Key Takeaways
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Chamath Palihapitiya predicts Bitcoin will eventually be hacked, questioning its ability to coordinate security upgrades.
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Standard Chartered has signed agreements to acquire Zodia Custody, expanding its institutional crypto business.
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Palihapitiya retains indirect crypto exposure through Digital Currency Group despite no longer holding tokens directly.
Chamath Palihapitiya says Bitcoin will eventually be hacked and become worthless, delivering a stark warning as Standard Chartered moves to bring more crypto custody operations into its banking business.
Chamath Predicts Bitcoin Will Eventually Be Hacked
Speaking on the Moonshots podcast, the investor argued that advances in AI could threaten crypto security — and that Bitcoin's divided community could struggle to agree on a response.
Asked whether Bitcoin was "cooked," Palihapitiya offered an unequivocally bearish assessment.
"I just think it's capped and then I think eventually it gets hacked and then it goes to zero."
He argued that increasingly capable AI systems could be directed toward breaking cryptographic protections.
Palihapitiya described a hypothetical attacker targeting Bitcoin attributed to its anonymous creator, Satoshi Nakamoto, stealing the coins and then profiting again by betting against the market before revealing the attack.
"Then you'd make the money twice," he said.
Palihapitiya also argued that crypto faces limits on its potential pool of buyers and that disclosures of investors' holdings can pose personal security risks.
Together, he said, those concerns place an "upper bound" on the sector.
Bitcoin's Biggest Obstacle Could Be Agreeing on a Fix
Palihapitiya said crypto networks need to migrate toward security mechanisms designed to withstand quantum computing attacks .
"It's incumbent on these efforts to migrate to quantum-secure, quantum-resistant cryptographic mechanisms," he said.
However, he questioned whether Bitcoin's community could agree on how to introduce those protections, describing such coordination as "basically impossible."
"It's a bunch of people that can't even agree, you know, where to meet, let alone … what time the meeting starts at."
For Palihapitiya, the challenge extends beyond developing stronger technology.
His concern is whether a decentralized network can organize a response before its existing protections become vulnerable.
"I think crypto is a bit lost in the woods here," he said.
Chamath Still Has Indirect Crypto Exposure
Despite his warning, Palihapitiya said he retains exposure through Digital Currency Group.
He explained that he had previously contributed a long-term Bitcoin investment to DCG in exchange for equity.
"That was much better for me because then I alleviated myself of the storage risk and the security risk and I had equity."
He added:
"That's my mechanism to have exposure to crypto. I don't own crypto directly anymore."
Standard Chartered Expands Institutional Crypto Custody
Like Palihapitiya's indirect exposure through DCG, Standard Chartered's latest expansion centers on the businesses behind crypto.
Under the proposed transaction, the bank would acquire full ownership of Zodia Custody and integrate its regulated custody operations into its Securities Services business.
Zodia's software and professional services activities would move into a separate business, Zodia Solutions, under SC Ventures.
Richard Clark, Zodia Custody's chief executive, said:
"As institutional adoption of digital assets accelerates, custody is increasingly becoming part of the global banking landscape."
The acquisition covers a parent company with regulated operating entities in Singapore, Hong Kong, Australia, the United Arab Emirates and Luxembourg.
Standard Chartered said the combination would support its ambition to offer institutional clients traditional securities services alongside digital asset custody.
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