Angel investor Balaji Srinivasan says the collapse of crypto exchange FTX should be treated as “a preview of state failure.” He warned that one day U.S. dollar bank accounts “may be frozen or inflated to worthlessness,” emphasizing that the authorities “will show no interest in prosecuting.” Srinivasan cautioned: “That world is coming and we need alternatives.”
Balaji Srinivasan on FTX, State Failure, and U.S. Dollars Becoming Worthless
Angel investor Balaji Srinivasan commented on the collapse of crypto exchange FTX in a series of tweets Saturday. Formerly the CTO of crypto exchange Coinbase and a general partner at venture capital firm Andreessen Horowitz (a16z), Srinivasan is also the author of The Network State, a WSJ bestseller.
“Treat FTX as a preview of state failure,” he wrote, adding:
One day, your USD bank account balance may be frozen or inflated to worthlessness. The authorities will show no interest in prosecuting — they’re the ones who ordered it in the first place. That world is coming and we need alternatives.
“It’s all just a dress rehearsal for the ultimate rug pull — when the state prints trillions, monetizes the debt, and ends the fiat century,” the angel investor explained in another tweet. “Our space will be prepared. We know what that looks like. And our trust-minimizing systems will be life rafts for the world.”
Many people on Twitter agreed with Srinivasan, stating that bitcoin and decentralization are the answer.
However, some disagreed, telling the entrepreneur that FTX is a fraud and a Ponzi scheme. “It’s not a preview of state failure. It has nothing to do with that. It’s simply fraud,” one wrote. “How can you equate a 32-year-old con man who had no controls, structure, systems, or board to the U.S. government?” another questioned. A third opined: “Comparing regulated banking industry to unregulated crypto exchange is misleading.”
Srinivasan also commented on bitcoin as a hedge against inflation in another tweet on Saturday. The angel investor detailed:
It’s a hedge against hyperinflation, monetary debasement, bank freezes, and wealth seizure. It’s already proven itself in that role, in places like Venezuela, Lebanon, Nigeria. For ‘standard’ inflation it may eventually have a gold-like role, but that takes decades to show.
Do you agree with Balaji Srinivasan about FTX and bitcoin? Let us know in the comments section below.
A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.
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