Balaji Wins Bitcoin Wager With $1.5M Donations Including $500,000 To Bitcoin Core Development

Balaji Srinivasan said Tuesday his $1 million bet on Bitcoin (BTC) was settled early and he donated $1.5 million ($500,000 more than needed) to three different charities in compensation.

Former chief technology officer of crypto exchange Coinbase and former partner at venture capital firm Andreessen Horowitz, Srinivasan said in mid-March — shortly after the short-term collapses of Silvergate Bank, Signature Bank and Silicon Valley Bank — that he expects a banking crisis by a sizeable one Depreciation of the US dollar, triggering hyperinflation and Bitcoin rising to $1 million by mid-June. He provided $1 million to back up his prediction.

“I just burned a million to tell you they’re printing trillions,” he tweeted Tuesday afternoon. “I’ve spent my own money to send a proven, expensive signal that something is wrong with the economy and that there will be no ‘soft landing’ [Federal Reserve Chair Jerome] Powell promises – but something much worse.

He pointed out that current US Treasury Secretary Janet Yellen was with the Federal Reserve before the 2008 global financial crisis and did not sound the alarm, nor did then-Fed Chair Ben Bernanke. Today’s leaders, including Powell, are similarly denying, Srinivasan argued.

Crises, he reminded, can progress much faster than anyone imagines. Srinivasan claimed that it took the Fed two days to print $300 billion after the Silicon Valley bank collapse, two weeks for $500 billion to exit the banking system, two months to go from “patient zero” during COVID-19 ‘ to go to national lockdown, two quarters to go from mild recession to financial crisis in 2008, and two years until the Soviet Union collapses from superpower in 1991.

Others interpret the $300 million growth in the Fed’s balance sheet post-Silicon Valley Bank differently. Economist and former Fed staffer Danielle DiMartino Booth argued at the time that the rapid jump was not due to money printing but to an increase in the Federal Reserve’s discount window and other borrowing by the country’s banks.

Upon completing his $1 million bet, Srinivasan made three donations of $500,000, one to fund Bitcoin Core development at Chaincode Labs, one to Give Directly, and one to pseudonymous Twitter user James Medlock, who offered back in March to bet $1 million on the US not going into hyperinflation.

Update (21:35 UTC 2 May 2023): Added comment by DiMartino Booth.

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