6 ms·

Balaji bets $1M that USD will suffer hyperinflation within 90 days

24 points by JVillella 4y ago

deleted 4y ago
[deleted]
quickthrowman 4y ago
How many bitcoins can I bet? Balaji is offering to sell a put on BTC with a $1M strike price (which is ITM by $974k) and the underlying is at ~$26k, 90 days to expiration. All you have to do to buy the put is put up 1 BTC ($26k) to potentially win $974k. I don’t think he thought this all the way through.
- JVillella 4y ago
  I think he is saying if it hyper inflates (they need to agree upon exact criteria) then he gets his 1M back + 1BTC. I don't think he is saying 1BTC > 1M USD.
  - quickthrowman 4y ago
    Obviously he’d get his $1M back, why wouldn’t he? I never said he wouldn’t… He is selling a BTC put that expires in 90 days and is worth $800-900k for $26k, that’s all I said. Balaji is betting the hyperinflation makes the BTC worth more than $1M hyper inflated US dollars. If hyperinflation happens, the BTC/USD pair will go up in dollar value.
    - JVillella 4y ago
      That's not what I am saying. I am saying that BTC may be worth 100k, and the USD 500k and he still wins the bet (under the interpretation I mentioned above).
      - JVillella 4y ago
        Nevermind he just updated the thread. >Terms of the bet: ideally someone can set up a smart contract where BTC is worth >$1M in 90 days, then I win. If it's worth less than $1M in 90 days, then the counterparty gets the $1M in USD. https://twitter.com/balajis/status/1636827051419389952?s=20 https://twitter.com/balajis/status/1636827051419389952?s=20
        deleted 4y ago
        [deleted]
- sharemywin 4y ago
  wonder if there's a way to pool funds like some kind of ethereum contract. I know ethereum won't talk to bitcoin, but maybe there's a way to do it?
  - JVillella 4y ago
    There's something called WBTC[1]. It's very popular. [1]: https://wbtc.network https://wbtc.network
    - Laaas 4y ago
      EDIT: This comment is entirely wrong! Disregard. Do note this isn't _real_ wrapped bitcoin. It's essentially a stablecoin which price matches a bitcoin; it is not backed by any bitcoins unfortunately. Real wrapped BTC would require a decentralised bridge which isn't exactly trivial.
      - JVillella 4y ago
        Wrong :) Look at the website.
        Laaas 4y ago
        FWIW it seems to be centralised, making use of a custodian, albeit it is backed by BTC as you say.
        JVillella 4y ago
        Yes, that's right. It's like USDC in that sense.
        JeremyBanks 4y ago
        [dead]
gus_massa 4y ago
Hyperinflation is usually defined as an increase of 50% monthly (i.e. from 100% to 150%). x40 in 90 days is in increase of 240% monthly (i.e. from 100% to 340%). So it's a lot of inflation. This is not unheard, but it's very high and usually happens in countries with bigger problems. https://en.wikipedia.org/wiki/Hyperinflation#Notable_hyperinflationary_periods https://en.wikipedia.org/wiki/Hyperinflation#Notable_hyperin... [Hi from Argentina, our peak was in July 1989 with 196% (i.e. from 100% to 296%), but the peak was short, we didn't have three months with 200% of mensual inflation. See the graph in https://es.wikipedia.org/wiki/Hiperinflaci%C3%B3n_argentina_de_1989_y_1990 https://es.wikipedia.org/wiki/Hiperinflaci%C3%B3n_argentina_...]
JeremyBanks 4y ago
[dead]
mark242 4y ago
Just how out of touch is this guy? 50% inflation MoM within the next 90 days? Does he not understand the multiple system shocks that would need to take place for that to even come close to reality? Balaji, please - get out of your bubble. Go talk to your neighbors. They're all concerned about where to go for their kids spring break, the next episode of Mandalorian, and whether or not their bracket is still in contention. Let's game out what it would take for 50% inflation MoM -- you'd need severe supply issues up and down for every possible good, including goods created domestically. You'd need the Fed to fire up the printing presses in a way that surpasses even 2008, which, good luck on that one. You'd need interest rates to go negative. You'd need the real estate market to do a 180 from "nothing's really selling right now" to "people can't buy houses fast enough". You'd need a confluence of black swan events to happen globally in order to knock the dollar from being a reserve currency. How does that possibly happen? Just dumb, all around.
- KRAKRISMOTT 4y ago
  He will either lose his money or be known as the next George Soros (those who are old enough may remember that he once broke the British pound and several other minor currencies)
- brwck 4y ago
  [flagged]
- quickthrowman 4y ago
  I’m convinced he is trolling, he posted another tweet where he says this: > This isn't your typical fractional reserve situation. The problem is that there isn't enough in the banks on a mark-to-market basis to cover withdrawals. How are people going to withdraw money and not put it into another bank? This guy is just saying ridiculous shit for attention, there’s no way he’s this stupid. Again, his thesis is that bank withdrawals will cause banks to collapse and hyperinflation. It’s not possible for this to happen, there’s not enough physical cash to cause banks to collapse from withdrawals, and if you take money out of a bank in a non-cash form, where will you put it?
  - 4y ago

24 points by JVillella 4y ago

deleted 4y ago

[deleted]

How many bitcoins can I bet? Balaji is offering to sell a put on BTC with a $1M strike price (which is ITM by $974k) and the underlying is at ~$26k, 90 days to expiration. All you have to do to buy the put is put up 1 BTC ($26k) to potentially win $974k. I don’t think he thought this all the way through.

JVillella 4y ago
I think he is saying if it hyper inflates (they need to agree upon exact criteria) then he gets his 1M back + 1BTC. I don't think he is saying 1BTC > 1M USD.
- quickthrowman 4y ago
  Obviously he’d get his $1M back, why wouldn’t he? I never said he wouldn’t… He is selling a BTC put that expires in 90 days and is worth $800-900k for $26k, that’s all I said. Balaji is betting the hyperinflation makes the BTC worth more than $1M hyper inflated US dollars. If hyperinflation happens, the BTC/USD pair will go up in dollar value.
  - JVillella 4y ago
    That's not what I am saying. I am saying that BTC may be worth 100k, and the USD 500k and he still wins the bet (under the interpretation I mentioned above).
    - JVillella 4y ago
      Nevermind he just updated the thread. >Terms of the bet: ideally someone can set up a smart contract where BTC is worth >$1M in 90 days, then I win. If it's worth less than $1M in 90 days, then the counterparty gets the $1M in USD. https://twitter.com/balajis/status/1636827051419389952?s=20 https://twitter.com/balajis/status/1636827051419389952?s=20
      - deleted 4y ago
        [deleted]
sharemywin 4y ago
wonder if there's a way to pool funds like some kind of ethereum contract. I know ethereum won't talk to bitcoin, but maybe there's a way to do it?
- JVillella 4y ago
  There's something called WBTC[1]. It's very popular. [1]: https://wbtc.network https://wbtc.network
  - Laaas 4y ago
    EDIT: This comment is entirely wrong! Disregard. Do note this isn't _real_ wrapped bitcoin. It's essentially a stablecoin which price matches a bitcoin; it is not backed by any bitcoins unfortunately. Real wrapped BTC would require a decentralised bridge which isn't exactly trivial.
    - JVillella 4y ago
      Wrong :) Look at the website.
      - Laaas 4y ago
        FWIW it seems to be centralised, making use of a custodian, albeit it is backed by BTC as you say.
        JVillella 4y ago
        Yes, that's right. It's like USDC in that sense.
      - JeremyBanks 4y ago
        [dead]

gus_massa 4y ago

Hyperinflation is usually defined as an increase of 50% monthly (i.e. from 100% to 150%). x40 in 90 days is in increase of 240% monthly (i.e. from 100% to 340%). So it's a lot of inflation. This is not unheard, but it's very high and usually happens in countries with bigger problems. https://en.wikipedia.org/wiki/Hyperinflation#Notable_hyperinflationary_periods https://en.wikipedia.org/wiki/Hyperinflation#Notable_hyperin... [Hi from Argentina, our peak was in July 1989 with 196% (i.e. from 100% to 296%), but the peak was short, we didn't have three months with 200% of mensual inflation. See the graph in https://es.wikipedia.org/wiki/Hiperinflaci%C3%B3n_argentina_de_1989_y_1990 https://es.wikipedia.org/wiki/Hiperinflaci%C3%B3n_argentina_...]

JeremyBanks 4y ago

[dead]

mark242 4y ago

Just how out of touch is this guy? 50% inflation MoM within the next 90 days? Does he not understand the multiple system shocks that would need to take place for that to even come close to reality? Balaji, please - get out of your bubble. Go talk to your neighbors. They're all concerned about where to go for their kids spring break, the next episode of Mandalorian, and whether or not their bracket is still in contention. Let's game out what it would take for 50% inflation MoM -- you'd need severe supply issues up and down for every possible good, including goods created domestically. You'd need the Fed to fire up the printing presses in a way that surpasses even 2008, which, good luck on that one. You'd need interest rates to go negative. You'd need the real estate market to do a 180 from "nothing's really selling right now" to "people can't buy houses fast enough". You'd need a confluence of black swan events to happen globally in order to knock the dollar from being a reserve currency. How does that possibly happen? Just dumb, all around.

KRAKRISMOTT 4y ago
He will either lose his money or be known as the next George Soros (those who are old enough may remember that he once broke the British pound and several other minor currencies)
brwck 4y ago
[flagged]
quickthrowman 4y ago
I’m convinced he is trolling, he posted another tweet where he says this: > This isn't your typical fractional reserve situation. The problem is that there isn't enough in the banks on a mark-to-market basis to cover withdrawals. How are people going to withdraw money and not put it into another bank? This guy is just saying ridiculous shit for attention, there’s no way he’s this stupid. Again, his thesis is that bank withdrawals will cause banks to collapse and hyperinflation. It’s not possible for this to happen, there’s not enough physical cash to cause banks to collapse from withdrawals, and if you take money out of a bank in a non-cash form, where will you put it?
- 4y ago