Inflation in the United States and how it could affect the price of Bitcoin (BTC) are two of the biggest concerns of investors around the world. To illustrate, a prominent crypto personality has bet big on the future of the US economy: the former Coinbase executive recently paid out $1.5 million to settle a Twitter bet about possible hyperinflation in the American economy.
The US may not be experiencing hyperinflation, but the possibility of prices spiraling out of control seems to worry the Federal Reserve. The Fed raised interest rates by a quarter point on May 3 – to a 16-year high – and raised the target range for its benchmark to 5.25% from 5%.
As inflationary pressures continue, Bitcoin is still seen as a safe haven for many as crypto firms load the digital currency to combat inflation and turmoil in mainstream finance.
This week’s Crypto Biz examines the latest wild bets on bitcoin prices, inflation fears, and the jobs artificial intelligence could soon replace.
Balaji pays out his crazy $1 million bitcoin bet, 97% below target price
A closely watched bet between former Coinbase Chief Technology Officer Balaji Srinivasan and pseudonymous Twitter user James Medlock has been struck, with Srinivasan paying $1.5 million to settle. The bet began on March 17th when Medlock offered to wager $1 million on each other that the United States would not experience hyperinflation. A few hours later, the former Coinbase executive accepted the bet, claiming that a looming crisis would lead to US dollar deflation and thus a hyperinflation scenario, which would send the BTC price to $1 million. As part of the deal, Srinivasan paid Medlock $500,000, donated $500,000 to Bitcoin Core developers, and donated another $500,000 to nonprofit charity Give Directly.
MicroStrategy’s Bitcoin conviction is “strong” as it posts Q1 profit
Bitcoin investment strategy is stronger than ever at business intelligence platform MicroStrategy after the company posted its first quarterly profit since 2020. The company went green with a profit of $94 million, largely due to a one-time income tax benefit of $453.2 million. The company further reduced its leverage by repaying a $161 million Bitcoin-backed loan from the now-collapsed Silverage Bank. Quarterly results were also impacted by a 2.2% year-over-year increase in revenue to $121.9 million. MicroStrategy CEO Phong Lee said the company will continue its dual strategy of expanding business intelligence software and acquiring Bitcoin. The company believes its Bitcoin thesis is a “pretty good way to outperform the market.”
Coinbase Shares “Burned” Until US Rules Clear: Citi
Coinbase’s share price will continue to be “drained” until regulators set legal “rules of the road” in the United States, Citi analysts say. The bank downgraded shares of the crypto exchange to neutral from “buy” and lowered its price target, citing “too many unknowns” as the company battles with regulators. However, bearish sentiment in Coinbase’s stock isn’t stopping investment firm ARK Invest from increasing its exposure to the crypto exchange. ARK bought 168,869 shares of Coinbase for its nearly $8.5 million exchange-traded fund on May 1. In April, ARK looted 304,300 shares worth $17.5 million. The company previously bought 2.4 million shares for about $117 million in March.
Citi’s analysis came ahead of Coinbase’s Q1 earnings report, which was released on May 4.
7,800 jobs at IBM could be replaced by AI within years, the CEO suggests
IBM expects to take a “pause” in hiring “back-office” roles, which could instead potentially be automated by artificial intelligence. According to the company’s CEO, Arvind Krishna, back-office positions, such as human resources and accounting, will likely be the first to be automated by AI. Almost 30% of these positions will be “easily” replaced by AI over a five-year period, Krishna claimed in an interview. According to LinkedIn data, IBM employs 282,000 people worldwide. The number of employees without customer contact is almost 26,000.
Before you go: The average person’s wealth is “completely being destroyed by inflation,” says Arthur Hayes
According to Arthur Hayes, co-founder and former CEO of crypto derivatives exchange BitMEX, currency devaluation is gradually eroding the wealth of the majority of people. He believes the world’s largest economies will be forced to blow off the sizable national debt that has been accumulated through money printing in recent years. With long-term inflation looming, Haye’s investment thesis focuses on preserving wealth by investing in digital assets. You can watch his exclusive interview with Cointelegraph on our YouTube channel.
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