An American VC, Balaji Srinivasan, a former CTO of Coinbase, has bet $2 million worth of USDC on the price of Bitcoin reaching $1 million by the end of June.
While many have tagged Srinivasan's actions as hasty and poorly thought-out, his bet only goes to show his dedication and faith in Bitcoin. But why exactly did he place this rather big bet?
In a tweet last week, the VC shared transaction evidence that showed that he had indeed deposited $2 million in USDC to a special wallet address labelled "Balaji's bet," shortly after the widely publicized bet was announced.
Along with the transaction evidence of his transfers, Srinivasan also added that the bet is set up as a public-interest bet, where it remains clear that there is a "zero profit motive"
In essence, this VC is saying that there are no loopholes through which he somehow wins, even if he loses the bet.
According to on-chain data, a special Ethereum address labelled "Balaji's Bet" was activated specifically for the bet.
In detail, this address received six transfers totalling $2,000,725 from a Coinbase wallet, a little more than a day after Balaji placed a wager last week on Saturday.
According to the businessman, the wager would be conducted as a public interest wager in the Simon-Ehrlich tradition, in which neither participant of the wager has any financial incentive to win or lose
For context, a Simon-Erlich bet was a 1980 wager between two U.K. scientists about the price dynamics of raw materials.
This kind of bet is a wager made between two parties, typically about specific or economic issues that have significant public interest.
The bet usually aims to raise awareness of the subject (bitcoin in this case), encourage discussion, and hold both parties involved in the bet responsible for their predictions, whether right or wrong.
In essence, Balaji may know that a $1 million Bitcoin may be a bit of an overreach, but has mentioned that it is "purely about settling an ideological matter."
Instead of wanting to make a quick buck with the less-than-likely outcome of the bet, he is only interested in alerting "innocent Americans and dollar holders" that the "printing" (or the possible collapse of the dollar) is coming.
Overall, it might be interesting to watch what happens in June when the bet expires and both parties get what they wagered on.
Bitcoin's realized price is an interesting metric. It is the value of all bitcoins at the price they were bought, divided by the number of bitcoins in circulation.
In all, the realized price for Bitcoin's short-term holders is currently +$1,000 lower than the overall realized price.
This is a good sign because historically, the realized price for short-term holders (currently $21,095) going above the realized price (currently $19,960) has always signalled the end of a bear market.
According to a tweet from Ali, a famous crypto analyst on Twitter, however, the "biggest support wall" for Bitcoin is between the $27,170 and $27,940 zone where about 1.45 million addresses purchased more than 700,000 $BTC.
Ali went further to note that If this demand wall holds, bitcoin faces little to no resistance to advance further.
According to data from CoinMarketCap, Bitcoin has lost most of the steam that powered it from $20,000 straight to the $29,000 zone.
The flagship cryptocurrency has declined briefly to the $27,900 zone and is down by 1% over the last seven days as it struggles to get back on its feet.
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