Zhao Changpeng: Bitcoin is a better hedge against inflation than AI stocks

Zhao Changpeng: Bitcoin is more resistant to inflation than artificial intelligence stocks

Zhao Changpeng, founder and former CEO of Binance, made sharp remarks on platform X this week, triggering heated discussions in the cryptocurrency community. He wrote on his account with 2.5 million followers: "Artificial intelligence is great, but it cannot protect you from inflation. Bitcoin can." The unexplained post quickly attracted a lot of attention and received more than 1.3 million page views.

Bitcoin scarcity and equity dilution in artificial intelligence companies

Zhao Changpeng's comparison highlights the fundamental differences between Bitcoin, the world's leading digital asset, and fast-growing artificial intelligence stocks. He emphasized that the fixed supply of 21 million bitcoins gives it unique scarcity, making it naturally able to withstand inflationary pressure brought by monetary expansion.

In contrast, artificial intelligence companies do not have such a cap. Companies in this sector often raise capital by issuing additional shares, which can dilute existing shareholders. This dilution and the ability to borrow and expand endlessly means that artificial intelligence stocks can outperform inflation in nominal returns, but may not be as effective as Bitcoin in resisting currency devaluation.

Economic data shows that traditional fiat currencies depreciate by about 6% to 7% annually. At the same time, real returns (adjusted for inflation) on government bonds have been negative for most of the past decade. Although artificial intelligence-related stocks have achieved significant gains, these gains reflect growth rather than protection against inflation.

Zhao Changpeng elaborated on his view: Although artificial intelligence has huge technical and financial growth potential, only Bitcoin can provide clear inflation protection with its limited supply.

Recent price trends and market background

The current price of Bitcoin is close to US$63000, down about 50% from its historical high. Bitcoin rebounded to above $65000 after U.S. producer price index data fell below expectations, and market expectations for the Federal Reserve to raise interest rates weakened.

Ethereum also benefited from the same macro environment, with prices rising back to above $1900 over the same period.

Current price: Bitcoin (BTC) is US$63000, with a historical high of US$126000, with a retracement rate of 50%; Ethereum (ETH) is US$1900, with a historical high of US$4200, with a retracement rate of 55%.

Earlier this month, Zhao Changpeng predicted that Bitcoin might reach US$1 million in 2033. He cited historical growth patterns and market cycles and pointed out that the return rate in the previous cycle was low, about twice, which is partly attributed to the flow of funds to artificial intelligence-related investments. Despite the competition, Zhao Changpeng remains confident in the long-term prospects of Bitcoin as a store of value.

Artificial intelligence IPOs and institutional capital flows

Investor attention is also focused on the initial public offerings of major artificial intelligence companies such as OpenAI and Anthropic. These IPOs may prompt institutions to shift funds away from current positions (such as cryptocurrencies) to new AI equity. This competitive dynamic raises questions about how investment flows between the two areas are evolving.

Some cryptocurrency mining companies have begun to adjust their strategies to take advantage of the needs of artificial intelligence computing infrastructure. For example, TeraWulf is seeking to partner with Anthropic to raise funds for artificial intelligence data centers, marking a significant transformation from its traditional cryptocurrency mining business. Zhao Changpeng expressed interest in investment in artificial intelligence infrastructure and data centers, but still emphasized the role of Bitcoin in alleviating inflation risks.

Zhao Changpeng maintains a clear distinction: Bitcoin is designed to fight against inflation, while artificial intelligence represents a growth investment opportunity. He believes investors should recognize that these assets are fundamentally different tools in diversified portfolios.