Bitcoin bulls have challenged Chamath Palihapitiya’s claim that crypto faces structural pressure from shifting speculation and miners redirecting energy toward artificial intelligence computing.
The Social Capital chief executive posted on X on Sunday, writing, “There are two problems rn for crypto and, specifically, Bitcoin bulls.”
Palihapitiya said the next marginal dollar of speculative capital would rather enter prediction markets and equities than Bitcoin. He described the second concern by stating, “Marginal energy to mine BTC is worth 10-20x if reallocated to serving AI tokens.” He said both changes could be structural, while acknowledging that he could be wrong.
Bitcoin Bulls Challenge Mining Argument
Coinbase chief executive Brian Armstrong partly disagreed. He considered the first issue temporary and the second more durable, but rejected any direct link between mining energy and Bitcoin’s market price.
Armstrong wrote, “hash power or energy going to Bitcoin mining doesn’t determine its price (the network difficulty adjusts if miners go offline to keep the same pace of block mining).”
He added, “long term, Bitcoin price is mostly a measure of how much people fear inflation, and there seems to be no end in sight to democracies everywhere running deficits.”
Strike founder and chief executive Jack Mallers rejected Palihapitiya’s position more firmly. He argued that capital moving into prediction markets, memecoins, or AI was never loyal Bitcoin demand. Mallers said Bitcoin succeeds by replacing savings and becoming money, not by competing with each new speculative venue.
Analysts Debate Structural Headwinds
Bitwise chief investment officer Matt Hougan accepted Palihapitiya’s first point. He said competition for speculative funds helps explain Bitcoin’s lower volatility and why another bull run may develop through a slower grind. Hougan viewed the mining concern as largely self-correcting and not an immediate risk.
David Hernandez dismissed the structural framing and described both problems as cyclical. He noted that speculative liquidity regularly moves toward emerging opportunities. James Van Straten said miners began redirecting rigs and power toward AI roughly two years ago, showing the trend was not new.
Mining Losses and Prediction Volumes Rise
Mining economics support the energy concerns. A CoinShares study cited by Cryptopolitan estimated that public miners spent about $79,995 to produce one Bitcoin during the final quarter of 2025. Bitcoin traded near $68,000 to $70,000 during that period.
The difference left miners losing roughly $19,000 per coin. The industry has signed more than $70 billion in AI and computing contracts. Bitfarms has started selling Bitcoin and repositioning around high-performance computing.
Prediction markets have also posted record activity. Artemis data reported by Cryptopolitan showed monthly trading volume reached $28.4 billion in May. Kalshi handled $17.3 billion, while Polymarket recorded $8.4 billion. The sector has now registered higher volumes for four consecutive months overall.
