Balaji gives various likelihoods for the timeframe in which a calamitous event may wreak havoc on the US banking system.
With Bitcoin currently trading at $29,150, the asset will need to appreciate by over 3000% for Balaji Srinivasan – former CTO of Coinbase – to win his $1 million Bitcoin bet by June 17.
The investor and entrepreneur spoke at Consensus 2023 about his motivations and rationale behind the bet, and the likelihood that he may actually be right.
Is $1 Million Bitcoin Still in Play?
Before the Consensus Mainstage via video on Friday, Balaji reminded the audience that the great financial crisis took the world by storm in September 2008. This was just five months after the central bank chairman of the time – Ben Bernanke – predicted the world may be in for a “mild recession.”
Balaji connected that to how Federal Reserve chairman Jerome Powell predicted in April 2023 that the world may be in for a “mild recession” following a string of major bank failures in the previous month.
“I don’t know how many months – years – we have,” said Balaji. “If you think like a trader, you think that too early is the same as being wrong. If you think like a prepper, hell is truth seen too late.”
At the time of his bet, Balaji rested his bullish thesis on the US dollar entering a hyperinflationary death spiral in response to the banking crisis. While he still doesn’t have an exact timeframe for when such a collapse will occur, he believes it’s “better to be early” when trying to bind the downside.
“Just to quantify it, I think we have a 10% chance of a very serious issue in months, 70% in years, 19% in decades, and 1% it takes a century or so on,” he added.
Fed Lied; Banks Died
For the executive, his bet was more of a marketing spend to “raise awareness of the fiat crisis,” and is really just a “directional signal.” He said it’s possible that the financial fallout takes place in “900 days” or even “90 months,” or that Bitcoin’s exact end point falls short of $1 million.
If his prediction comes true, however, he is sure that he won’t be the one to have caused the collapse through a series of tweets. The Fed, he says, is behind the collapse for having incentivized financial institutions to invest in real estate through easy liquidity in 2021, before tightening interest rates and crashing treasuries and mortgage-backed securities in 2022.
“Trust the Fed, end up dead,” he said. “Fed lied, banks died.”