Coinbase’s First CTO Says Crypto Will Outlive Silicon Valley— Here’s Why

Silicon Valley’s dominance is no longer guaranteed, and its collapse is now a conceivable outcome rather than a fringe thought experiment. That is the warning from Balaji Srinivasan, former Chief Technology Officer of Coinbase. The former Coinbase executive argues that mounting political risk and structural policy shifts could reduce the Valley “from one to zero” within the next decade, while crypto-native networks emerge as its natural successors. California’s Billionaire Tax Puts Silicon Valley on the Ballot Srinivasan outlined a scenario in which Silicon Valley’s core economic engine, venture capital, breaks down under the weight of: Wealth taxation Regulatory hostility, and Bipartisan political pressure Central to his thesis is California’s proposed 2026 Billionaire Tax Act, a ballot initiative that would impose a one-time 5% excise tax on individuals with net worth exceeding $1 billion. “There is a scenario in which Silicon Valley could literally go to zero in the next ten years,” Srinivasan wrote. “The successors would be China and the Internet: namely Chinese tech companies and Internet-based crypto protocols, because those have embedded political protection in a way Silicon Valley simply doesn’t.” Srinivasan argues the tax strikes directly at the “power law” economics that underpin startup funding. Venture capital depends on the possibility of extreme upside—rare, outsized exits that compensate for widespread failure. Remove the prospect of billionaire outcomes, he contends, and the incentive structure collapses. “No prospect of billionaires means no angel funding means no Silicon Valley,” Srinivasan said, warning that even the attempt to pass such measures could chill risk-taking and early-stage investment. Legal firms, including Baker Botts, have flagged extensive constitutional vulnerabilities in the proposal. These range from Dormant Commerce Clause violations to concerns about retroactivity and takings. Still, PwC estimates the initiative could raise...