5/1/2023: Bitcoin $1M Update

$BTC still stuck at $28K

Remember that “BTC to $1M in 90 days” bet? 45 days have passed and we are nowhere near $1M. Presently, BTC is trading slightly below $28K. It will have to climb 3471% in the next 45 days to reach $1M. In the meantime, Balaji is already walking back his prediction. He was so sure about himself that US Dollar is going to collapse in 90 days that he coined the term HYPERBITCOINIZATION. But now he suddenly turned probabilistic and gave the fiat crisis a 10% probability happening in months. Well, after this episode I hope he loses all his reputation because he deserves that. A venture capitalist who has all the money in the world tried to destabilize the very system that made him rich and made outrageous predictions to attract attention and made himself even richer???!!! There is a real moral crisis among the rich and famous in Silicon Valley who abdicate their responsibilities of being a positive force of humanity. We will have to wait another 45 days to see the final outcome but from his own tone, BTC $1M is not going to happen in 45 days.

It is true that the world’s trust in the US dollar system is fading. The US sanction on Russia created a confidence crisis for the US dollars as the Russian Oligarchs suddenly found themselves not able to transact with US dollars. The US dollars were considered neutral but the sanctions politicized the dollar system and threatened the dollar’s hegemony. In the past few months, many countries started using Chinese Yuan to settle trades. The Chinese Yuan is currently pegged to the US dollar. But as the de-dollarization continues, there’s an increasing threat that the Chinese Yuan will replace the US Dollar as the world’s reserve currency and its currency doesn’t have to peg to the US Dollar any more. This type of change usually happens in a multi-decade process (instead of months like Balaji originally predicated) but once it happens, the US can no longer print money freely without consequences. The current Debt-to-GDP ratio of  the US is already back to the World War II level. With all the baby boomers retiring in the coming decade, the entitlement spending and unfunded pension obligations are likely to make the Debt-to-GDP ratio even worse. We can only hope that the advances in technology will make us so much more productive and some political reforms will take place to rein in government spending. It is a tough road ahead for the US Dollar system but that doesn’t necessarily mean BTC is the right solution. It’s like saying capitalism is not the right solution so we should switch to communism. We all know how catastrophic it was in Russia, China and North Korea when they made that switch.

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Update: Coincidentally, one day after my post, Balaji posted on Twitter that he has settled the bet by paying out $1.5M dollars. SMH.