1) The Hyperinflation Tweet:
- Twitter founder, Jack Dorsey, posted this tweet about his fear of hyperinflation:
- Balaji, former Coinbase CTO & investor, responded, fully agreeing:
2) The Devil's Advocate:
- Twitter user that goes by James Medlock invited anyone to take him on a $1 million bet, arguing that hyperinflation will not happen:
3) The Wager
- Bilaji then quote-tweeted "James Medlock", saying that he will not only tkae this $1m bet, but give him 40:1 odds!
4) The Wager Breakdown
- Balaji believes hyperinflation will grow rampant in the USA by June 2023 (within 90 days)
- James Medlock disagrees.
- Balaji's offer: Balaji Puts $1m in escrow, James Medlock buys 1 Bitcoin and puts it in escrow. (trusted middle man or smart contract)
- If hyperinflation hits by mid June, 2023, Bilaji gets back his $1m, and gets the 1 Bitcoin from James' end, which Bilaji thinks will be worth $1m by then.
- So essentially, Bilaji believes 1 Bitcoin's price by June 2023, will be $1 million USD!
"Terms of the bet: ideally someone can set up a smart contract where BTC is worth >$1M in 90 days, then I win. If it's worth less than $1M in 90 days, then the counterparty gets the $1M in USD."
What Is Causing These Concerns?
- The recent banking crisis / fears, have caused the Federal Reserve to step in and reassure bank depositors that all is well, and their deposits are protected.
- How? By giving loans to banks! Just recently $300 billion 'created' out of thin air by the Fed, and given to banks, to help the liquidity crunch caused by their customers withdrawing en masse, due to bank run rumors.
Who Needs Netflix, We Have Twitter!
Now nearly anyone would take the bet against Bilaji, because Bitcoin trading at $1 million USD within 90 days sounds laughable and absurd.
But Bilaji is not betting so much on Bitcoin going up, but more so the dollar going down...
Hyperinflation happens when a currency gets so massively over-printed, or created out of thin air by the Fed, that the inflation rate goes beyond 50%.
If this actually were to happen, not only is 1 Bitcoin going to rocket up in USD terms, but a loaf of bread will also rocket up in USD terms. Everthing will!
Let's hope Bilaji is not right on this, because there will be a lot of losers, if the US dollar has to deal with hyperinflation.
..Check back in 90 days to document the winner, and we HOPE it is not Balaji, for the sake of the economy!
How To Take The Same Bet:
- Polymarket is a web3 prediction market
- They opened a Bilaji Bitcoin Bet market, where people can buy 'Yes' or 'No' tokens:
- Obviously, there is not much upside to betting for 'NO', since the majority think that likelihood of Bitcoin going to $1 million any time soon is a pipe dream.