Get Whatever You Can Into Crypto Because the Fiat Banks Are About To Die (Balaji Srinivasan)

Image Source – YouTube

Balaji, As he’s known on Twitter, is the former Chief Technology Officer at Coinbase. 

He’s a multi-talented entrepreneur

Investor

And computer scientist. 

The social media Bitcoin maxi has recently blown the internet away with the most absurd prediction ever. 

According to Balaji, as the U.S. dollar loses value rapidly over the next three months, Bitcoin could soar to $1 million by June 17th. 

Balaji Srinivasan has placed a $1 million bet with two people, including Twitter commentator James Medlock, to support his prediction. If Bitcoin doesn’t achieve this impressive growth, both individuals will receive $1 million in Circle’s USDC stablecoin. 

Balaji believes the global economy is approaching a dramatic shift he calls “hyperbitcoinization,” where the U.S. dollar experiences extreme hyperinflation and the world turns to Bitcoin as digital gold for stability.

If you’ve ever consumed Balaji’s content, you’ll know him as one of the safe guys. He doesn’t usually make predictions, and it’s a considerable safety signal when he says something about the market. 

But this time, he’s predicting that Bitcoin will be $1 million in the next 90 days.

 

Balaji – Source

“The infinite money is here. How we got here is a matter for history. The question is how to get out. Fed is launching their CBDC in July. You have about 90 days to exit. After that, you’re trapped. In a devalued digital dollar. It’ll be digital lockdown. Or Bitcoin independence.”

 

Balaji’s take on this is that Bitcoin will be a lifeboat that saves you. After that, the digital dollar will keep you trapped in the fiat money system. 

And he says you must decide between digital lockdown—or Bitcoin independence.

He compares this situation with the banks about to implode to what happened with “Uncle Sam Bankman-Fried,” who took people’s trust and deposits and invested them in risky assets. When customers wanted their money back, there was a massive hole.

Sam Bankman-Fried, the founder of now bankrupt crypto exchange FTX, experienced Crypto’s version of a bank run. Many FTX customers suddenly tried to withdraw their money from the exchange simultaneously because they feared FTX would collapse or become insolvent. 

FTX had no cash to meet all the withdrawal requests because Bankman-Frieds used customers’ deposits to trade which crashed the entire crypto market. 

The situation was similar to fractional reserve banking, where banks can’t give everyone their money back if they all ask for it in one go. But what happened to FTX is just as bad as the banks who invested in long-dated government bonds, expecting low-interest rates to continue. 

When the Fed suddenly raised rates in 2022, it crushed their portfolios, causing massive losses.

According to Balaji, to cover this up, banks used an accounting trick called “held to maturity” to pretend their investments hadn’t lost value. It created a growing time bomb across the industry, and the banks didn’t inform depositors that their money was gone.

“Held to maturity” means that a bank intends to keep a financial asset, like a bond until it reaches its maturity date. By classifying their investments as “held to maturity,” banks could pretend that these assets hadn’t lost any value, even though they had.

In other words, it allows banks to hide losses and make their financial situation appear better than it is.

 

Balaji – Source

“I don’t think I’ve ever made a price prediction. It’s just not what I do. I’m not a price guy or a chart guy. 

I’ve been in the public eye for ten years. I have tens of thousands of tweets, so there’s enough context there for people to see I’m not money-motivated.

I’m an ideological person.  

Silicon valley bank and Silvergate bank just collapsed overnight without warning. Boom done. 

A 200 billion dollar bank. 

People who were going about their business realised the money was gone. And blamed as if wanting their checking account back was a bailout or something, as if they had done something risky. 

How could this have possibly happened? 

Sam Bankman-Fried is the best way to understand this because he took people’s trust, took people’s deposits, and invested them into these sh*tcoins or whatever the heck he did but marked

it as if it was still there. 

But when customers came for it, there was a huge hole.” 

 

Balaji is saying that the situation in banking right now is dire. If everyone asked for their money back at once, the bank wouldn’t have enough to return it.

It’s created a growing problem across the whole banking industry. Banks should have informed their customers that their money was at risk. The biggest kept secret in banking is worsening, but nobody is telling the customers about it.

Balaji suggests moving your money into cryptocurrency, especially Bitcoin, as it could act as a lifeboat during the current financial crisis. He believes other cryptocurrencies are promising, but Bitcoin might be the safest choice. 

He highlights that Bitcoin was born out of the 2008 financial crisis. As the banking system faces new challenges in 2023, Bitcoin could play a vital role in safeguarding your finances during these turbulent times.

 

Balaji – Source

“What is the proposed action you should take ???

Get your coins or whatever you can into Crypto. I recommend Bitcoin at this point. It’s going to be the lifeboat for many different reasons. 

If you have other Crypto, great, but all of the Crypto tribalism is going to rise to an ideological level that we’ve never seen in a year or

two years or whenever this crisis is over. 

A lot of Fiat banks are about to die. 

They all trusted the fed simultaneously, buying the same asset from the same vendor and getting it devalued mainly by the Fed. And they’ll all go bust at once 

Bitcoin was born out of a crisis in 2008, and this is the 2023 banking crisis.”

 

Final Thoughts. 

There are those of you who will view Balaji’s bet as nothing more than a PR stunt. Maybe even market manipulation. 

He has a lot of Bitcoin, so that would make sense, and the social media traction he’s received pushing his narrative has been enormous.  

From today’s Bitcoin price (as of publishing), Bitcoin would need to increase by 3,471% to reach $1 million. 

For context, the 2017 Bitcoin rally saw an increase of 1,105%, while the 2020-2022 rally over two years had a 547% gain. 

The odds of Balaji’s bet coming in are 40 to 1. 

While it’s essential to consider his perspective, it’s as far-fetched as a penguin scaling Mount Everest.

And the idea that the banking system will die is a stretch.

Banks have been around for a very long time, so it’s not likely that they’ll disappear and be replaced by cryptocurrencies overnight.