Bitcoin’s slide to $63,000 coincides with a venture rotation into AI infrastructure
CZ insists capital hasn't left crypto as bitcoin trades near half its October peak, while Chamath Palihapitiya bets billions on data-centre land and power.
Bitcoin was changing hands near $63,037 at the weekend, roughly 45 per cent below its level a year earlier and about half its all-time high set on 6 October. Binance founder Changpeng Zhao, known widely as CZ, has argued that the slump does not reflect a shortage of capital in crypto markets, but rather investors holding back while they weigh where returns are best. That claim is now being tested by a parallel and increasingly visible trend: some of the same capital that once chased digital assets is being redirected into physical AI infrastructure.
A liquidity thesis meets a rival asset class
CZ’s position is that liquidity has not left the system so much as it has become more selective, with money sitting on the sidelines rather than flowing back into bitcoin and other tokens. Venture capitalist Chamath Palihapitiya, founder of Social Capital, offers a concrete illustration of where some of that patience may be going. He has told investors his own focus has shifted away from AI chip startups toward what he calls “LPS” — land, power and shell — buying land, securing electricity connections and acquiring buildings that can be converted into data centres.
Palihapitiya’s rationale is that suitable sites with reliable grid access are becoming scarce, making land and power assets a faster and more reliable route to cash returns than semiconductor development. He and his partner Anita Vlallian have reportedly secured close to six gigawatts of power capacity through 2029, a figure that underlines the scale of capital now flowing into physical AI build-out rather than crypto markets.
Regulatory friction slows the data-centre build-out
That strategy is running into growing political resistance across the United States. According to Data Center Watch, at least 75 US data centre projects worth roughly $130 billion were blocked or delayed in early 2026, with community opposition now recorded across 49 states. Lawmakers introduced more than 300 state-level data centre bills within a six-week span, and Maine narrowly avoided becoming the first state to ban new data centres outright after a proposal failed by a single vote in its House of Representatives.
The friction has not stopped major deals from being struck. Bitcoin miner-turned-AI infrastructure firm TeraWulf has agreed to lease a 401-megawatt site in Kentucky to Anthropic under a 20-year contract expected to generate roughly $19 billion in revenue, a deal analysts have cited as a benchmark for how quickly former crypto-mining operators are repositioning around AI demand.
Chip bets give way to physical assets
Palihapitiya’s pivot away from chip development is notable given his own history in the sector: he helped launch Groq in 2016, and Nvidia licensed Groq’s technology in late 2025. He now argues that chip startups face structural obstacles, including manufacturing complexity, demanding performance thresholds and constrained access to advanced memory, factors that make land and power assets comparatively more attractive to him as an investor.
Not everyone views the infrastructure trade as risk-free. Jordi Visser of 22V Research has cautioned that AI-related returns are likely to normalise over time, and that the value of land and power holdings depends on shortages and permitting delays persisting rather than easing as regulatory and community pushback intensifies.
What it means for crypto allocation
For crypto markets, the episode sharpens a question that has been building since bitcoin’s retreat from its October peak: whether institutional and venture capital that once treated digital assets as the primary destination for speculative capital is now finding a more tangible alternative in AI infrastructure. CZ’s argument that liquidity remains abundant may well be correct, but if that capital continues gravitating toward land, power and long-dated leases rather than bitcoin and altcoins, the bear market CZ describes could persist for longer than price charts alone would suggest.
Read more: $16bn AI fund unwind exposes leverage risk at bitcoin miners turned data-centre plays
