Those who spend any amount of time following crypto will likely be familiar with one of the most atrocious bets in recent memory. One year ago, Balaji Srinivasan bet a couple of individuals on Twitter that bitcoin would reach $1 million in 90 days. He conceded in just 45.
Now, despite Srinivasan’s humiliating climbdown, a new bad bet has been placed, this time by Bitcoin maximalist and What Bitcoin Did podcast creator, Peter McCormack. The bet, which hasn’t yet been finalized due to the inability to find someone to escrow the money, is with Michael Green, the chief strategist for a company called Simplify.
Specifically, McCormack (who called the terms of the wager “pussy terms”) bet Green at 5-1 odds that bitcoin would hit at least $100,000 before the end of year. This means that if bitcoin doesn’t increase by 47% by midnight on December 31, McCormack will owe Green $100,000. Conversely, if bitcoin does hit the target, Green will have to fork over $20,000.
Bitcoin needs a $970K wick in the next 62 days for Balaji Srinivasan
Read more: New Balaji fund doesn’t mention hyperinflation or the ‘dying’ dollar
Unfortunately for McCormack, wagering on financial assets and their directionality isn’t the same as gambling at the horse track or sports betting online. Thanks to futures markets, options, and even newly crafted ETFs, the directionality of financial assets like bitcoin can be hedged, and with some pretty simple hedging Green can structure the bet so that he wins US dollars regardless of whether or not the currency ultimately hits $100,000 this year.
Ben Hunt, co-founder of Epsilon Theory, pointed out that it’s likely that Green actually hopes to lose the bet in order to gain more US dollars through a successful hedging strategy. While Green didn’t disclose his exact strategy, he did tell Protos, “this is simply an opportunity to highlight the bad math skills of the ‘it’s just math’ crowd,” adding that “getting to use Peter [McCormack]’s speculative gains to underwrite a much larger possible trade is icing on the cake.”
Meanwhile, McCormack has, through a series of tweets, stated that the bet is “for shits and giggles,” and that Green “doesn’t understand the point of the bet.”
It’s quite conceivable that bitcoin hits $100,000 before the end of the year, but when making personal bets regarding the price of financial assets, it might be best to not be drinking when so confidently agreeing to the terms.
The bet is not confirmed until an individual steps forward to provide escrow (the two gentlemen asked Balaji Srinivasan to do it for them and were apparently denied).
