Will Bitcoin Reach $1 Million in 90 Days? Balaji Srinivasan's Bold $2 Million Bet

In the world of finance, there are always those who are willing to take risks and make bold moves. One such individual is Balaji Srinivasan, who recently made a staggering $2 million bet on Bitcoin reaching a price of $1 million within 90 days, despite the volatility of the market. This move has raised eyebrows and sparked a heated debate among investors and cryptocurrency enthusiasts alike.

On Saturday, March 18, veteran investor and former Coinbase’s CTO, Balaji Srinivasan raised a mind-blowing alarm stating that the United States is quickly moving into hyperinflation. He placed a bet with James Medlock and another unnamed person, that Bitcoin would hit $1 Million in 90 days. The bet’s proposed terms state that if Bitcoin reaches $1 Million by the 17th of June 2023, Balaji Srinivasan would receive $1 Million USDC, but if Bitcoin fails to hit the $1 Million target by the 17th of June 2023, Balaji Srinivasan would lose $1 million in Circle’s USDC stablecoin to Medlock and another $1 Million to the other party - totalling to a whopping 2 Million US Dollars loss.

Some see Balaji Srinivasan’s bet as a shrewd investment move, while others view it as a reckless gamble as they question Balaji’s sanity. But regardless of what side of the fence you are on, there is no denying that Balaji Srinivasan’s bet has captured the attention of the financial world.

So, what exactly inspired this high-stakes gamble? And what does it mean for the future of Bitcoin? In this article, we will take a closer look at Balaji's bet, the reasons behind it, and what it means for the future of Bitcoin and cryptocurrency as a whole. So buckle up and get ready for a wild ride as we delve into the world of high-stakes investing and cryptocurrency.

Analyzing Balaji’s prediction

Many banks are currently 'under water' as they hold a lot of bonds on their balance sheet. These have plummeted in value because of the rapid interest rate increases by the Fed. The American Central Bank recently promised banks a facility called the Bank Term Funding Program (BTFP), offering loans to cover the holes in the bank's balances. Balaji believes that this situation will create a tipping point and the US and global fiat-based monetary system will await a similar fate as many less fortunate nations before us, such as Weimar Germany.

With his recent $1 million bet on Bitcoin, Balaji has become one of the most talked-about figures in the cryptocurrency community. Balaji’s revelation comes as the Fed has moved to money printing again amid a banking crisis unfolding in the US.

We also understand that Balaji predicted massive withdrawals from US banks starting this week, stating that “Bitcoin is the only global Heaven!”. His theory is that the ongoing banking crisis will transform into something much worse, much faster than most are expecting, ultimately leading to hyperinflation.

Some see his bet as a sign of confidence in the future of Bitcoin, while others see it as a reckless gamble. The impact of Balaji's bet on the Bitcoin market remains to be seen. While $1 million is a significant amount of money, it's a drop in the bucket compared to the total value of the Bitcoin market. However, Balaji's bet could still have a psychological impact on other investors.

Is Hyperinflation Possible?

Remember that sometime in October 2021, Twitter’s Jack Dorsey also warned that hyperinflation will soon happen in the U.S. and elsewhere in the world. “Hyperinflation is going to change everything. It’s happening,” he predicted. Many people disagreed with him. However, Balaji tweeted last Friday saying “Jack is right.” He predicts that the U.S. dollar will enter a point of rapid hyperinflation, and that the global economy will then “redenominate Bitcoin as digital gold.”

Recently, Silicon Valley Bank (SVB), a regional bank that specialized in startup and venture capital firms lending, was shuttered following panic among depositors that it was insolvent. Signature Bank, a crypto-friendly bank, was also shut down by regulators, a move that may have been due to concerns over its anti-money laundering controls.

Balaji Srinivasan is seemingly sure that the current looming bank crisis is leading to the deflation of the US dollar, and hyperinflation will raise the price of BTC to $1 million. He coined ‘hyperbitcoinization’ — defining hyperinflation in BTC vs USD terms. “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 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” says Balaji.

Counteractions:

Balaji’s shocking revelation has stirred up different opinions from different individuals. Definitely, different strokes for different folks!

James Madlock, a tax enthusiast and the “number 1 hyperinflation doubter” as stated in his Twitter bio has had a lot to say about this topic. But firstly, he took the $1 Million bet that the “US doesn’t enter hyperinflation.”

Ali_charts, a market analyst, said that $18,797,203,666,237 has to go into Bitcoin for it to reach $1 million within 3 months. The basic calculations do not account for variables such as depreciation in the US dollar value, order book depth, market liquidity, and other market dynamics.

Bitcoin entrepreneur and venture capitalist, Adam Cochran, also tweeted. Referencing the performance of cryptocurrencies during the onset of the coronavirus pandemic in 2020, Cochran said that Bitcoin would need a catalyst more extreme than that to outdo the 547% rally seen from 2020 to 2022.

Also, Alex Kruger, a popular market analyst voiced his opinion on Twitter saying, “Incredibly many are taking the Balaji $BTC to $1 million in 90 days view seriously because he is Balaji. This is an example of the cognitive bias ‘Appeal to Authority’. The chances of that happening are 0.0000%. The bet is insane unless there’s an ulterior motive. The issue is that a large percentage of the population is actually not intelligent enough to see this, and they are likely to gamble/invest thinking BTC may be going to $1 million soon.”

Bitcoin’s value proposition in such a scenario

If Bitcoin were to hit $1 million, its value proposition would likely center around the following factors:

• Store of value: With such a high price point, Bitcoin would likely be seen as a reliable store of value, similar to gold or other precious metals. Investors may be drawn to Bitcoin (over gold) as a way to hedge against inflation or economic instability.
• Decentralization: Bitcoin's decentralized nature would still be a key selling point, as it would provide a means of transferring wealth without relying on traditional financial institutions or intermediaries.
• Limited supply: One of Bitcoin's most attractive features is its finite supply. The total supply of Bitcoin is limited and pre-defined in the Bitcoin protocol at 21 Million. Meaning there will only ever be 21 million BTC in existence. As of today, there are approximately 16.7 million currently in circulation, thereby leaving 4.3 million more Bitcoin to be released. This scarcity could make it even more appealing to investors and collectors.
• Network effects: If Bitcoin were to reach such a high valuation, it would likely have strong network effects, meaning that its value would be bolstered by the growing number of users, merchants, and other entities using the cryptocurrency.
• Disruptive potential: As a decentralized currency, Bitcoin has the potential to disrupt traditional financial systems and enable new forms of commerce and economic activity. If Bitcoin were to reach $1 million, it would likely be seen as a powerful disruptor of the status quo.

Conclusion | FlagShip’s Point of View

Balaji Srinivasan's $1 million bet on Bitcoin is a bold move that has sparked a lot of conversation in the cryptocurrency community. Probably too extreme, but still scary. Directionally right but the timeframe seems insane! Bitcoin will most likely (maybe or maybe not) be needing more time and some more extreme catalyst than the “banking failure” to hit that price.

That being said, Balaji Srinivasan is a well-known investor and his bet could potentially attract attention from other investors and market participants. If Bitcoin were to rise to $1 million within 90 days, it would represent a massive increase in value and could signal a significant shift in the cryptocurrency market.

However, while there are significant risks associated with investing in Bitcoin, there are also significant potential rewards. Balaji's bet highlights the power of decentralized finance and the potential for digital assets to transform the financial landscape. As the world of cryptocurrency continues to evolve, we can expect to see continued experimentation and innovation in the space. Whether Balaji's bet on Bitcoin proves to be successful or not, it is clear that digital assets are here to stay and will play an important role in the future of finance.

Do you agree with Balaji Srinivasan that hyperinflation is happening now? And do you think Bitcoin will hit the $1 million target in 90 days? Join our Discord & let us know what you think!