Recently, a hefty Bitcoin bet was closed prematurely. Here are the details on the massive cryptocurrency position of Balaji Srinivasan, the former CTO of Coinbase…
Srinivasan’s $1 million Bitcoin position closed
Balaji Srinivasan stated that his $1 million bet on Bitcoin (BTC) was closed prematurely. He then said he donated $1.5 million to three different organizations as a compromise. This donation is $500,000 more than necessary. cryptocoin.com As we reported, Srinivasan opened such a BTC position in mid-March. Snirivasan is a former chief technology officer of Coinbase and a former partner of venture capital firm Andreessen Horowitz.
In March, he said he expected a banking crisis to trigger a massive devaluation of the US dollar, hyperinflation, and Bitcoin’s rise to $1 million by mid-June, shortly after Silvergate Bank, Signature Bank and Silicon Valley Bank went bankrupt. He put forward $1 million to support his estimate. In a tweet on Tuesday afternoon, he said:
I burned a million dollars to say they’re printing trillions. I spent my own money to send a provably costly signal that something was wrong with the economy and that it was going to be something much worse, not a ‘soft landing’ as Fed Chairman Powell promised.
Another financial crisis coming?
He pointed out that the current US Treasury Secretary, Janet Yellen, was at the Fed prior to the 2008 financial crisis. She stated that at the time, Yellen didn’t raise any alarms. He also stated that the Fed Chairman of the time, Ben Bernanke, did not point out any problems. Srinivasan argued that today’s leaders, including Powell, are similarly in denial. Srinivasan reminded that crises can progress much faster than anyone imagines.
The former CTO pointed out that after the Silicon Valley Bank bankruptcy, it took two days for the Fed to print $300 billion and two weeks for $500 billion to leave the banking system. He also claimed that it took two months to go into national quarantine 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 interpret the $300 million growth in the Fed’s balance sheet after the Silicon Valley Bank differently. Economist and former Fed employee Danielle DiMartino Booth argued at the time that this rapid jump was not due to money printing, but to the FED discount process and the increase in other borrowings of the country’s banks. Srinivasan closed his $1 million bet, while donating to the development of Bitcoin Core at Chaincode Labs. He also donated to Give Directly. Finally, he transferred money to Twitter user James Medlock, who in March offered to place a $1 million bet that the US would not experience hyperinflation. As a result, Srinivasan donated $1.5 million in three transactions, all $500,000.
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