Bitcoin bulls push back after Chamath names ‘two problems’ for crypto

At the start of the week, Chamath Palihapitiya, the Social Capital CEO, stated that Bitcoin faced two major problems. One of the problems highlighted was where speculators are putting their money, and the other was where miners are pointing their power.

However, Palihapitiya’s claims have seen considerable pushback from Bitcoin bulls within hours after his posts, and most of them disagree that either of the highlighted problems is permanent.

What did Chamath say?

In a post on X on Sunday, Palihapitiya laid out two headwinds he sees, writing, “There are two problems rn for crypto and, specifically, Bitcoin bulls.” 

The first problem, according to him, is that the next marginal dollar of speculative money would rather chase prediction markets and equities than buy Bitcoin. 

For the second problem, he stated, “Marginal energy to mine BTC is worth 10-20x if reallocated to serving AI tokens.” He also added that both shifts could be structural, while noting that he could be wrong.

Who are the ones pushing back on Palihapitiya’s predictions?

Coinbase CEO Brian Armstrong did not fully agree with Palihapitiya’s submissions. He sees the first problem as temporary and sees the second as more durable; however, he disputes the logic that ties mining energy to price. 

He 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).”

Armstrong added that in the “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.”

Jack Mallers, the CEO and founder of American Bitcoin payments company Strike, took a harder line. He stated that he had issues with Palihapitiya’s position, stating that money rotating into prediction markets, memecoins or AI was never loyal Bitcoin demand to begin with; he argued that losing it changes little. 

According to Mallers, Bitcoin wins by replacing savings and becoming money, not by out-competing the latest speculative venue.

Matt Hougan split the difference. He conceded the first point is true and said it helps explain why Bitcoin’s volatility has fallen and why the next bull run is likely to be a slower grind. The second problem, he wrote, is largely self-correcting and not a near-term worry.

David Hernandez rejected the framing outright, calling the two problems cyclical rather than structural. Speculative liquidity, he noted, is always portable to whatever the next opportunity happens to be. James Van Straten pointed out that miners moving rigs and power toward AI is not a new development, having begun roughly two years ago.

The backdrop

The miner argument is not hypothetical. Bitcoin mining has turned into a loss-making business at the margin. A CoinShares study cited by Cryptopolitan put the average cost to mine a single coin at about $79,995 for public miners in the last quarter of 2025, a stretch when Bitcoin traded near $68,000 to $70,000. 

That left miners losing roughly $19,000 on every coin. In response, the industry has signed more than $70 billion in AI and computing contracts, and firms like Bitfarms have started selling their Bitcoin and rebranding around high-performance computing.

The liquidity argument has its own supporting data. Prediction markets posted a record $28.4 billion in monthly trading volume in May, according to Artemis figures reported by Cryptopolitan, with Kalshi handling $17.3 billion of that and Polymarket $8.4 billion. 

The sector has now logged higher volumes for four straight months, a sign that the speculative money Palihapitiya described has somewhere active to go.