A million dollar Bitcoin in ninety days?
On Friday, Balaji — known in the crypto community as a popular thinker, ex-Coinbase CTO, and recently the author of The Network State — placed a $1M bet in USDC on Bitcoin reaching $1M within 90 days.
I will take that bet.— Balaji (@balajis) March 17, 2023
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/hhPr522PQu pic.twitter.com/6Aav9KeJpe
Balaji has a reputation as a brainiac and a highly respected figure, so such a statement shocked many. It followed his previous tweet title #TheBitSignal, in which he offered another $1M for the top 1000 retweets ($1000 per tweet).
Here are my thoughts:
I have been 90% invested in Bitcoin since 2016, so I’m all for sending the BitSignal. But will Bitcoin reach $1M in three months?
First, Balaji is quite wealthy and surely didn’t post this bet for financial gain — quite the opposite. As I write this, the bet tweet has almost 10M views. My friend referred to it as a “$2M-worth campaign for $1M,” and I think that’s pretty accurate. I agree with Balaji’s arguments for having Bitcoin on your balance as insurance against a system collapse. Will hyperinflation happen in 90 days? I don’t know.
It’s important to note that if hyperinflation occurs, it will be the Dollar, Euro, and Pound that are falling in value, and $1M will not buy as much as it does now. We cherish the cultural meme of a “millionaire,” but $1M is now the price of an apartment in a big city. What we think of when we say “millionaire” is probably closer to Ultra-HNWI (high net worth individual), which is considered $30M in assets above the primary residence. So, will Bitcoin be worth $1M? One day for sure, but I can’t promise how much it will buy.
So, don’t obsess over the million-dollar milestone. It’s symbolic, for sure, but it’s not the point. I live in Estonia. Here’s some recent data for context:
Estonia’s annual inflation rate increased for the first time in five months to 18.6% in January 2023 from the nine-month low of 17.6% in December 2022, with housing prices rising 31.6% after a prior 21.6% growth.
This is devastating for many people. For example, 31.6% inflation means that $1M now buys an apartment that was worth only $759k a year ago. Unfortunately, our brains are not good at math, so it’s easy to overlook these shocking numbers.
Balaji tweeted in the context of banks facing severe problems over the past few weeks. The FED saved the day, but at what cost? By printing more money, despite their previous promise not to do so to keep inflation under control. Can you predict the outcome? Your “digits” may be safe in your bank, but is your purchasing power?
So, let’s wrap it up:
Don’t wait for Balaji’s prediction to be fulfilled. Hope it will not happen because it will not be pleasant. However, take his advice and acquire some bitcoins before it’s too late.