Bitcoin Will Save the Day in a Fiscal Collapse, Says Ex-Coinbase CTO
The former CTO of Coinbase, Balaji Srinivasan, believes that the U.S. government will seize citizens’ assets in the event of a fiscal collapse. However, he asserts that Bitcoin will be the savior when this happens. Srinivasan, who previously lost $1.5 million in a bet on Bitcoin’s price, is once again expressing concerns about the massive national debt and fiscal deficit in the United States. He warns that these issues could push the government to take extreme measures to remain solvent.
The Impending Seizure of Property by the Government: Balaji’s Perspective
In a recent post on Twitter titled “Bitcoin > Budgeting,” Srinivasan highlighted the inefficient fiscal spending in states like California and San Francisco. The excessive spending has now reached over $10 billion per year in San Francisco alone, setting the stage for a “financial reckoning.” He argues that as the situation worsens, everything will be consumed by a ravenous state, starting with inflation and ending in confiscation.
“En route to that, everything gets pulled into the black hole of a ravenous state. It starts with inflation and ends in confiscation… anything that can be seized will be consumed.”
Srinivasan cites examples of governments seizing private property, such as the U.S.-led freeze on $600 billion in Russia’s foreign reserves and Canada’s freeze on bank accounts of individuals connected to the 2022 Freedom Convoy protest. In response to these incidents, protesters turned to Bitcoin as an alternative means of fundraising. By leveraging its uncensorable and peer-to-peer nature, they were able to transfer over 14 BTC to truckers when other donation methods were blocked. Srinivasan argues that Bitcoin holders may be unaffected in a scenario where assets are seized, as long as they keep their private keys secure.
However, Srinivasan acknowledges that the government may resort to physically seizing assets by knocking on doors. In such cases, he believes that the “Bitcoin maximalism” movement will gain more followers. He concludes that budgeting alone cannot save us, and only Bitcoin has the potential to do so.
Balaji’s $1 Million Bitcoin Bet
Srinivasan previously made a bet that Bitcoin would reach a price of $1 million per coin following the banking crisis in March 2023. The crisis was accompanied by excessive spending from the Federal Reserve to bail out depositors. This event convinced Srinivasan that the U.S. government would resort to hyperinflation to rescue insolvent banks and citizens burdened by student and credit card debt.
Although Srinivasan prematurely forfeited his prediction, and it did not come close to reality, Bitcoin has recently reached a new all-time high above $72,000 per coin, almost a year after he placed his bet.
Hot Take: Bitcoin as the Savior
In the face of an impending fiscal collapse and potential asset seizures by the government, Balaji Srinivasan firmly believes that Bitcoin will save the day. He warns of inefficient fiscal spending and escalating national debt, which could lead to a dire financial situation. Srinivasan argues that governments have a history of confiscating private property and freezing assets. However, he asserts that Bitcoin holders may be able to protect their wealth due to its uncensorable and peer-to-peer nature.
If physical asset seizures were to occur, Srinivasan predicts that many individuals would turn to Bitcoin as a solution. He concludes that budgeting alone is insufficient in these circumstances and that Bitcoin is the only asset with the potential to provide true financial security.
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