Chamath Palihapitiya says Bitcoin is capped and could be hacked

Chamath Palihapitiya, who founded and runs Social Capital, said Bitcoin has a ceiling and could eventually be hacked. He said so on the podcast Moonshots, in an episode posted Wednesday.

This matters to anyone who owns Bitcoin or is thinking about it. It also bears on how safe digital money stays as AI improves.

Palihapitiya gave several reasons. He said the pool of buyers is retail investors, then big institutions, then central banks. Everyday coins don't suit central banks, so growth stalls. He also said leaks about who owns what create danger, and he pointed to France. In his telling, the government there forced publication of crypto owners, and kidnappings followed.

His third reason is AI. Suppose AI helping to build better AI gets aimed at cryptography. He said it could break into the wallet of Bitcoin's creator and drain it. Then someone could bet against Bitcoin. Then he put his view in plain words.

"eventually it gets hacked and then it goes to zero."

Benzinga on MSN reported Thursday under the headline "Bitcoin goes to zero after a hack, Chamath Palihapitiya predicts." The story says he believes Bitcoin has a ceiling on its value and that a future hack could send it to zero.

Palihapitiya said he no longer owns crypto directly. He holds stock in Digital Currency Group, which he got in return for his Bitcoin, and he said that removed the storage and security risk. He also thinks the Bitcoin community will struggle to move to stronger codes. He didn't say when a hack might happen.

Watch the 3 minutes where he explains why.1:47:02