Balaji’s famous million-dollar Bitcoin bet may not be realistic: Analyst
- Crypto influencer Nic Carter believes that the actions of federal regulators regarding crypto banks may be in a grey area.
- Carter has stated that Balaji’s famous million-dollar Bitcoin bet may not be a realistic projection of BTC’s price.
Coinmetrics co-founder Nic Carter recently appeared in a podcast hosted by Dan Romero and Erik Torenberg. Carter, who also serves as a partner at Castle Island Ventures, shared his thoughts on the recent developments in the crypto and banking industry.
The banking relationship between Coinbase and Silicon Valley Bank
During the podcast, Dan Romero revealed that Coinbase’s relationship with Silicon Valley Bank, which was liquidated earlier this month, dated back to 2013.
When Nic Carter inquired about the relationship, Romero noted that the partnership ended in 2015 when SVB expressed its intention to limit exposure to crypto-related firms.
Interestingly, the bank continued to cater to stablecoin firm Circle Internet Financial, which issues USD Coin.
Speaking on the crypto banking crisis, Romero revealed that most traditional banks avoid doing business with crypto entities due to the lack of control over finances.
For instance, an Automated clearing house (ACH) transaction can be reversed by banks within 30 days, provided that the payment was in fiat.
However, banks are starting to lose control over their ability to claw back, since crypto clients convert the funds and store them on the blockchain.
Nic Carter added that the federal government was creating barriers for state-level banks that sought to cater to crypto entities.
He also indicated that such actions by federal regulators may be overstepping the bounds of the law.
When asked about how much crypto offered unique use cases that were different from TradFi’s offerings, Carter stated that some elements of crypto are fairly new, including flash loans.
Speaking on the famous million-dollar Bitcoin bet made by former Coinbase executive Balaji Srinivasan, Carter stated that the bet may be more about positioning himself as an important figure in the crypto space rather than projecting a realistic valuation for the flagship cryptocurrency.