Update 3/18 below. This article was originally published on March 17
BitcoinBTC, Ethereum and other major cryptocurrencies surged this week amid a banking crisis that could be about to trigger a massive earthquake from the Federal Reserve.
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The price of bitcoin topped $27,000 per bitcoin, up more than 30% since this time last week, hitting a level it hadn’t seen since June of last year. The bitcoin boom has also pushed up the price of ethereum and other major cryptocurrencies.
Now, after JPMorgan analysts said the Fed’s new banking support program could inject up to $2 trillion into the financial system, tech investor and former CoinbaseCOIN CTO Balaji Srinivasan has warned that the latest banking crisis could trigger hyperinflation in the United States and advised people to “Buy bitcoins now and withdraw your coins from exchanges.”
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Update of 03/13: Srinivasan bet $1 million that the price of bitcoin will surpass $1 million in just 90 days, which means a 3,600% increase in the price of bitcoin by June 16.
“Why is it going so fast? Well, hyperinflation is happening fast,” Srinivasan said. job in a long tweet explaining why he is so confident. “We have seen digital pandemics (COVID), digital riots (BLM) and digital bank runs (SVB). It will all happen very quickly once people check what I say and see that the Federal Reserve lied about how much money there is in the banks All the holders of dollars are destroyed.
Srinivasan had replied to a Twitter user with the handle @jdcmedlock which job that he “would bet anyone $1 million that the United States didn’t go into hyperinflation”. Srinivasan described the terms of the bet as follows, if bitcoin is worth more than $1 million in 90 days, it wins and if it is worth less “the counterparty gets the million dollars…We have to define hyperinflation In [bitcoin] against. [U.S. dollars] for all other fiat currencies can and will be inflated.”
Bitcoin – set up on behalf of @jdcmedlock by a professional poker player Isaac Haxton– and Srinivasan dollars will be held in escrow by crypto influencer and podcast host Jordan Fish, who tweets under the handle @Cobie.
“I’m transferring $2 million to USDC for the bet,” Srinivasan said. “I will do it with [@jdcmedlock] and one other person, sufficient to prove this point.”
“The central bank, banks and banking regulators have bankrupted us all,” said Srinivasan, who is credited with the severity of the Covid-19 pandemic outside the health facility, job to Twitter.
“They hid their insolvency from you, depositors. And they’re about to print $2 trillion to hyperinflate the dollar. In the digital age, that’s going to happen very quickly. So buy bitcoin now and withdraw your purse coins.”
Last week, Silicon Valley Bank (SVB), a regional bank specializing in lending to startups and tech companies, was shuttered following depositors’ panic over its insolvency. Signature Bank, a cryptocurrency-enabled bank, was also shut down by regulators, a move that may be due to concerns about its anti-money laundering controls.
Former U.S. Representative Barney Frank, co-author of the Dodd-Frank Banking Regulation Act, served on the board of directors of Signature Bank and said he believed the bank was shut down to warn against transactions with crypto companies. “It was just a way of telling people, ‘We don’t want you to deal with crypto,'” Frank told the PA.
Earlier in the week, another crypto-enabled bank, Silvergate, collapsed due to fallout from the shock implosion of major crypto exchange FTX last year.
The SVB collapse was the biggest U.S. bank failure since the 2008 financial crisis and sent shockwaves through the financial system as customers rushed to withdraw cash and authorities tried to restore the trust.
Over the weekend, the US Treasury Department, Federal Reserve and Federal Insurance Deposit Corporation (FDIC) said they would fully support all deposits to both SVB and Signature.
“Use of the Fed’s bank term funding program will likely be significant,” JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a note to clients seen by Bloomberg.
Srinivasan said he was sending a “bitsignal”, offering to donate $1 million in bitcoins, divided by 1,000 Twitter users who respond to his message, to draw attention to the banking crisis and what he is up to. feared is impending hyperinflation.
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“The whole banking system is lying to you about solvency,” Srinivasan said. “They try to make sure you don’t leave bitcoin before they print the money.”
Srinivasan added that “the speed of hyperinflation” can catch “people off guard”.
The Fed’s unprecedented action comes as it continues to battle inflation which hit a 40-year high last year. The Fed raised interest rates at an unprecedented pace in an attempt to stamp out inflation, but also put pressure on banks.
“Bitcoin benefits from fully-fledged government-guaranteed deposit insurance, inflation falling back to the 3% level, allowing the central bank to become less hawkish, and a regulatory overhang that has had a impact on stablecoins such as BUSDBUSD and, recently, USDCUSDC,” Markus Thielen, head of research and strategy at Matrixport, wrote in an emailed note.
“Bitcoin loves liquidity and is the primary cryptographic weapon of choice when those liquidity valves are alternated, like now.”
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