Rights—https://www.youtube.com/watch?v=mLPcqRS8978