CZ Says Liquidity Remains Despite Crypto Bear Market as Chamath Bets on AI Infrastructure

Binance founder Changpeng Zhao (CZ) believes the current crypto bear market is not suffering from a lack of capital. Instead, he argues that significant liquidity remains available, with investors simply searching for the right opportunities rather than rushing back into digital assets.

The latest market data supports that caution. Bitcoin (BTC) is trading near $63,037, down about 45% over the past year and roughly half of its all-time high reached on October 6. While crypto prices remain under pressure, venture capitalist and Social Capital founder Chamath Palihapitiya says his investment focus has shifted away from AI chip startups and toward infrastructure supporting the AI industry.

Palihapitiya said his preferred strategy is investing in what he calls "LPS"—Land, Power, and Shell—acquiring land, securing power connections, and owning buildings that can later be converted into AI data centers. He argues that these assets offer faster and more reliable cash returns because suitable sites with access to electricity are becoming increasingly scarce.

Industry data appears to support his view. Data Center Watch reported that at least 75 U.S. data center projects, representing approximately $130 billion in investments, were blocked or delayed during early 2026. Community opposition has expanded across 49 states, while lawmakers introduced more than 300 state data center bills within six weeks. Maine narrowly missed becoming the first state to ban new data centers after the proposal failed by a single House vote.

Palihapitiya also explained why he no longer favors AI chip development despite helping launch Groq in 2016. Although Nvidia licensed Groq's technology in late 2025, he believes chip startups face major challenges, including manufacturing complexity, demanding performance requirements, and limited access to advanced memory.

He and partner Anita Vlallian have reportedly secured nearly six gigawatts (GW) of power capacity through 2029. A recent benchmark deal saw Bitcoin miner-turned-AI infrastructure company TeraWulf lease a 401-megawattKentucky site to Anthropic under a 20-year agreement expected to generate about $19 billion in revenue.

Still, analysts warn that AI infrastructure investments are not risk-free. 22V Research's Jordi Visser expects AI returns to normalize, while the value of land and power assets depends on continued shortages and permitting delays. For now, CZ maintains that capital remains abundant—the bigger question is whether investors ultimately choose AI infrastructure or return to Bitcoin and the broader crypto market.