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 roughly $100 billion if approved in November 2026. This signals a rising political appetite for taxing concentrated tech wealth, despite legal uncertainty.

Political Risk Becomes Structural

Beyond taxation, Srinivasan frames the threat as a broader erosion of the political “platform” tech companies rely on, comparable to a failing operating system.

He points to growing instability around property rights, stock compensation, visas, IPO pathways, and regulatory treatment of emerging technologies such as AI and crypto.

The former Coinbase executive argues that hostility now comes from both sides of the political spectrum. For parts of the left, tech represents concentrated capital and inequality; for parts of the right, it symbolizes globalization and cultural displacement.

This dual pressure, Srinivasan says, leaves the industry politically isolated.

While some founders have relocated to Texas, Miami, Dubai, or Singapore, he warns most companies remain deeply embedded across California, Delaware, and New York—jurisdictions he describes as increasingly hostile to concentrated tech power.

Crypto as the “Mammals”

Yet Srinivasan does not predict the end of technological progress—only the end of Silicon Valley’s monopoly over it.

In his view, tech is already decentralizing. Hardware manufacturing has shifted toward China. Unicorn startups now operate in more than 400 cities globally. Open-source AI models are reducing reliance on centralized talent hubs.

Crypto, he argues, is uniquely positioned to thrive in this environment. Unlike traditional tech firms, crypto protocols operate globally, are not anchored to a single jurisdiction, and derive resilience from decentralization.

Srinivasan likens the moment to an extinction event. Silicon Valley, he suggests, resembles the dinosaurs, dominant but fragile.

Crypto and internet-native networks, by contrast, are the mammals: smaller, undervalued, but structurally adapted to survive political shock.

As California’s wealth tax proposal advances toward a 2026 vote, the question is more about where and in what form its next chapter will be written, rather than whether tech will continue.

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