Balaji Srinivasan on Tuesday said his $1 million bet on bitcoin (BTC) has been closed out ahead of time, and he has donated $1.5 million ($500,000 more than required) to three different entities as settlement.
The former chief technology officer at crypto exchange Coinbase and a former partner at venture capital firm Andreessen Horowitz, Srinivasan in mid-March – shortly after the failures in short order of Silvergate Bank, Signature Bank and Silicon Valley Bank – said he expected a banking crisis to trigger a sizable devaluation of the U.S. dollar, hyperinflation and a surge in bitcoin to $1 million by mid-June. He put up $1 million to back his prediction.
"I just burned a million to tell you they're printing trillions," he tweeted Tuesday afternoon. "I spent my own money to send a provably costly signal that there’s something wrong with the economy, and that it's not going to be a 'soft landing' like [Federal Reserve Chair Jerome] Powell promises – but something much worse."
He noted that current U.S. Treasury Secretary Janet Yellen was at the Federal Reserve ahead of the 2008 global financial crisis and failed to sound any alarms, nor did the then-chairman of the Fed, Ben Bernanke. Today's crop of leaders, Powell among them, are similarly in denial, argued Srinivasan.
Crises, he reminded, can move far more quickly than anyone imagines. Srinivasan claimed that it took two days for the Fed to print $300 billion following the Silicon Valley Bank failure, two weeks for $500 billion to leave the banking system, two months to go from "patient zero" to national lockdown during COVID-19, two quarters to go from mild recession to financial crisis in 2008 and two years for the Soviet Union to go from superpower to collapse in 1991.
Others have a different interpretation of the $300 million growth in the Fed's balance sheet post-Silicon Valley Bank. Economist and former Fed staffer Danielle DiMartino Booth argued at the time that the quick jump was not money printing, but instead a surge in Federal Reserve discount window and other borrowings by the nation's banks.
In closing out his $1 million bet, Srinivasan made three $500,000 donations, one to fund Bitcoin Core development at Chaincode Labs, one to Give Directly and one to pseudonymous Twitter user James Medlock, who back in March offered to bet $1 million that the U.S. would not experience hyperinflation.
Update (21:35 UTC, May 2, 2023): Adds comment from DiMartino Booth.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.