Bitcoin ‘Goes to Zero’ After a Hack, Chamath Palihapitiya Predicts
Billionaire investor Chamath Palihapitiya says Bitcoin (CRYPTO: BTC) has a ceiling on its value and believes a future hack could eventually send it to zero.
Why Palihapitiya Thinks Bitcoin Is Capped
Palihapitiya told the Moonshots podcast that traditional crypto lacks the fungibility needed to attract the full range of potential buyers.
Retail and institutional investors can hold it, he said, but central banks largely can’t.
He flagged two additional risks beyond that limited buyer pool:
- Privacy exposure: citing France, where forced publication of crypto holdings led to a wave of kidnappings
- AI-driven hacking: He argued that recursively self-improving AI models could eventually target Bitcoin’s SHA-256 security and potentially crack Satoshi Nakamoto’s wallet.
On that second risk, Palihapitiya noted an attacker could profit twice, first by draining the wallet, then by shorting Bitcoin after revealing the hack publicly.
“I just think it’s capped, and then I think eventually it gets hacked, and then it goes to zero,” he said, adding that migrating to quantum-resistant cryptography is “basically impossible” given how divided the Bitcoin community already is on basic coordination.
Palihapitiya also said he no longer holds Bitcoin directly. He moved his exposure into equity through Digital Currency Group years ago specifically to avoid storage and security risk.
Why He Still Sees Opportunity Elsewhere
Despite his Bitcoin call, Palihapitiya said he remains bullish on power and energy infrastructure as the defining investment theme of the next decade, pointing to roughly six gigawatts of capacity he has personally accumulated.
He argued that the U.S. faces a structural electricity shortfall even if developers complete every planned power project on time, making solar and natural gas the fastest and most practical options to close the gap.
He also pushed back on traditional index investing, arguing the S&P 500 (NYSE:SPY) no longer offers the diversification it once did because gains concentrate in a small handful of mega-cap names.
His alternative: rank companies across the S&P 500 and global indexes by free cash flow yield, then buy the top performers instead of the index itself.
On his own portfolio, Palihapitiya called himself the least invested he’s been in 15 years. “I’m in this schizophrenia about pivoting towards cash flow,” he admitted, pointing to uncertainty over how artificial general intelligence could reshape markets and asset values in the years ahead.
He said he still favors cash flow-generating businesses, power infrastructure, and alternative ways to deploy capital outside traditional financial systems.
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