A warning has emerged that Silicon Valley’s dominance is no longer assured and that the possibility of its collapse is no longer a simple hypothesis. Former Coinbase chief technology officer Balaji Srinivasan (발라지 스리니바산) argued that political risks and structural policy changes could fundamentally weaken Silicon Valley, and that crypto networks and internet-based technologies would replace it.

On Jan. 28, blockchain outlet BeInCrypto reported that Srinivasan singled out a proposed 2026 California billionaire tax bill as a key factor threatening Silicon Valley’s ecosystem. The bill would impose a 5 percent one-time excise tax on individuals with net assets exceeding $1 billion. He said the tax could shake the foundations of the venture capital structure that has sustained the startup ecosystem.

“Venture capital is an industry based on a ‘power law’ in which a small number of mega-successes compensate for many failures,” Srinivasan said. “If billionaires disappear, neither angel investing nor Silicon Valley can exist,” he said. He warned that the mere discussion of such a tax bill could curb risk-taking and early-stage investment.

Concerns are also emerging in the legal industry. Several law firms, including Baker Botts, said the bill raises various constitutional issues, including violation of the dormant Commerce Clause, retroactive taxation and infringement of property rights. PwC, in contrast, estimated that if the bill is approved in November 2026 it could secure about $100 billion in tax revenue, and said political pressure is growing to expand taxation of tech wealth.

Srinivasan interpreted the tax debate not as a simple tax issue, but as a sign that the political platform on which the technology industry has relied is itself collapsing. He said uncertainty is increasing across the board, including in property rights, stock compensation, the visa system, IPO pathways and regulation of artificial intelligence and cryptocurrencies. He said the tech industry is being criticised by both the left and the right and has become politically isolated.

Some founders and companies are relocating to Texas, Miami, Dubai and Singapore, but many tech firms remain deeply rooted in California, Delaware and New York. Srinivasan warned that those regions are increasingly turning into environments that are unfriendly to the technology industry.

He said he does not see technological innovation itself disappearing. Instead, he described it as a process in which Silicon Valley’s monopoly position is weakening. According to Srinivasan, technology is already decentralising. Hardware manufacturing has already moved to China, unicorn companies are emerging in more than 400 cities worldwide, and open-source AI is reducing dependence on centralised talent hubs.

In this environment, he said cryptocurrencies are in a particularly advantageous position. He said crypto protocols operate as global networks without being tied to a specific country or regulation, and that their decentralised structure gives them resilience to political shocks.

Srinivasan compared the present to an extinction event. He said Silicon Valley is like a huge but vulnerable dinosaur, while cryptocurrencies and internet-native networks are like small mammals that adapt to environmental change. With California’s proposed wealth tax heading toward a 2026 vote, attention is focused on where and in what form the next main hub of the technology industry will take shape.