Venture investor Chamath Palihapitiya, who once thought that Bitcoin had "effectively replaced gold", now thinks that “crypto is dead in America” due to U.S. regulatory pressure on the sector.

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“The United States authorities have firmly pointed their guns at crypto,” Palihapitiya said on an episode of the All-In podcast, which he co-hosts, released on Saturday.

The investor said that while crypto companies “were probably the ones that were the most threatening to the establishment,” the sector also pushed “the boundaries more than any other sector of the startup economy.”

The crypto industry is accusing the Securities and Exchange Commission and its chair Gary Gensler of “regulation by enforcement,” or pursuing lawsuits against cryptocurrency companies rather than setting a clear regulatory framework.

“You had Gensler even blaming the banking crisis on crypto,” Palihapitiya complained. The chair of the SEC has highlighted two crypto-friendly failed banks, Silvergate Bank and the Signature Bank of New York, in congressional remarks on the crisis.

The pressure on crypto exchanges is encouraging some companies to look outside of the U.S. Coinbase announced last week that Bermuda had granted the company a license to operate in the territory, in what is likely the first step towards launching a new offshore exchange.

Crypto exchanges are also thinking about the semi-autonomous Chinese city of Hong Kong, whose government is embracing digital assets and cryptocurrencies as a way to revive its status as an international financial center. The city’s financial regulators have proposed rules to allow retail trading of digital assets, and is helping to connect crypto firms with banks.

That’s leading some crypto companies to move their Asia operations to Hong Kong. At a Congressional hearing last week, Rep. Tom Emmer (R-Minn.) accused Gensler of “doing nothing in protecting everyday Americans and pushing American firms into the hands of the [Chinese Communist Party].” (Cryptocurrency trading is still banned in mainland China, unlike in semi-autonomous Hong Kong.)

On Monday, Coinbase sued to compel the SEC to respond to the exchange’s petition asking for rulemaking, filed last July. “Because we’re absolutely convinced the SEC is violating the law, we feel like we have no choice but to take them to court,” Coinbase chief legal officer Paul Grewal told Fortune. Coinbase also received a Wells Notice, which informs a firm of imminent legal action, from the SEC on March 22.

Palihaptiya on Saturday suggested Coinbase was a company that “tried to do the right things" when it came to working with regulators.

Not quite to $200,000 anymore

Palihapitiya used to be very bullish on Bitcoin, telling CNBC in 2021 that he expected Bitcoin to eventually hit $200,000. The cryptocurrency was worth around $39,000 at the time.

Bitcoin would eventually peak at almost $69,000 in November 2021, before plunging in value in 2022 following several high-profile crypto scandals and interest rate increases by the U.S. Federal Reserve. The cryptocurrency bottomed at about $15,500 in December 2022, and has since rebounded to hover between $27,000 and $30,000.

Interest rate hikes have also hit Palihapitiya’s other investments. The investor was well-known for taking start-ups like space tourism provider Virgin Galactic and real estate platform Opendoor to public markets through special purpose acquisition companies. SPACs, sometimes known as blank-check firms, are public firms constituted for the purpose of acquiring a privately-held company, which inherits the listing.

Palihapitiya closed two of his SPACs last September after failing to acquire a company to take public. “The era of excess, abundance, and zero-interest-rate policy has come to an end," wrote Palihapitiya to Social Capital's limited partners in early April, continuing that the past year was like "getting cold water thrown in our faces.

Still, some bullish bets on Bitcoin are re-emerging. On Monday, Standard Chartered's head of digital assets research suggested that the cryptocurrency might hit $100,000 by the end of 2024, citing an end to interest rate hikes following the banking crisis in the U.S.

This story was originally featured on Fortune.com

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