May 2 (Cointime) - Earlier today, Balaji Srinivasan, former CTO of Coinbase, announced that he has fulfilled a high-profile bet he made in March about Bitcoin by donating $1.5 million of his personal funds. Srinivasan believes that this demonstrates that the U.S. economy is in dire straits, leading people to seek refuge in cryptocurrencies.   

According to a Cointime report, Balaji had initially placed a $1 million bet in March with Twitter pundit James Medlock. The terms of the bet were that if Bitcoin did not reach $1 million within 90 days, Medlock would receive $1 million in the form of Circle's USDC stablecoin.

Today Balaji disclosed that the bet has been "closed out by mutual agreement" and resolved ahead of schedule. As part of the settlement, he donated $500,000 to the charity Give Directly, $500,000 to Bitcoin core developers, and $500,000 to James Medlock.

“So, I settled the bet ahead of time and donated even more than I had committed,” Balaji wrote in a tweet today. “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 Powell [Federal Reserve Chairman Jerome Powell] promises—but something much worse.”

“The reason I did this was because I do believe in the public good, but unfortunately we can't rely on the public sector anymore to tell us when something's wrong.” Balaji added, explaining why donating the money before the 90 days were up.

Balaji insists the American economy is headed towards hyperinflation, and in such a scenario, people will turn to Bitcoin as a safe haven. 

“Personally, I think the US has a 10% chance of defaulting in months, 70% chance in years, a 19% chance in decades, and a 1% chance of making it to centuries.” Balaji  predicted.

Read full thread: 

I JUST BURNED A MILLION TO TELL YOU THEY'RE PRINTING TRILLIONS

The million dollar bet is now closed out by mutual agreement. I made $1M+ in provable on-chain donations, which you can verify by clicking the links below:

1) $500k to Bitcoin Core development via Chaincode: http://bit.ly/core500k

2) $500k to Give Directly: http://bit.ly/gived500k

3) $500k to Medlock: http://bit.ly/med500k

So, I settled the bet ahead of time and donated even more than I had committed ($1.5M vs $1M).

But why?

Well, I’m not a trader, I’m not John McAfee, and I’m not in the habit of publicly burning a million bucks. The reason I did this was because I do believe in the public good, but unfortunately we can't rely on the public sector anymore to tell us when something's wrong.

After all, Yellen knew[1] the 2008 crisis was coming, but didn't sound the alarm. Bernanke told us on April 10 2008[2] that it would be a "mild recession", but 158 days later the world economy collapsed. And Powell keeps saying today that we can still have a "soft landing"[3].

So 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 Powell promises — but something much worse.

Watch the video above, read the post below[4], and decide for yourself.

[1]: https://archive.is/CMsIM

[2]: https://archive.is/N9ETF

[3]: https://archive.is/1yWtb

[4]: https://balajis.com/fiat

MONTHS, YEARS, DECADES, OR CENTURIES?

If trading, too early is being wrong.

But if preparing, hell is truth seen too late.

So I don't care that much about timing.

Being early on something like this is being right.

That said, when does the fiat crisis kick off?

It's famously difficult to nail the timing.

Permabears have arguably been wrong for 15 years.

Till they were so very right on inflation.

Personally, I think the US has a 10% chance of defaulting in months, 70% chance in years, a 19% chance in decades, and a 1% chance of making it to centuries — whether that default be explicit (via something like the debt ceiling) or more likely implicit (via money printing).

But 10% is very high.

Then again, due to the debt ceiling issue alone...

Larry Summers thinks it's 2-3% in months [1].

Markets have it at an all-time high of 149bps[2].

And even WaPo writers say it's high[3].

SO: HOW FAR AWAY IS DEFAULT?

Is US sovereign default months, years, decades, or centuries away?

I'm interested in your view.

For the purposes of this poll, please include both explicit hard default (like the debt ceiling) and implicit soft default (like money printing) in your estimate.

CITATIONS

[1]: https://archive.is/5YnHo

[2]: https://investing.com/rates-bonds/united-states-cds-1-year-usd

[3]: https://archive.is/wip/n4gW7