Nonce Populi
Avi Burra
Balaji Srinivasan is an interesting character, to say the least. He can excellently articulate the fundamentals of Austrian economics and Bitcoin’s value proposition, while frustratingly pivoting almost next sentence to shitcoinery. It is a common pattern with him, traceable back almost a decade.
He also seems to possess the type of brain that produces a million scattershot ideas and predictions a minute: the occasional few that turn out to be correct, such as his long thread in January 2020 on the covid pandemic, tend to live in the public memory and have given him the aura of a modern day Nostradamus. “‘Balaji was right’ are the three scariest words in the English language” is a common refrain parroted in crypto and VC circles as a result. The multiple times his predictions are wrong are quickly forgotten (remember CityCoins?)
Balaji was back in the news yesterday with a somewhat confusingly worded, and on it’s face, a patently absurd bet. Responding to a tweet from an account (James Medlock) that bet $1M that the US would not enter hyperinflation, Balaji decided to up the ante in a seemingly bizarre fashion.
He proposed that Medlock put up 1 BTC and that Balaji would put up $1M (in USDC) in escrow for a 90-day period. If the US does not enter hyperinflation in that time period, Balaji loses and relinquishes his $1M. If Balaji wins, and this is the truly bizarre part, he suggests that the result of hyperinflation in the US in 90 days would be that the price of Bitcoin reaches $1M. That’s right 100M satoshis will be worth $1M in 90 days (and Balaji presumably gets to keep them in that scenario)
Since then, a twitter user has offered to escrow the 1 BTC on Medlock’s behalf, which Medlock has accepted. The bet, as it stands at the time of writing, appears to be placed.
I don’t think even the most uber-bullish bitcoin fundamentalist amongst us has even contemplated a $1M price tag by the summer of 2023, so it’s even more strange coming from a guy like Balaji. What could be going on here? One plausible theory could be that Balaji wants to use this as an opportunity to test an apex Keynesian brain-rot idea on inflation; that inflation is like Tinkerbell, it is only manifested if people truly believe it is happening, therefore willing it into existence. This idea was articulated by Jerome Powell very recently:
If that is the case, expect to be bombarded by a hyperinflation narrative from Balaji over the next 90 days, attempting to create this new reality. Rocket ship, anyone?
(Meme credit: @npub1Pvuugp6Fyj6T6Yeq9Ajzv28P54W07Sg6Jpxvzuu5Yc7Qmu9Edpkqm2D7A5
