Crypto Business: Inflation Surge and Bitcoin Bets, AI Taking Over Initial Employment Roles, and Additional Insights

Concerns regarding inflation in the United States and its potential impact on Bitcoin (BTC) prices are among the primary issues for investors globally. For example, a notable figure in the crypto space made a significant wager on the future of the U.S. economy: the former Coinbase executive recently disbursed $1.5 million to resolve a Twitter bet concerning the likelihood of hyperinflation in the American economy.

While the U.S. is not currently facing hyperinflation, the Federal Reserve appears to be worried about the possibility of prices spiraling out of control. On May 3, the Fed increased interest rates by a quarter-point to the highest level in 16 years, adjusting the target range for its benchmark from 5% to 5.25%.

Despite ongoing inflationary pressures, many still regard Bitcoin as a refuge, with crypto companies considering the digital asset as a means to combat inflation and instability in traditional finance.

This week’s Crypto Biz delves into the latest significant bet on Bitcoin prices, concerns over inflation, and the jobs that artificial intelligence may soon take over.

Balaji settles his $1 million Bitcoin wager, 97% below target

A highly publicized bet between former Coinbase chief technology officer Balaji Srinivasan and anonymous Twitter user James Medlock has concluded, with Srinivasan paying $1.5 million to settle the wager. The bet began on March 17 when Medlock proposed a $1 million wager that the United States would not face hyperinflation. Shortly thereafter, the former Coinbase executive accepted the challenge, asserting that an imminent crisis would lead to the devaluation of the U.S. dollar and consequently a hyperinflation scenario, driving the BTC price to $1 million. As part of the agreement, Srinivasan paid Medlock $500,000, contributed $500,000 to Bitcoin core developers, and donated another $500,000 to the nonprofit organization, Give Directly.

I just burned a million to tell you they’re printing trillions. pic.twitter.com/pX5622rjUO

— Balaji (@balajis) May 2, 2023

MicroStrategy’s Bitcoin commitment remains ‘strong’ as it reports Q1 profit

The Bitcoin investment approach at business intelligence firm MicroStrategy is as robust as ever following the company’s first quarterly profit since 2020. The firm returned to profitability with a $94 million gain, largely due to a one-time income tax benefit of $453.2 million. Additionally, the company reduced its leverage by repaying a $161 million Bitcoin-backed loan from the now-defunct Silverage Bank. The quarterly results were also influenced by a 2.2% increase in revenue from the previous year, totaling $121.9 million. MicroStrategy’s CEO Phong Lee stated that the firm would persist in its dual strategy of expanding business intelligence software and acquiring Bitcoin, believing that its Bitcoin thesis is a “pretty good way to outperform the market.”

Since @MicroStrategy adopted a #Bitcoin Strategy: pic.twitter.com/rrYTbvOkUS

— Michael Saylor⚡️ (@saylor) May 1, 2023

Coinbase stock will be ‘burdened’ until U.S. regulations are clarified: Citi

According to Citi analysts, Coinbase’s stock price will remain “burdened” until regulators define the legal “rules of the road” in the United States. The bank downgraded the shares of the crypto exchange from “buy” to “neutral” and reduced its price target, citing “too many unknowns” as the company navigates its challenges with regulators. However, negative sentiment surrounding Coinbase’s stock has not deterred investment firm ARK Invest from increasing its stake in the crypto exchange. ARK acquired 168,869 Coinbase shares for its exchange-traded funds on May 1, valued at nearly $8.5 million. In April, ARK purchased 304,300 shares worth $17.5 million. Earlier, the firm acquired 2.4 million shares in March for approximately $117 million.

Citi’s analysis was released prior to Coinbase’s Q1 earnings report published on May 4.

7,800 jobs at IBM may be replaced by AI in the coming years, CEO indicates

IBM is planning to implement a “pause” on hiring for “back-office” roles that could potentially be automated by artificial intelligence. According to CEO Arvind Krishna, back-office positions, such as those in human resources and accounting, are likely to be the first to be automated by AI. Krishna stated in an interview that nearly 30% of these roles could be “easily” replaced by AI over the next five years. IBM has a global workforce of 282,000 employees, as per LinkedIn data, with nearly 26,000 in non-customer-facing positions.

Dropbox: Laying off 500 people and replacing them with AI
IBM: Pausing hiring for ~7,800 roles that could be done by AI
AI is already replacing jobs

— Genevieve Roch-Decter, CFA (@GRDecter) May 1, 2023

Before you go: The average person’s wealth will be ‘entirely eroded by inflation,’ says Arthur Hayes

Arthur Hayes, co-founder and former CEO of crypto derivatives exchange BitMEX, asserts that most individuals will see their wealth gradually diminished by the devaluation of currency. He believes that the world’s major economies will be compelled to inflate away the substantial public debt accumulated in recent years through monetary expansion. With long-term inflation anticipated, Hayes’s investment strategy emphasizes wealth preservation through investment in digital assets. You can view his exclusive interview with Cointelegraph on our YouTube channel.

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