Former Coinbase CTO Warns of US Dollar Hyperinflation, Bet on Bitcoin Hitting $1 Million

$1 Million in Potential Hyperinflation

Balaji Srinivasan, former chief technology officer of major US cryptocurrency exchange Coinbase, warned on the 18th of the possibility of hyperinflation in the US, saying that bitcoin could reach $1 million in the next three months. (equivalent to 130 million yen).

I will take that bet.
You buy 1 BTC.
I will send $1M USD.
This is ~40:1 odds as 1 BTC is worth ~$26k.
The term is 90 days.
All we need is a mutually agreed custodian who will still be there to settle this in the event of digital dollar devaluation.
If someone knows how to do this… https://t.co/tcuBNd679T pic.twitter.com/6Aav9KeJpe

— Balaji (@balajis) March 17, 2023

It all started with a tweet posted by Twitter user James Medlock (pseudonym) on the 17th, saying, “I’m betting $1 million that the United States won’t go into hyperinflation.”

Srinvasan replied that he would accept the bet, offering the following conditions:

• Mr. Medlock buys 1 BTC
• Srinivasan transfers $1 million (USDC)
• Duration is 90 days
• Srinivasan wins if 1BTC surpasses $1 million in 90 days after setting up a smart contract
• If $1 million is not reached, Mr. Medlock wins and will be paid $1 million in US Dollars (USDC)

“1 BTC is worth about $26,000 (at the time of tweeting), so this is almost a 40:1 odds,” Srinivasan said. To prove his point, he added that he would make the same bet as the other person and have $2 million in USDC.

Medlock responded in a tweet that he had “gambled”.

bank failures and hyperinflation

There are many speculations as to why Srinivasan proposed the seemingly foolhardy bet, including an inflated bitcoin price.

He argued that banks were lying, just as they were during the 2008 financial crisis. He warned that banks had a serious problem of not having enough funds to cover their customers’ withdrawals, to the point where they could not be explained in a “typical fractional reserve” situation.

Srinivasan sees the global economy on the brink of rapid change as a series of US bank failures escalate into a banking crisis. The $1 million bet may be a way to draw attention to Bitcoin’s usefulness in this context.

This is what he calls out, showing various data.

When it comes to hyperinflation, he warns that it will get worse quickly. Many people are “attuned to a slowly deteriorating analog world,” but now that digitalization has advanced, he warns that “digital events go from 1 to 0 without warning.” “Like a bank run. But this is a central bank story.”

Although it cannot be simply compared with the United States, Argentina’s annual inflation rate exceeded 100% in February, the highest level in 30 years since hyperinflation in 1991.

Robert Kiyosaki’s view

Robert Kiyosaki, author of the best-selling “Rich Dad, Poor Dad,” has issued a warning about the state of inflation in the United States, accusing officials of not accurately describing the situation.

He argued on Wednesday that inflation in the United States was now systemic and would continue to rise. Fed Chairman Jerome Powell, who has previously described inflation as transient, accused Mr. Powell of “blatantly lying.”

Kiyosaki also predicted a further surge in inflation depending on how the US handles the banking crisis going forward. He said the government would likely print money to bail out banks, which would lead to further inflation.

He advocated investing in precious metals such as gold and silver as the “best option” to replace fiat currencies as inflationary problems worsened and the global economy became unstable. It claims to be a “valuable asset” that will soften the effects of the collapse.