Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Balaji’s Bitcoin bet was never just about the prices.
- Bitcoin to $1.2 million in 2029, according to our bold predictions (take it with a bucket of salt).
In March, Balaji Srinivasan, former Coinbase CTO and cryptocurrency advocate, said, placed a bet that Bitcoin [BTC] would reach $1 million by mid-June. When the bet was made, he insisted that the US economy would soon go into hyperinflation. He warned about this later in March hyperbitcoinization could arrive sooner than expected if the government continues to print currency and “lie about how much is in banks”.
Read Bitcoin [BTC] Price Forecast 2023-24
The bet was ruled out on 2 May by mutual agreement. Mr. Srinivasan made three $500,000 provable on-chain donations to Bitcoin Core Development, GiveDirectly, and Medlock, the person he placed the original bet with. But why did he burn his own money by making an impossible bet?
Burning personal money for a public cause
Balaji claimed the reason behind the bet was to force public debate by sending a “precious signal” that something is wrong with the economy. Balaji says we can’t rely on public figures to inform us when something is wrong, citing the actions of Janet Ellen and Ben Bernanke in 2008. The 2008 crisis was much bigger than Bernanke expected, as he only called a “small recession”. months before the crash.
This time around, Balaji is convinced we won’t get the “soft landing” that Federal Reserve Chairman Jerome Powell promised at the end of March. According to Balaji, the huge amounts of money injected by the US reserve led to rampant inflation, and the outcome will be much worse than what Powell claimed. He believes that the only safe haven is Bitcoin, and that he “burned a million to tell you they print trillions“.
Must be fun to be able to burn like a million bucks. Balaji says he did this for the public good and that citizens cannot rely on public figures to get the truth out. The rapidly depreciating dollar could cause investors to rush to Bitcoin, which could lead to hyperbitcoinization.
The Market capitalization of Bitcoin stands at $517.8 million at the time of writing. The amount of BTC in circulation was 19,385,012, with more being mined approximately every ten minutes. With a price of 1 million, BTC’s market cap would be $19.38 trillion, close to China’s GDP in 2022 ($18.1 trillion).
The cycles of rallies and retracements
Source: BTC/USD on TradingView
The chart above shows the bull rallies (white) in 2017 and 2021, and the bear market rallies (orange) in 2019 and 2023. The bull rallies were 2135% and 1688% respectively, although the second rally lasted much longer . Almost twice as long, as it took 430 days after prices stabilized around $10,000 for BTC to reach ATH at $69,000 on Coinbase.
From the highs of the bear market rally, BTC retreated to the 78.6% Fibonacci retracement level 280 days later during the Covid crash. If history were to repeat itself, we would expect BTC to fall to $18.8k in January 2024 before rising higher again.
Cautiously estimating, if the price were to rise another 1680% from $18.8k, it would reach $315,840 in about 400-450 days, which would mean June 2025. An 80% drop 380 days after that would take Bitcoin to $63,168 in July 2026.
Assuming the same pattern repeats, i.e. a 100% bear market rally within five months, BTC would trade at $126,000 in December 2026. Since we are only comparing the 2017 and 2021 cycles, let’s estimate that BTC is down another 78.6%. retracing the bear market rally over the next 280 days.
Mark the dates in your diary, buy BTC and go on a multi-year world tour
That would mean Bitcoin will hit $76.5k sometime in August or September 2027. Another 1680% rally after nearly 500 days would take BTC to $1.28 million in February 2029. This would be an insane journey for long-term BTC hodlers. Especially for people who have held on to BTC through thick and thin for over a decade.
Is your wallet green? Check the Bitcoin Profit Calculator
Of course, the above conjecture is just a guessing game, assuming BTC does something like the 2021 cycle over and over again. As we’ve already seen, the bull market rallies don’t extend that far north and the time to rally was longer in 2021 than in 2017. If this were the case for the next decade, it could take much longer before BTC reaches $1 million then another six paltry years. If Bitcoin ever reaches $1 million.
Balaji’s bet was ridiculous if we believe his only intention was a BTC price prediction like John McAfee’s years ago. However, he has clarified that he was giving his money away to shed light on something much bigger going on in the economic backdrop.
