Ex-Coinbase Chief Technical Officer and Angel Investor Balaji Srinivasan said that Bitcoin would reach $1 million in 3 months amid a banking failure in the US. He said this in an interview hosted by the Ark Invest CEO, Cathie Wood. Known celebrities and businessmen, including Elon Musk and Twitter’s Founder Jack Dorsey, have been some notable guests on the show.
The Banking Collapse, as per Srinivasan
Balaji Srinivasan predicts that banking failure is imminent, which started with Silvergate Capital, Silicon Valley Bank, and several similar banks, and would result in a widespread collapse similar to 2008. The reason for such failure is the de-dollarization of the world economy.
Several countries are preparing currency swaps with their trading partners to get rid of the US Dollar for international trade. This could lead to the devaluation of the US Dollar, which would send further shockwaves to the banking system in the USA.
Currently, all the US Commercial Banks are working on zero reserves, which means that they can lend 100% of their deposits. If the dollar devalues, this would create an imminent asset-liability misbalance in their balance sheets. Ultimately, this could lead to several banks filing for bankruptcy.
Balaji voices a strong opinion saying that several banks are already bankrupt.
Also, to support the theory of de-dollarization, he shows how banks bought record gold in 2022.
Impact on BTC
Bitcoin has been touted several times as being a perfect reserve asset. If the devaluation of the banks occurs, they would need a reserve asset to preserve their value. Balaji expects cryptocurrencies to be their choice, particularly Bitcoin.
Further, the loss of value will make people run for their dollars in the banks. Cryptocurrency has already been touted several times as a flight of safety for investors.
Srinivasan Says Bitcoin Might Reach $1 Million in the Next 3 Months
If a bank run happens with the dollar devaluation in international money markets, as per Balaji Srinivasan, then there would be a huge flight to other assets and commodities that can be bought electronically and stored while the dust settles.
Cryptocurrencies make one of the perfect choices for such assets. They can be bought easily, can be easily moved, and can be sold easily. Further, these transactions remain anonymous. Despite several regulatory actions, the Bitcoin ecosystem continues to grow.
BTC could act as a safe instrument for several people to park their money. If this happens, it would send the Bitcoin prices in an unending upward spiral that could easily cross $100k, if not $ 1 million. However, corporate buying of BTC could be the factor that could send the cryptocurrency towards $1 million. Several companies have been buying Bitcoin, including Microstrategy.
Finally, here is the full video.