We talked to the guy behind the 'most profitable shitpost in history'
How a joke about hyperinflation turned into a million-dollar bitcoin wager.
March 22, 2023
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If the entire global financial system were to collapse, at least one person would be left smiling — Balaji Srinivasan, the venture capitalist and former Chief Technology Officer of Coinbase, who’s betting $2 million that the U.S. dollar will be worthless in just 90 days.
Although Bitcoin is already up 69% since the beginning of the year, Srinivasan recently announced two million-dollar bets with pseudonymous Twitter user James Medlock and another, unnamed counterparty that one Bitcoin will be worth more than $1 million three months from now — a nearly 40-fold increase from its current price.
Balaji announced the bet after Medlock tweeted, "I'll bet anyone $1 million dollars that the US does not enter hyperinflation." Many Twitter users speculated (and Medlock later confirmed to Coinage) that the post was a joke, as $1 million of hyperinflated currency would represent very little actual buying power.
Medlock, who focuses mostly on tweeting about tax policy and whose real name and job are unknown, confirmed in a written response to Coinage that he never expected anyone to take his post seriously.
"It’s been a lot of fun. Even if for some reason it falls through or I don’t get the money in the end, it’s been worth it for the memes," he told Coinage.
Not one to choose a Bored Ape as his profile picture, Medlock instead represents himself online using a drawing of Austro-Hungarian economist Karl Polanyi and has amassed nearly 80 thousand followers on Twitter by discussing progressive economic policies. Medlock describes himself as a "tax enthusiast," and in the past has espoused anti-crypto views.
"I have no problem with people being enthusiastic about the technology itself — as a tax enthusiast, I can absolutely relate to people being interested in niche things that don’t have obvious appeal from the outside," Medlock said. "But I don’t love that one of the main use-cases seems to be tax evasion."
Crypto criticisms aside, Medlock stands to financially benefit greatly if he ends up winning the bet, though he's stated his intention to donate 70% of the winnings to charity and happily pay whatever taxes he owes.
Meanwhile, for Srinivasan, his bet appears to be an attempt at bringing more attention to an alleged government plan to consolidate its control on the banking industry.
"This is a digital Pearl Harbor on all dollar holders," Srinivasan said during an interview with podcaster Anthony Pompliano, highlighting that he expects rampant money printing to exponentially debase the dollar. Srinivasan had previously offered a total of $1 million to the 1,000 best Tweets that "alert us to the stealth financial crisis," and urged his followers to "buy Bitcoin *now* and get your coins off exchanges."
One day later, Srinivasan accepted Medlock’s joke offer of a million-dollar bet, claiming that "...the central bankers, the banks, and the bank regulators have lied to all dollar holders and depositors," and that, "the problem is that there isn't enough in the banks on a mark-to-market basis to cover withdrawals."
Srinivasan sees a potential global financial crisis as a major inflection point for widespread Bitcoin adoption, claiming on Twitter that "everything will happen very fast once people check what I'm saying and see that the Federal Reserve has lied about how much money there is in the banks."
Financial analysts and crypto enthusiasts across the Internet are struggling to make sense of Srinivasan’s motivation for making the bet. Of course, banks never have deposits fully in cash, and after all, if he thinks Bitcoin is going to hit $1 million in just three months, why wouldn’t he just use his money to buy more?
Srinivasan has publicly denied that he has any ulterior financial motive for placing the bets, stating that he has "absolutely zero profit motivation" and the reason he’s doing this is to, "alert innocent Americans and dollar holders in the style of Paul Revere that the printing is coming."
If this is a play for publicity, it’s certainly working. The total amount of earned media impressions since Srinivasan started speaking out has now surpassed $1.1 million, according to estimates provided to Coinage from Apex Marketing Group. In that sense, even if Srinivasan loses, he’s already won.
To be fair, Bitcoin has made similar price moves before. In 2017, Bitcoin’s price exploded over 2,000%, from under $1,000 to over $20,000 in just a year. But a 3,500% increase in just three months would be unprecedented in Bitcoin’s recent history. It would also push bitcoin’s market cap to nearly the same total sum of the entire market cap of stocks that trade on the New York Stock Exchange.
Medlock, for his part, is completely confident in his side of the bet. Prediction markets largely agree; over $1.3 million in has been wagered on the decentralized wagering platform Polymarket, with the market reflecting a 99% chance that Medlock wins.
"The global economy is definitely going to have a bumpy ride in the near future, but I think Balaji is nearly universally wrong," he said, agreeing with the estimated 99% chance he wins.
And as for that 1%? What would Medlock do if he were to lose?
"Whatever I need to do to get by in the post-apocalyptic hellscape that the world has apparently become."