On Friday, tech Twitter guy Balaji Srinivasan entered into a Twitter bet in which he bet $1 million against 1 Bitcoin that Bitcoin would be worth more than $1 million in 90 days. Noah Smith explains the bet here. If a Bitcoin is worth more than $1 million, Srinivasan wins one Bitcoin, which in this scenario is worth $1 million. If a Bitcoin is worth less than $1 million, Srinivasan loses $1 million, which in this scenario is worth, you know, (1) $1 million and (2) more than a Bitcoin. In every scenario, Srinivasan is strictly much worse off than if he had just bought 35 Bitcoins today.
What? There are three possible explanations here:
–He is kidding and not actually going to do this.
–He is deeply confused about how money works.
–He does know that this trade is economically irrational, but he is doing it to draw attention to himself and to Bitcoin, and to get other people to buy Bitcoin as a hedge to the societal collapse that he is promising, because he already owns a lot of Bitcoin and would like the price of Bitcoin to go up.
Source: Sadly, Bitcoin – Bloomberg
