By playing, you agree to uListen's Terms and Privacy Policy and YouTube's Terms of Service.
My First MillionBalaji's Prediction: Bitcoin Is Going From $26k To $1M in 90 Days (#434 Pt.1)
Summaries, chapters, transcripts, and FAQs on this page are made by uListen, not YouTube.
Great conversations run long. Their best ideas don't have to.
uListen is free on iPhone, iPad, Android, Chrome, and Claude.
See howCHAPTERS
Jump to publisher timestampsChapter summaries
Episode Preview: The Balaji Bet and a Two-Part Format
Shaan opens by describing Balaji's offer to put $1 million in escrow against one Bitcoin at 40-to-1 odds. He and Sam then preview the two-part structure: part one is the serious bet and banking discussion, part two covers Pomp's business empire.
- •Balaji's escrow offer is described as 40-to-1 odds with Bitcoin at about $26,000
- •Part one covers the bet and the banking system; part two covers Pomp's businesses
- •Sam notes the topic is time-sensitive because it concerns the next 90 days
- •Sam explains the 'gentleman's agreement' of subscribing on YouTube, Spotify and iTunes
Pomp on Content, Learning and Working Hard
The hosts greet Pomp and ask how it feels to be off his early-morning show. Pomp explains why creating content is a great way to learn, and how he thinks about work as gas and brakes with endurance.
- •Putting ideas online surfaces supporters, critics and new rabbit holes
- •Pomp tells the story of Jason Yanowitz and Mikey Pulido talking him into starting a podcast
- •Pomp's framework of gas and brakes in life
- •He says he has no hobbies and enjoys his work, so it doesn't feel hard
Who Pomp Is and Who Balaji Is
Shaan sets out Pomp's background in tech, crypto and media, then asks him to describe Balaji. Pomp explains Balaji's reputation for calling COVID and gives his own view of the 90-day Bitcoin prediction, including a 5% estimate.
- •Pomp's background: Facebook, Snapchat, a newsletter, a VC fund and a crypto jobs company
- •Balaji is known for early COVID predictions and the 'Balaji was right' meme
- •Pomp puts the chance of $1M Bitcoin in 90 days at roughly 5%
- •He calls the bet the best meme of 2023 and says Balaji is staking his reputation
Fearmongering, Persuasive Writing and Seeking Disagreement
Sam says Pomp's recent post genuinely scared him, and Pomp compares it to his March 2020 unemployment warning. They discuss arguing ferociously to find the truth and why disagreement from usually-agreeing friends matters most.
- •Sam was scared by the 'decades happen in weeks' line and the 'bodies floating' language
- •Pomp says his 2020 unemployment warning was followed by 6.6 million claims the next week
- •He argues the point is to get people to pay attention, not to profit
- •Pomp says to watch for volatility in agreement: weigh disagreement from frequent allies
Pomp's Explanation of How Silicon Valley Bank Failed
Pomp walks through the COVID liquidity crisis, the stimulus and zero rates, and how deposits flooded banks. He explains how SVB's long-dated bonds lost value as rates rose and how a bank run exposed the losses.
- •Lockdowns reduced the velocity of money and caused a liquidity crisis
- •Stimulus money ended up as bank deposits; SVB went from about $60B to $190B
- •SVB bought 10-year bonds yielding about 1.5%, which fell in value as rates rose to 4.5%
- •'Hold to maturity' accounting hid the losses until depositors withdrew $42B in 24 hours
Why Balaji Predicts Hyperinflation
Pomp says the problem extends beyond SVB, to Silvergate, Signature and Credit Suisse, and that reports suggest hundreds of banks are underwater. He lays out Balaji's argument that government backstops are inflationary and could trigger hyperinflation.
- •Governments are stepping in to backstop deposits to prevent cascading bank runs
- •Balaji's argument: trillions in backstops plus a psychological shift away from the dollar
- •Other countries already live with hyperinflation
- •The dollar's reserve-currency status adds global uncertainty
Shaan's Color on 333 Banks, Swap Lines and the Bit Signal
Shaan adds data on community banks below a safe ratio and describes the overnight swap lines. He then recounts Balaji's first 'bit signal' giveaway and how the Medlock tweet led to the bet.
- •Four community banks were below the threshold at year-end 2021 versus 333 now
- •Central bank swap lines were announced to supply dollars to foreign banks
- •Balaji's first bit signal offered $1,000 to the best thousand tweets
- •The bet began when James Medlock offered to bet that hyperinflation would not happen
Balaji's Reply to Shaan and Why He Says He Made the Bet
Shaan explains why the bet looked like a no-lose hedge for the counterparty, then shares Balaji's private reply. Balaji says all the banks are insolvent and that he is doing it to alert people, not to make money.
- •The counterparty could buy a second Bitcoin for about $52,000 to guarantee a payout
- •Balaji replied 'All the banks are insolvent' and invoked The Big Short
- •He compared the situation to FTX and said 'Uncle Sam Bankman-Fried'
- •He said he'd quietly buy Bitcoin if he were purely selfish, but is trying to alert people
Balaji's Credibility, the Exponential Pattern and FDIC Limits
After Sam jokes about a picture of Balaji presenting in pajamas, Pomp says Balaji's credibility comes from spotting exponential situations early, as with COVID. Pomp adds that deposited money is not really yours and the FDIC fund is far too small to cover every bank.
- •Balaji's current warning mirrors his COVID pattern of extrapolating from a few data points
- •Pomp says many Americans lack financial education about deposits
- •The FDIC has roughly $170 billion, with about 20% used on SVB, per Sam
- •SVB was described as about the 20th largest US bank
Digital Catastrophes and Shaan's Bank Run Experience
Pomp defines a 'digital catastrophe' as a real-world event sped up by online communication and action, using SVB as the example. Shaan describes watching it unfold on Twitter and pulling his money out within 15 minutes.
- •SVB went from announcement to failure in roughly 48 hours
- •Online speed replaces the old process of physically queuing at a bank
- •Shaan saw several sources discussing SVB and wired out his money in 15 minutes
- •Shaan argues blame belongs on whoever started the fire, not those who exited
The $2 Trillion Question, 'But Actually' Theorists and the Internet
Shaan asks whether the sudden $2 trillion balance sheet jump is real money creation. Pomp responds by criticizing people who impose theory on complex systems, then praises the internet for letting people challenge official narratives.
- •Some say the $2 trillion is just a borrowing facility, others say money printing
- •Pomp mocks the 'but actually' crowd, citing wrong 'transitory inflation' claims
- •The more complex the system, the less theory overlays on reality
- •The internet lets people hear both official and dissenting views instantly
Predictions for the Next 90 Days and Whether to Buy Bitcoin
Each guest gives a prediction. Shaan thinks Balaji is right on everything but the timeline and sees Bitcoin as a savings technology, while Pomp stays near 5%. They end with Balaji's possible hedge and Sam's response on his own holdings.
- •Shaan thinks Balaji looks wrong at 90 days but may be proven correct in 900
- •Shaan argues Bitcoin's core value is as a non-inflating savings technology
- •Pomp puts about 5% on 90 days because hyperinflation can arrive quickly
- •Shaan suggests Balaji could profit even if he loses given his Bitcoin holdings
- •Sam says he owns some Bitcoin plus equities and real estate; Shaan notes a rapid transition would be chaotic
