Betting. 🎲

It’s why my Aunt Tracy left my Uncle Mark. Well, not betting exactly, it was closer to what Tracy called a, “degenerate gambling addiction.”

But whether it’s the ponies, a coin flip, or betting Uncle Mark’s house on roulette, not all bets are created equal.

In fact, some bets are worth untold fortunes and could determine the future of crypto. But more on that later.

Espresso Shots

☕️ Paxful Suspends Operations ❌ 🖨️

As of Tuesday, peer-to-peer Bitcoin trading platform Paxful, has suspended operations.

CEO Ray Youseff started off cryptic in his explanation of the shut down, citing staff issues. “While I cannot share the full story now, I can say that we unfortunately have had some key staff departures.”

After some more prodding, the truth came out. Paxful is in the midst of a lawsuit between Youseff and co-founder, Artur Schaback, to the point that Youseff felt, “I couldn’t guarantee the security of this platform… This is why this thing has to go down.”

In addition to the ongoing lawsuit, Youseff and Paxful, like many in the crypto space, were suffering under the ire of American regulators.

“We’ve been bending over backwards for the past five years to try to comply with the highest standards,” said Youseff. “The regulators still don’t get it and it’s painful to see.”

The platform’s future is still unclear, but for the moment Paxful seems Pax-empty.

☕️ Crypto Scams on the Rise 🚨 📈

That’s right, there are more crypto scams, attacks, and hacks than ever. And we don’t mean that it feels that way, we mean literally, statistically.

The amount of cyber attacks in the crypto industry has gone a shocking 192% in Q1 of 2023.

Though as a bit of a silver lining, the actual amount of money lost in these attacks is actually down 64.4% historically. The crypto gods giveth and they taketh away. 

This study was conducted by the security software company, Immunifi, who posit that the increase in thefts is a result of a digital arms race between hackers and cybersecurity.

“Projects have increased their security measures through audits and bug bounties in the past year, but blackhats (hackers) have kept pace,” said a spokesperson from Immunefi.

But the greatest threats will emerge once robot hackers can finally figure out which of these squares contain stoplights.

☕️ Euler Hacker Returns Funds 😭 💰

Euler Finance, a crypto trading platform, suffered from a $200 million attack, but in a wild Robin-Hood-like turn of events, the funds have all been returned by the hacker.

Euler had put out a $1 million bounty for information leading to the hacker, but rescinded their offer as, “following successful negotiations, all of the recoverable funds taken from the Euler protocol on March 13 have now been successfully returned by the exploiter.”

And it would seem that the hacker, who goes by the alias, “Jacob,” didn’t take any reward or incentive for returning the stolen money. Also: what kind of alias is Jacob...?

It seems that Jacob, like a digital Edgar Allen Poe story, was motivated by his maddening guilt. Here's a quote in which Jacob apologizes profusely (and profanely.)

“Jacob here. I don’t think what I say will help me in any way but I still want to say it. I fucked up,” reads one of the direct messages sent to Euler from the hacker.

“I didn’t want to, but I messed with others’ money, others’ jobs, others’ lives. I really fucked up. I’m sorry. I didn’t mean all that. I really didn’t fucking mean all that. Forgive me.”

Wow. If this is the remorse he feels for a cyber crime, we can be pretty certain that actual, physical crime would be much too spicy for Jacob.

Spilling the Beans

The Million Dollar Bitcoin Bet 😳

Balaji Srinivasan made headlines when he wagered that Bitcoin would hit $1 million within the next 90 days. 

We and everyone else in crypto wrote about the bet, taking Balaji's bait. It's an exciting story! But even more than that, it's a terrifying prediction. We'll explain.

Balaji's bet is astounding for a couple of reasons. The first of which is, of course, his profound belief that Bitcoin will imminently hit $1 Million USD. 

On that front: we're all aboard, Bitcoin to the moon! 🚀 

But there's a very dark undertone to Balaji's prediction. And that's why he believes Bitcoin is going to $1 Million... 

It's because he's lost faith in the US Dollar entirely.

Balaji is far from the first person to predict Bitcoin is going to $1 Million. But most of these predictions are 10 years out. Or at least five. Balaji's is 90 days. 

If Srinivasan’s timeline is to be believed, Bitcoin will hit the million dollar mark by June 17th.

That’s June 17th of this year.

So... how seriously should we be taking Balaji's bet? Well... that's up to you. But he's certainly not some random shmoe on Twitter. 

Balaji is a wickedly smart founder and entrepreneur. Not only does he have more degrees that the entire Coffee & Crypto team combined, he's also made a lot of money. 

Srinivasan had a series of successful companies, a stint at venture capital giant Andreessen Horowitz, and served as the first Chief Technology Officer of Coinbase. 

So why is he so convinced Bitcoin is about to skyrocket? Simply put: because the dollar is faltering.

If you're wondering how those things are related, here's how it works:

Balaji views Bitcoin as an inflation hedge. An inflation hedge is an investment intended to protect an investor from decreases in the purchasing power of their native currency.

Some classic inflation hedges would be gold or precious minerals. Recently however, digital currency has grown as a popular way to lessen fiat dependency.

Now, Balaji Srinivasan’s prediction about BTC hitting the million mark this summer isn’t actually a position of unbridled optimism, so much as a darkly pessimistic assessment of the dollar.

Simply put: Balaji is betting that the US dollar is about to become so worthless that a million dollars isn't an outrageous price to pay for Bitcoin.

This massive and rapid devaluing of the US dollar could happen through hyperinflation. We explain what that is and how it occurs in the Crypto 101 section.

In Balaji's timeline, the circumstances that would give rise to Bitcoin hitting $1 million wouldn’t be a crypto utopia, so much as a financial hellscape.

We’re talking soot-faced workers, bread lines, and Charlie Chaplin getting sucked up into gears. You know the drill. 

We obviously believe the eventual mass adoption of Bitcoin is something worth dreaming about. But if it happens this way: there will be far bigger issues on all of our minds. 

What makes Bitcoin so exciting is that it’s both a tool and a movement, it's backed by a belief in economic freedom and decentralization.

What makes Bitcoin special as an idea is also what makes it powerful in times of instability.

Bitcoin doesn't rely on any given government or fiat currency. So if you do believe Balaji has a point about the stability of the US financial system: his bet makes some sense.

Will the US financial system collapse in 90 days...? Probably not.

Will Bitcoin hit $1 Million in 90 days...? Also, probably not. 

But is there validity to the idea that Bitcoin can serve as a inflationary hedge in a time when the US dollar looks weaker than it has in years? Absolutely. 

Ultimately, this may just be a very well executed PR stunt. But if Balaji's prediction does prove true this summer... that's nothing short of a major global crisis.

That kind of widespread Bitcoin adoption could only be the product of the collapse of… every western country's economy.

So, Srinivasan’s gamble has put us into a unique position.

We would like Bitcoin to hit $1 million. That’s a dream. But if it happens this summer, that’s a nightmare.

Meme of the Day

We wouldn't push the button. We're pretty sure.

Crypto 101

Hyperinflation: Hyperinflation is an incredibly accelerated state of inflation. It's usually marked by 50% price increases over the course of a single month, but in terrible situations, it can happen over the course of days or hours. 

Hyperinflation usually occurs when a populace loses all faith and trust in their government's currency. If a loaf of bread starts costing $50 to $100 dollars... we're in hyperinflation. 

In times like these, citizens tend to switch to a different currency as there's has become useless. This is the state of the dollar that Balaji fears in his prediction. 

The Last Sip

The Last Sip: Here are three of Balaji Srinivasan’s lesser known predictions for 2023:

• The oceans will rise and crabs will challenge mankind for their spot as the planet’s dominant species.

• The Expendables 4 will redefine modern cinema.

• August will be hot.

Stay Caffeinated,

Coffee & Crypto Team

That's all for today! If this email got you hooked on our unhinged crypto takes, be sure to get a full dose on Twitter @GetCoffeeCrypto.

If you find yourself smiling at any of our dumb jokes, or even *learning* something - make sure to share this newsletter with your friends!

If you get 10 friends to sign up - or even enemies, we don't care - we'll send you a swag box with some epic Coffee & Crypto merch! Just hit the Click to Share button in the section below to get started!

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.