The bet comes as a result of Balaji Srinivasan's belief in "hyperbitcoinization" — as he thinks major fiat currencies are on the brink of being "inflated away."
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The former CTO of Coinbase has made what may be the worst bet in crypto history — putting up $1 million in stablecoins against one Bitcoin, and wagering that U.S. hyperinflation will drive the price of Bitcoin to $1 million within 90 days.
He then made a similar bet with another unnamed person.
Balaji Srinivasan, who was at one point chief technology officer of Coinbase, was also a general partner at venture capital firm Andreessen Horowitz. He is a serial entrepreneur and angel investor with a lot of BTC.
The wager began with a March 16 tweet by James Medlock — a pseudonymous Twitter personality — said:
"I'll bet anyone $1 million that the US does not enter hyperinflation."
On March 17, Srinivasan replied:
"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."
Which you'll note lets "Medlock" reduce his million-dollar wager offer to what is now about $28,000, while still getting $1 million in cash — or more specifically $1 million in USDC stablecoins.
The bet comes as a result of Srinivasan's belief in "hyperbitcoinization" — which he said is defining hyperinflation in terms of BTC versus USD "because all other fiat currencies can and will be inflated away." He said:
"This is the moment that the world redenominates on Bitcoin as digital gold, returning to a model much like before the 20th century."
He predicts that first individuals, then investor funds, then small countries and eventually large ones will start buying Bitcoin.
"Why will it be so fast?" Srinivasan asked. "Well, hyperinflation happens fast… The thing is, people are still tuned to an analog world where things get gradually worse rather than all at once. But there isn't much forewarning for a digital event — it's 1 and then it's 0. Just like the bank runs, except this is the central bank."
Still there were a number of skeptics, among them Bloomberg columnist Matt Levine, a former Goldman Sachs investment banker. He tweeted:
"Wait so a guy is betting that Bitcoin will be at $1mm in 90 days by buying a Bitcoin at $1mm now? Do I have this right? i'm not the world's greatest trader or anything but if you have $1mm and you think bitcoin will be worth $1mm in 90 days the trade is to buy **40** of em."