Transcription
We're going through the most extraordinary time in human history. Nothing else matters. This whole funneling of all capital into intelligence is the biggest race that's ever happened. The game is so big that nobody will stop. AI in 3 years has now exceeded all of the output of all humans on Earth.
So that means that it's still early to invest in AI. I think it's Ral Pal, the co-founder and CEO of Real Vision, a financial media platform delivering institutional-grade market insights. He's a respected macro investor and former Goldman Sachs and GLG trader.
You've been adding more in the nasty recent correction. I added bit of Zcash. I didn't buy enough. Obviously, you never do when it goes up a lot. Privacy in the world has value and I think people understand that more. It's a very easy trade. It's Bitcoin with privacy.
You would never sell if you don't have to. I've obviously known this for a long time. With all of the things we've talked about, the endless debation of currency, plus everything going on chain, it's hard for everybody. But if you logically think about it, we know where the world is going. We kind of know where the market cap is going to be over time. So why would you ever sell it?
Bitcoin going from 126 down to 60K. It's a nasty correction in a bull market. I've been in crypto since 2013. I've seen many corrections, non-bare markets. And when that happens to Bitcoin, others go down more. It happens all the time.
I'm not doing another event. I'm not buying another shitcoin. I'm not buying another NFT. It's all the same. I'm never drinking again. I'm not going to demar it again. But that's a terrible one. Yeah, thank you. I don't want to hear that one. That was painful. Thank you.
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I've been traveling for six weeks non-stop in Europe and then here and then in in then in New York and I fly to Singapore for 10 days and I go back to Europe. Yeah, I've just done London, Geneva. You go in Geneva with the Swissborg. Yeah. And then Athens. I was the Yeah, he went to Athens with No. Yeah, I went to their thing. Yeah. He's a great guy. Super nice. Super nice. Amazing. I mean actually I think all of them are very nice. They have like very good good people. Yeah. Yeah. Like us. Exactly like us. Like everyone should be good people. Get out of the way. Yeah. See that? Ah we got some new friends here. Is that a gold card? I've got one. You have it? Yeah. Yeah. But what is it for? This is cast card. Yeah. Yeah. Oh, nice. Beautiful. Do you use it? No. Do you? But do you use the the Apple Pay thing? For me, I just I can't use I can't use Apple Pay on in the My phone's registered in the Cayman Islands. Ah, okay. Interesting. For me, I just spend my life on stable coins and on cast. Just Apple Pay, Apple Pay, Apple Pay, Apple Pay. It's like a It's like an addiction. The problem is like you don't realize it's money, right? It's the same as when you buy some Bitcoin or some shitcoin, you don't realize it's actual money. Now with stable coin you just like Apple pay Apple pay for everything and you're like oh [ __ ] like this is this is this is going this is going fast buying NFTs you know you don't think you're spending money but you are well funny money in the real money world and they're both different.
Why is that the case like what happens in human brain that we don't realize and the funny money is much bigger than right you go you go for I mean we're in the US you go for a steak the the other morning I I landed in New I was I was having steak and eggs in New York airport GFK. I look at I look at the the breakfast and I'm like, "Okay, $48 steak and eggs." I'm like, "Okay, it's not cheap, but I want steak and eggs." I mean, it's actually very expensive. The total bill was 75 with uh the tax plus the tip for for a freaking steak and egg, right? So, I'm like, "What the [ __ ] 75 bucks on steak and egg breakfast. Like, this is retarded." But then you'll spend 100 times that that or a thousand times that on some NFT that then goes down 80% and you'll be happy. How is that possible?
I don't know. It's it's the it's the weirdest thing. It's because we we live in two economies, right? And this economy grows at what 50% to 150% a year, even though we've had a few not years of it not growing that recently. And the other one grows at 2% a year. And so of course you're going to use money from that one. And this feels like a whole different world. Doesn't feel real. No.
How are we doing, Raul? We're exhausted from travel. I've done enough. I've done enough traveling there. I think I've been at home in Grand Cayman. I think I worked out 10 days in the last four months. Wow. What have you been doing for all this time? Well, part of it is my girlfriend lives in Texas, so I spend time there. But then I I don't even know this like there was the real vision event that was in Miami. There was a my asset management event that was in Miami. I've been to New York a few times. I've been to Europe. I've been I don't know just endlessly on a plane. I don't know how many flights I've taken this year. Less than you. But I've done at least 50 flights. Is it 50? Can't be there. You're doing better than me actually. You're doing much better than me. I mean much worse than me. Like I thought I was bad. Yeah, but yours are all long haul mainly. Yeah. You're going you're doing insane things. I was supposed to have my first half of the year kind of lined up. I was like, I'm going to have good podcast for the first six months. I'm just going to have to go to token 249 in Dubai and for the first time in two or three years. I will have like a managed life and I can when you pretended to have a girlfriend. Well, actually I still have her. How? It's impossible. Still have her. She travels with me a lot. But anyway, that's what I do. I mean, Lindsay comes with me all the time. It's the only way. Yeah, but then the freaking war happened and then Dubai token doesn't happen. I'm like, what's the next Dubai consensus in Miami? [ __ ] Like, because everyone was, we're not going to Dubai. We're going to Miami. I'm like, another [ __ ] flight to to the US. And I was like, I'm not doing anything else. No more events. I'm done with it. I'm done. And then I'm at the SU event just now. They're like, you are coming to SU base camp. It's at token 2049. Like it's in October. I'm like, I'm just trying to go on holiday in October. Nobody got to come. So, it's like and I know there'll be somebody else will force another thing in my diary.
I'm not doing another event. I'm not buying another shitcoin. I'm not buying another NFT. It's all the same. Yeah. We're just Yes. Yes. I'm never drinking again. I wanted to make a bad joke, but I'm not going to I'm not going to do it. I'm not going to marry it again, but that's a terrible one. Yeah. Thank you. I don't want to hear that one.
So, That That was painful. Thank you. Let's get serious here. Go for it. Let's look at what's happening with the markets, the stock market. First, there's this funny video that you reshared and commented couple of weeks ago. It's this video of this kind of cartoon character that say, "I love this market. I really do. It's so easy to make money. It's actually free. You have the US promising to buy everything forever. Just buy the [ __ ] dip, you [ __ ] idiot. And you will make money, too. If you have no money, then borrow money at a ridiculously low rate and buy the [ __ ] dip. Then tell your friends to do the same. It's not a pyramid scheme, you idiot. It's a buy the [ __ ] dip scheme. Just shut the [ __ ] up and buy the [ __ ] dip, you idiot. What's happening with the stock market that just goes up forever?"
There's two things. Obviously, liquidity, right? That's the one fundamental we're seeing, liquidity expansion. The other thing is we're going through the most extraordinary time in human history. Nothing else matters. This whole funneling of all capital into intelligence is the biggest race that's ever happened.
It's the race of nations. It's the race of corporations. It's the race of everybody. And so of course it's going to suck every single piece of capital because you can't slow it down.
Tell me what about this race? There is no world in which you can allow one superpower to have AGI. Mhm. So there has to be two. There's only two nations in the world who can afford to do it. That's the US and China. No nation can now game theory suggests that no nation can now stop because the other one will get the advantage. So there is nothing that can stop this. Now it doesn't mean we can't have a bare market at some point whatever but even then you play through things like people were fearing like there's people borrowing money in this it's all going to blow up. Okay, let's say let's say Open AI blows up. They run out of money. That's the doomous thing. What happens the next second that's announced? Is the US going to say, "Oh, we're going to lose one of the largest AI firms." They're going to say, "Right, what we're going to do is we're going to auction off the assets immediately to Microsoft, Google, and everybody else who will buy them in seconds." Because if they sell it to one company, that one company doubles their compute overnight and then wins the entire game, which you can't allow either. You can't allow one company to have the advantage. So the game is so big that nobody will stop. All of the Iran game, all of the Venezuela game, it's all the same game. It's converting, which I call the universal code, converting units of energy into units of intelligence. Every single process is this. So the So it's too big to fail. Yeah. Therefore, might the [ __ ] dip, you [ __ ] idiot. That's right.
But forever. Like, does it ever end? Well, the you know, this is a hard question because we actually wrote about in global macro investor a case that it doesn't end until we get to the economic singularity and and we don't really know how companies work anymore and all of that kind of stuff.
What What is the econ economic singularity? Economic singularity is when the system is no longer capable of dealing with the speed of technology and that's all institutions. The economy itself, how we measure the economy, you know that magic formula of population growth plus productivity growth plus debt growth. When you bring in AI and robots as population, we've gone from a maximum population of 9 billion people that we are today and we can go to 18 billion, 100 billion, a trillion people. We can make infinite agents. Yeah, Elon's talking about the robot will be the largest single product ever sold. Okay, there's a billion robots. Okay, that makes a difference. But when you're talking about 10 billion 50 billion agents, we have no comprehension what that means. So the economic system just doesn't function. It's moving so fast now. So almost all technological adoption in all of history have been met law. So they they kind of grow in that log channel. Look at Google chart from its day one. Look at um Facebook. Look at the NASDAQ. Look at all of them. They're all the same chart. And that's mass law. Now the issue is is AI is the first ever recorded example of Reed's law. So Reed's law was theoretical. It's not observed in biology. We don't see it in things like viruses. Doesn't exist. Now it exists. Mhm. And so what we're seeing is um Reed's law is Meetoff's law squared. So it's the exponential of the log channel. The exponential of the exponential. So to put it in terms that people understand, ARC put out a piece of research about showing the annual output of words, estimated annual output of words of all of humanity each year from the Gutenberg press in 1500 to today. AI in three years has now exceeded per year all of the output of all humans on Earth in terms of words by 2028. So this is now call it six years 5 years after AI really came out. It will have produced more words than all of humanity has ever produced in sum total.
So the charts of all these AI things are this anthropic revenues never been seen before. He was he was on an interview this morning saying well we kind of [ __ ] up a bit because we were expecting a 10x growth and we got an 80x growth in the first quarter. Crazy. I mean, it's also crazy amazingly good. It's incredible. Yeah. But but this is what we're dealing with, right? So the economic singularity is when right when you've got economic agents that can form capital, that's what memecoins are about. We've talked about this in the past, right? Instant capital formation, instant capital destruction. They can build instant businesses, digital businesses. They can they can take a market quickly and then disappear when the market opportunity goes. Where's the role of these giant lumbering corporations? Um, you know, who who are the workers in that economy? How does economic growth? We can have 50% economic growth and we somehow need to capture that and give it back to humans as well. So the economic singularity is that it's when the system no longer functions um because everything is moving so fast. So if you think about if we talk about orders of magnitude how much faster this is the biological substrate carbon it produces outputs of um um output speed of 1 millisecond human thought stuff like that neurons firing silicon when you put and this is this is how stupid this is this is how [ __ ] amazing we're putting electricity through sand and creating intelligence Right? Silicon is the second most common thing on Earth. We're now putting electricity through it and creating better intelligence. It's wild. And this whole process is now produces intelligence at six orders of magnitude faster. So it moves at a million times the speed of a human neuron.
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So that means that it's still early to invest in AI because all this stuff is going completely exponential. We see all these stocks going complete nuts and people in crypto a bunch have already left. Some others are like [ __ ] man. Like this thing is like this thing is like crypto in 2020 2020 2021 vertical. What am I doing here? Maybe I should for a but I don't want to get burnt. Like what do people do? I don't know if they want to bet on AI.
So I can't see how it stops because the race is so big. M. So what is the US going to do? Is it going to withdraw liquidity and then everything slows down? Well, maybe. But if China doesn't, then they there's a real game here that has to be played. And don't forget, they've rolled all of the debt to the short end anyway. So that's kind of an ongoing process. You just keep issuing debt, issuing debt. So I don't know if they tighten liquidity unless we end up with a larger inflation. But what Scott Besson is saying is we're going to run the the economy like the Greenspan is. And what that means was Greenspan basically came in, cut rates, and then did nothing. It did literally nothing because it the economy was hot from 95 till 2001. Headline inflation was going up a bit, but he's like productivity will take care of it because of the internet. And so core inflation was flat. They're going to do the same thing. They've said it very clearly. So that's why Walsh goes in, he does nothing. He cuts rates and then does nothing. Just gets out of the way. Let's productivity miracle take the rest and then let the economy grow faster than the debt pile so debt to GDP goes down. That's the only game they can play. Um
Are you playing the AI bet or trend? Um certainly within Global Macro Investor and Realvision Pro, we've got a whole load of recommendations since I came up with the whole um exponential age thesis which was basically this. I just didn't imagine it was going to go this fast. So I've had most of the those kind of names for a while. I still think the crypto bet is one of the superior bets in the space. It just doesn't feel like it right now.
So you think it's still superior to AI? um or more like in terms of risk adjusted returns in general you'll end up over extended period of time making more money out of crypto than you will out of the bigger hyperscalers and stuff like that. Sure you know it's difficult to compete with the chip companies. They're the single most important part of the units of energy into units of intelligence process. to all capital flows there and there seems to be no signs of this stopping. Literally every one of them has been on television in the last week saying we are booked out for 3 years and we have to book out beyond that. There is such a scramble for chips that now X AI is giving their older data centers to Anthropic who can't get enough chips. Nobody can get enough compute and nobody can get enough energy right now. I mean we've never seen anything like this. There's there's been nothing like it. And unlike the um unlike the tech boom in the late '9s, there's no debt here really. It's very little. So, it's being run out of cash flow of the biggest most cash generative firms in history as well. I don't know how this stops.
This is a crypto podcast. Although we talk about AI, marriage, fake girlfriends, all of those things. Crypto markets contrary to stock market aren't going up forever. At least not right now. They are going up forever.
Ah. What has been happening in crypto? So crypto there's only a certain amount of liquidity in the system. The US withdrew liquidity for the government shutdown. That lags crypto by 3 months. It hit crypto that was 1010 was in the middle of all of that. Liquidity is picking up again. Crypto's picking up again. But there's a gap because NASDAQ because of this massive need for capital and investment in the space. It just sucked in capital. The Chinese for a period of time bought a lot of gold in that gold rally. So what happened was the riskiest of assets, the furthest duration assets, which is SAS companies and crypto produced identical charts and they just got left behind for a bit. But what's happened is literally everything's changed because in that period from that period of October um last year we birthed economic agents and they're scaling everywhere. Everybody's building them. So what you've got is it it dawned on me suddenly is like everyone's like yeah agents are going to use you know wallets and blah blah blah. But then when you play it through from what I've been talking about the speed of which this is happening this means crypto has an infinite TAM the total addressable market is all of the agents and they will be economic actors in their own right building their own businesses stuff like that so it's changed everything. So when you were saying crypto is going to like hundred trillion dollars or maybe half of that if we miss this was based on humans. Yeah. Yeah. It it was now it's still Metcov's law. It still follows the log trend and that would take us still there. You might get there a bit earlier, but what it kind of means is it just keeps going because a the debasement of currency won't stop until debt to GDP collapses. We're not there yet. GDP growth is not fast enough. We need to get through the economic singularity. Then we see, you know, the global coordination rails of of uh blockchain being used for more and more things. Don't forget the entire financial system is going onto these rails and you get to frontr run it. They've announced what they're going to do and I've always said this. We've been able to frontr run the institutions all the way through and people get exasperated with crypto because it went down for a year and you're like look at the [ __ ] picture. You've got an infinite TAM the entire financial system going on these rails. The Clarity Act being passed the government will not stop debasing the currency. Mhm. So it just keeps going.
So the worst is over for crypto. Yeah. Why? Because the liquidity is flowing. Liquidity is flowing in the US. Liquidity is flowing in in in uh China. It's flowing um across the world. So liquidity is going up. Global liquidity keeps going. It's accelerating. US liquidity is accelerating. So therefore, nothing to worry about yet. So for you, Bitcoin going from 126 down to 60K is is not a bare market. No, it's a nasty correction. It's a it's a nasty correction in a bull market. Now, I've been in crypto since 2013. I've seen many corrections, non-bare markets of 50% in Bitcoin. But people forget this every time. And when that happens to Bitcoin, others go down more. We've talked about this in the past. There's a risk curve. It's natural. Happens all the time. I think it was Salana last cycle did down 80 in uh in 2021 before it before it had that massive run and that was in a bull market year with liquidity flowing. Happens all the time. Happened to Ethereum happen. So it happens all the time.
The difference is in 2021 when Bitcoin went down 50%. Yeah. It was pretty quick. Went down and then it went back up also very quickly and then it went down. It was a bare market. This time around it's kind of choppy and it takes time and months and so that's probably why people are Yeah. And what might you get from the other side of it? You might get a longer more larger bull market, right? Cuz don't forget the the Bitcoin pull back in 2021 as you said was it was what something like January to July and it was back alltime highs in November. So it's actually six months of falling. So, when did Bitcoin make its all-time high? December last year, I think. So, it's only, you know, it only went down the equivalent number of months. Didn't go down that long. Um, but let's see. The longer it takes to go up, the more extended it becomes, I think. Some people talk about I mean there's this K-shap recovery that's been talked about for a long time in um the economy and uh and in the stock market but now some people talk about Kshape um recovering crypto most assets won't come back and worse some companies that are doing well cannot be invested into for example stable coin companies it's extremely hard there's no token you have to do some private equity or VC see stuff to be able to buy them. That's why people are pissed basically because they haven't really made money and they feel like this there's a bunch of people or quite a lot who say actually all these crypto coins are dead but there is stable coins RWA bitcoin and like a few other things that will go up but people can't buy these companies. Therefore, they feel like the the the promise of I can invest early in something that will go up, which they also couldn't do in AI, right? The the kind of promise is broken.
What What do you think about that? I think it's not true. I think product market fit wins hyperlquid. You know, you've seen it. Product market fit wins. So, there are plenty of opportunities. just because your [ __ ] token doesn't go up, you know, it the market owes you nothing, you would just have to be better at doing a job. That's a good one, actually. The market owes you nothing. But people have been That's why a lot of people left pistol also over the last two years because people have been um used to easy money by closing their eyes, everything going up.
We haven't had the full accelerated the banana zone phase. We've not had that because liquidity was still subdued in 2024. So we had good year 2022 from the low. So end of the year, 2023 was a great year and then 24 peted out and that was it. Um Bitcoin continued for a bit, but really we just haven't had the acceleration period. So people have the cycle has extended and everyone's given up on year four of potentially fiveyear cycle, maybe longer now. I don't know. I don't know how broken the cycle is by what's going on. It's like, you know, don't forget the K-shaped economy. So, tech economy is booming. The uh the real economy is not.
So, what are they trying to do? They're trying to cut rates to help regular people. The ISM that we've talked about in the past is now ripping positive as crypto rises. Same thing. And they're going to have the largest infrastructure investment in the history of the world is about to happen. in data centers and all of that buildout and that's going to employ a lot of people in construction services everything and we're going to have a boom and that money gets saved spent or invested and people will come to the casino as they always do uh in the crypto market. So again, I don't have an issue. I also think that people misunderstand the rise of stable coins, RWAs, the finance system bringing stuff on chain. They're like, how do we participate in this? Just own the [ __ ] token. This this like the underlying layer one layer one. I the layer one trade is so simple. It's so obvious. It's the big trade. It is the I talked about this the universal basic equity layer for all of us. If we are going to see the largest um parts of the economy given over to AI and agents and they're going to use crypto rails. Mhm. We just get to own the layer ones and we participate in their success. Right. We didn't get that with the internet and nobody there's no excuse for people not to do this.
You've been adding more as you always do in the nasty recent correction. What did you add? Um, I added some Zcash. Why? I bought more Suie obviously. Um, but I added bit of Zcash. Last time you said because it was going crazy in December, you said I'm going to wait for for it to go down and I'm going to see how it uh how it plays out and how it reacts. Correct. That's what exactly what I did and into the correction um I started buying some. Um I didn't buy enough obviously you never do when it goes up a lot. Um but because Zcash is so we we've talked a lot about smart contract layer ones right in the world of you know store of value there is only one well there was only one really but now we've got another one which is it has a subsection of that and I think you know I was talking to Barry Silva about this the other day is to assume that it could be 10% of Bitcoin 5% great in terms of you know how much economic value it has privacy in the world has value for people and I think people will understand that more and so therefore it's a very easy trade it's Bitcoin with privacy. Yeah. You know I love a left curve trade and a right curve trade. Yeah. The midcurve is well they're going to ban it. They're going to do [ __ ] I've lived this all through all of my crypto career. Right. It's always been they're going to ban it. They won't allow you. They won't do it. What's your left curve trade? The left curve trade is it's Bitcoin with privacy. What's the right curve trade? The right curve trade is also quantum proof. And what you're actually doing is proofing yourself somewhat to the power of government that uses has AI control over the people. All of this thing, you know, the bad outcomes, it gives you a lot of different um attributes that are probably very valuable. And people don't know it now, but in the future, what's the probability? It's reasonably high.
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When you add an asset like Zcash, how do you think about allocation portfolio wise? You have like a target. I want to put like 5% 10%. You just say I have a dollar amount. Unfortunately, it's just been trading too strong. So, it's Yeah, it's been crazy. Yeah. So, I didn't I just I was going to buy some and then I bought some and then I was going to buy some more and then I forgot because I was traveling and then it's like, oh [ __ ] it's up 50%. And then I'm like, I'm not going to do this even though I know they're probably good prices, but you know, you know what it's like. I didn't execute it well. Um, so yeah, we'll see. I won't I won't switch around my existing portfolio for it, I don't think. Um, so this has new cash. New cash. Um, but we'll see. you mentioned hype before and I talked to Dante and he mentioned hype multiple times without me even asking about it. So I was like, "Oh, the macro guys talk about hype and hyperlid which I think everyone kind of like started to realize during the war and the weekends. Oh, this this thing is actually helping to price oil markets during the weekends when there is war." and you're a macro investor, so you must have thought like, wow, this is like something really new and kind of crossing the chasm into like mainstream and traditional finance, which is what we're really trying to do in crypto. What are your thoughts on hyperlquid and what these guys are doing? Even on the hype token, are you like not tempted to to do something about that? If I don't use it, I wouldn't buy it and I'm just not a trader. So, you know, we talked about that. So, it's just not for I don't use PES, I don't use leverage, I don't use any of this stuff. So, I get it, but it is a niche within a broader ecosystem and it's a great one. You can have great niche products. Um, but it has no real motor around it. I mean, Robin Hood are going to come after that as fast as they can and eventually Coinbase, too. Now, can Hyper out execute them? Possibly. Probably. I don't know. Don't really have a view on it. Um, but it's not my trade. Now, 24-hour markets, great, but I mean, literally everybody's talking about that.
There's a saying in finance and investing, and I think in life in general, in hindsight, it was obvious. Yes. This of said, it's often said by people who have regrets, who missed a trend, didn't invest. We're lucky to have you here, Raul, the man who can read long-term trends. and you're saying that there are a couple things that are actually obvious in foresight. Let's go through them one by one so people don't have an excuse in 10 years to say in hindsight it was obvious. The first one you mentioned before smart contract layer one will acrewue a larger percentage of crypto total value over time as the investable infrastructure layer. Yeah. Can you explain? So this is the univers basic equity idea right we've for the first time we've got a globalized infrastructure digital infrastructure unlike the internet that we can participate in that the AI and others will use and we get to reap the benefits of them right this is this is the trade-off we're giving to them taking part of our knowledge work away is they're going to give us the ability to make money from their economy that they create over time the layer ones People don't understand this is the lay ones. If you think of all big networks that are important for infrastructure, whether it's operating systems, uh whether it's cloud, all of that, there's basically three to four main players. Then there's a a bunch of specialists and then there's a tale of stuff, but it really accumulates to three or four to five people. This will be the same. So it's going to be around three, four, five chains as layer ones. Then there'll be specialists like hype is a specialist. You know, can that continue? It's a one vertical niche thing. Okay, great. Um, there'll be somebody who does something slightly different, privacy, but that's really on the Bitcoin side of the ledger, which is a non-smark contract. Um, so the infrastructure layer becomes much more important than people understand. We've talked about in the past, every ticket becomes an NFT. you know every all of these things the whole finance system comes on board that's all acrewing value to layer ones how I try and explain the value of a layer one is Ethereum okay so if you were to pull the plug on Ethereum today how much economic value do you destroy I mean huge every layer two all of DeFi all of the real world assets all of NFTTS everything that's been built on ETH goes to zero. ETH is probably undervalued for that already. Let alone the growth rate of these things and let alone thinking well the finance system is going to come a lot on ETH and layer 2s and stuff like that. So that's how you got to think about what is the value of that infrastructure. Uh and so if you think of Bitcoin, Bitcoin has one job and it has one target which is global savings. And so Bitcoin is a power law distribution because over time you can only get to 100% of global savings. Infrastructure layer can scale infinitely which is why again Google and all of those companies have just been like that on a log regression channel.
So that means for you that the layer one whichever you choose ei should be a majority of your portfolio. And I I still think you know I've done a lot of work. just presented this Siri live about this is for me and I know I'm biased because I'm on the board but but this is from deep analysis is it is clearly ETH has the largest amount of economic and intelligence density of any of these Salana has is proven and then we're talking about remember three or four who else the only one through the analysis that I got to was because it has more TVL per user than Salana does and it's a lot younger. No. And when the market fell 80% it didn't lose any economic density in fact maintained it. There was only three tokens that maintained economic density. ETH Salana Sui and when you look at SU on a bunch of other basis you've got the output of intelligence because it's programmability the speed and all of this stuff. So I just think there's a basket of four or five you can own layer ones and you can go to the beach and in 10 years time you can fly back from the beach in a private jet. I thought we don't like to travel anymore. It's a private jet. Private jet. Yeah. It's different. It's different. I don't know. I've never flown in a private jet. So not yet. Not yet. In 10 years, in 10 years, layer ones that can output the largest amount of intelligence per unit of energy will outperform over time. Yes.
So, this is I've not really fully released the entire thing on the universal code. I've written about it. People don't really understand it yet, but the there's a set of operating principles that are observable and provable and understandable of how the universe works. The key one is the entire universe from atomic structure to solar system structure completes um continues to convert units of energy which is the fixed all of physics says is you can't destroy your career energy and out of it comes intelligence. We're part of that process. Um, and AI is part of that process and blockchains are the same process. Everything is they all are networks as well. Every single one of them are created by networks. And so what you've got is an intelligent network of compute and storage, which is blockchain. And money, as we talked about, why does Nvidia get more money than anybody else? Because they're creating more intelligence output than any other company on Earth right now. Why is Anthropic doing it? Because they're produc they're producing more intelligence output. It happens literally everywhere. Why is the NASDAQ outperformed? Once I discovered this universal code, I see it everywhere in everything. It's the organizing principle of the universe. And what you find is all geopolitics is based on it. All of what human activity is based on it. Everything is based on it. So that's what this is about is anything with more intelligence does well. How can you measure that for a layer one to know which one you should bet on or which ones you should bet on?
So intelligence comes in many forms. Firstly, intelligence of human capital. How many builders, programmers, developers? Then what is the programmability and efficiency of that programmability? How fast does that blockchain convert energy into programmable outcomes? So ETH in this case is actually not great but ETH wins massively from the number of developers and economic density the Lindy effects the security all of that right? So it's it's very solid as I've said it's like the Microsoft you know you don't get fired for ETH you got Salana which is much more efficient much faster much cheaper um easier to deal with than ETH um less developers but good good density Um you've got SU which is much earlier but as we said it's uh it's things like programmable um block times block transactions of a thousand transactions within one block. It's like a different order of magnitude than anything else. It's speed to finality is a different order of magnitude. Its programmability is a different order of magnitude. So what you've got is provable intelligence. now doesn't mean anything unless you can prove that hey how many applications does it have built on it how many applications per user you know that kind of stuff you start to see these metrics and you can see density forming it's still not there it's still early you know you want to see you want to see a large portion of stable coins versus TVL which is like that is stored energy in the system ready to be deployed into the system right now su is like um Swiss TVL is equivalent to the stable coin size. You want to see twice that or more. When you get to ETH, you see huge amounts. So there's a there's a bunch of indicators, but what you're looking for is what can you do with the chain? How little cost? So when people look at blockchains, they look at discounted cash flow analysis to value them. How many how much fees does it generate? Doesn't generate fees. ETH's so expensive. It's [ __ ] nonsense because because because the very purpose of a network like this is to be the cheapest fastest. Yeah, absolutely. So if you use discounted cash flows, you miss the actual signal which is cheapest, fastest, most pro programmable will outperform over time. the bigger user the biggest user of defy and crypto payments will be AI agents and their scale their scale is infinite. Yeah, there's So, we've talked about Yeah. crypto payments, right? But I'm just setting up some agents now and a lot of the time you'll start to hit walls for API calls and all of this stuff and there'll be a payment and it'd be 10 cents, whatever the number is, right? You've got tons of these micro payments to make and then larger economic transactions because they can do other stuff. Fine, we kind of all understand that bit. The DeFi bit is really interesting. Defi is actually much better suited for machines than us. You don't even need a front end. I was speaking to one of the guys um at an event last night. I'm like, why even bother with even a website or a front end or anything? Just attach, you know, allow the agents to come do their job, leave in the fastest possible, least friction because that's what wins the this game. Yeah. And so what will agents do? Well, we're talking about a multi-chain world. They're going to end up with even stable coins on three different currencies or four different currencies and they're going to want to rebalance if they want to put it into let's say they've got different transactions, they got different currencies, they will have treasuries, of course they will. And how will they swap? DeFi and they'll do it instantaneously without any human involved and we won't even see it. We won't even see the transaction. And so they're going to be the largest users, sir.
How can someone bet on that? buy the layer one. It's not that complicated. Now, I know layer ones may not be the raciest bet. You won't may not make the most money. And fine, you can go to the casino if you think you're a good VC investor and find which are the protocols that are undervalued versus, you know, are they getting adoption effects. All of that that still applies. You can still do that work. Um, it's just hard. I can't do it. And even the good ones can get hacked as we've seen. Yeah. or have like indirect that's still hot. That's going to be difficult. It's very difficult for them to destroy a layer one. It's very easy to draw an applications layer.
So for you DeFi is not dead cuz we've hear now I had like some people who are actually pretty big telling me man this DeFi thing is dead after what happened in the last two months. Yeah. All these mega hacks. Yeah. H how can
A bank come and say, "Or a financial infrastructure come and say, 'I'm going to use my client's money on this DeFi stuff that can get hacked $300 million.'"
So doesn't it just force people to build better products? I mean, that's the answer, right? We're not building good enough products.
Now, don't forget, why have we all got Norton antivirus or whatever on our bloody computers? Because they get hacked. This is not just this. It's everywhere. Every single bank has a group internally that has to deal with hacks. They have a reporting number of X percentage is stolen from the bank, but they don't make a big deal of it because they don't want to disturb people, but it happens at every level in everything we do.
You said before, "All financial rails will move to blockchain rails."
So, this was a prediction I went back, uh, certain GMI, I made in 2014. I said, that's before smart contracts. I said, "This is the infrastructure rail for the entire financial industry, blockchain." Um, and I've been saying that ever since. And I said, "You can front-run the institutions," and now they're all announcing it. Why? Because it's a more efficient way of output of energy.
And you can still front-run them. And you can still front-run them. But it's the most single efficient way for the financial system to operate. The financial system will always move to the most efficient rails. Why? Because you make more money. Always works that way.
Digital art, your favorite one, will accrue value, vast value over time due to wealth effect of the above.
Yeah. You and I have talked about this on the podcast in the past, right? If I'm right, and I can't say I'm not going to be, and we go to a hundred trillion dollars over time, that's a [ __ ] ton amount of money. M. And that is humans participating in what is going on, right? We're participating in the machine economy. Fantastic. The crypto rails, the finance system, you know, they're taking our money away from us by coming into this. They're they're taking our rails. No, they're they're going to rent our rails off us and we're going to own the tokens. So, we're going to make the money out of all this and at the end of it all, we'll have made a decent amount of money and people will buy trophy assets. And we're going through the most ridiculous point in all of humanity. We're going through the point where we are not apex intelligence. And art records all of the stories of our time, the culture of our time. This is the single biggest moment in all of humanity is in is happening as we speak. I mean, what a time to be alive. And tell me that art is not going to be important. That's [ __ ] ridiculous.
What's the time frame for that? Because I bought a bunch of uh Crypto Punks and um XCOPY.
Yeah.
I don't look at this anymore. I'm like, you know, the thing that you don't want to look at because it's like going up a bit and it goes down. Oh man, this thing is not moving.
Yeah.
The time frame is much longer.
Yeah. But don't forget, it's a function of the vibrancy of the crypto economy.
So, you have to wait until crypto is worth 10, 20, 30, 40, 50 trillion to actually see a massive difference. Well, you'll see it. Because people will. The moment, let's say ETH goes from wherever it is today, two and a half or whatever, to five.
Is this ever happening again?
I was talking with Dantier.
We are allowed to have nice things. I know nobody believes it, thinks we've been robbed of the whole thing.
Five years of pain, right? So I was talking with Dantier and was saying like, this is kind of like for for a lot of people when NASDAQ is up 2x, Bitcoin barely has moved in five years. Obviously, it depends on what time frame you take, but if you look, okay, back five years, it's it feels like a lost decade for a lot of people in crypto.
When you ask Dan that and me that, we'll say, "Well, imagine what happens when it breaks out."
That is accumulated energy that happens. Because we know what's happening. It's [ __ ] obvious that they're going to be doing all of these things. The governments will continue to do base currency.
Yeah.
The um financial industry will build on these rails. The agents are coming. It's [ __ ] obvious. So therefore, when it does break out, the accumulated energy that it has is going to be something dramatic. And people have forgotten what the energy looks like when it hits those markets. They've forgotten how vertical.
It's been a long time. Because people are looking at, you know, Micron or Intel or whatever and they're like, "Oh my god, look at Intel stock, 10-year consolidation explosion. I mean, literal explosion." Um, I kind of think that's where it's going now. Is that this year, next year? Doesn't really matter. Um, but even when ETH gets back up to the highs of the range, let's say, you'll see a lot more activity in NFTs. Because people are feeling more confident. But if it breaks through, then everything changes.
How the hell do you structure an NFT portfolio?
Um, so I'm actually going to launch a fund on this. Um, because so many people came to me and said, "Well, I don't know how to do it." And I know how to do it. I've got the, you know, I know the best people in the world are doing this. So, I think we're going to launch a fund. Um, XPAM will be able to hopefully announce a partner that'll be doing it with, which will be super interesting. Uh, we're just kind of finalizing that now. M. But otherwise, you know, it's not easy for somebody who doesn't know how to do it, having talked people through it. Um.
How would you structure an NFT fund?
That's because I know the space very well and the people who are going to be involved in this know the um the space extremely well.
So the fund will be structured for grail assets. So these are the really expensive, super scarce ones that already have proven social consensus. For example.
So.
What's a grail asset? One, a one of one XCOPY, alien Crypto Punk, a uh Sam Spratt one of one, a um people one of one, you know, these things proven value trade anywhere between $600,000 and 10, 10 million, 20 million, $30 million. Then the next tier down is the interesting tier. There's good convexity, which is the artists that have social consensus, have long-term proven value, particularly in this sideways market in ETH for a long time that capture attention. There's a whole group of those who can get wildly rerated. And so they may trade at, let's say, for example, for example, maybe one to example, Die with the most likes, who's a very uh fantastic artist that is humorous, kind of gross, but what he's doing is commenting on the decline of middle America. It's like a really important commentary, but also with a love affair from middle America because he's from Indiana. He lives in it, sees it. Uh, and it's amazing work, likely because of the importance of what he's what he's cataloging is going to matter. And so um and he's very unique in how he does it. He's kind of like the Hunter S. Thompson of artists. So I think that's important. There's another German artist called Kim Asendorf who's at the cutting edge of AI and art where he's got these incredible 3D art, but it's made of a number of pixels, but you can define the number of pixels because each pixel itself is a token.
So, every pixel has value. And he's got these incredible things. And these things, these kind of um collections are somewhere between, you know, the really high quality ones of those are somewhere between 20 and 40 ETH.
Call it, call it 10 to 50 ETH. That that bucket of people. Some of those can get wildly rerated. Now, don't forget ETH can get rerated too. The convexity in a trade like this, and we've talked about this in the past, is absurd. If an artist gets rerated from 20 to 200 ETH, and there's plenty of things that trade at 200 ETH, that's a 5x in that in that. And let's say over the next 10 years, where's ETH 10 years? I have no idea. But let's say it's 20,000, well, that's a massive 100x return because you get 10x on the NFT and ETH terms and 10x on ETH. Because as we talked about in the beginning, the ETH economy is not the same as the dollar economy. If you're rich in that economy, you'll spend more in that economy.
What kind of investor might be interested in investing into an NFT fund?
So, we've spoken to a lot of people. There's a lot of family offices, general high net worth people who are curious, who've been in crypto, but non-crypto uh people who are interested in the art world. What the other group is, there's a lot of crypto uh OGs who've made a lot of money out of the space and have never bought digital art. And they're like, "Yeah." And I think it was a big move when Mickey Mala bought Crypto Punk's IP. It's made it public. People is still, you know, very well seen within the space and people starting to get it that you can't be in this space and not have the great one of the best product market fits it's ever created, which is digital art on chain. And so I speak to a lot of them. So I think a lot of the crypto OGs will buy art because all of the tech tycoons bought art, all of the real estate tycoons bought art, all of the hedge funders bought art. As soon as people make a lot of money, they buy art. Quick shout out to the legendary team at Jupiter, the DeFi super app. Anything you want to do on chain, from trading to earning yield, you can just use Jupiter. Personally, I'd recommend getting the Jupiter wallet on either your phone or your laptop. 10 times faster and 10 times cheaper than the competition. You're going to love it. Thank you to the awesome team at Athena for backing today's conversation. Athena is one of the fastest growing projects in DeFi with over $7 billion in stablecoin supply and an average 11% APY on SUSD and importantly zero DPEG since launch, which is exactly what you want from a stablecoin. Go check them out by following the link in the description down below.
You mentioned grails one right before. Does that mean that I was talking to Jeff Park?
Um.
Oh, it is. Sorry, before we go to that, I missed a couple of parts of the fund.
Yeah, because but that's why I'm.
Okay.
It's actually linked to that, probably. I was talking to Jeff Park and he, we're talking about uh uh he was Bitwise adviser and then he worked with Pomp and and kind of Bitcoin analyst and we're talking about real estate.
Yeah.
We're talking about real estate in in in New York. Yeah.
And the ones that actually are really worth, are very valuable, are the ones that are $20 million penthouse, right? That those are the one. But the $1 million flat actually doesn't really get value over time.
No.
So similarly, right, talking about NFTs, you talk about the grail.
Yeah.
The the the $5 million punk, alien punk. Well, I have a bunch of punks, maybe two or three, I don't know.
They're not grails. Is this my $1 million flat in New York City? Like, should people only focus on like the top grail NFT or what's the?
No. A, all of this will get rerated. It's still so small. So, the whole space is going to get rerated. Secondly, what you've got is a small apartment in a great block, right? Because in that block is the alien punks and the cowboy punks that have sold for 20 million, $30 million, $20 million, $10 million. So you're living next to the billionaire, billionaire adjacent in the right neighborhood. Okay, that's a pretty good deal.
You know.
I feel better now.
Yeah.
I feel better now. Thank you for making me feel better. When you're if you're if you're searching, if you're trying to make money and not just buying art for art's sake, which is I highly encourage everybody to do, but if you're actually trying to build a portfolio of this, then the issue is is somewhere in the middle tier, there's artists that never get rerated. It's like bands only get so much popularity. Doesn't mean they're not great bands, but that for some reason it just doesn't become bigger. That's the risk is is that the right neighborhood? Is it do the right people want to live there? It's the same thing.
But this would be more for artists or could be the same. Maybe the the board apes don't get rerated.
Yeah, exactly.
Maybe the punks.
That's right.
Some punks don't get rerated for some reason.
Some punks, they will all get. Um, but which ones outperform, I don't know.
Um, but maybe apes is a good example. Maybe I'll never make my money back on my ape that I bought at the all-time highs. Yeah.
Um, okay. Fine. So, maybe that's not how it works.
Yeah.
The other part of what we're doing in the fund, which is interesting, is we're also going to be lending against NFTs. Because you.
Interesting.
You can do lending markets on Gandhi and a few other places and you get great yields like 15% plus against assets that the fund would buy if the lender defaulted. So, you get them at a good price. And then with a yield, we will obviously cover some of the fund's cost, but also reinvest in more emerging artists. So, you're trying to support the entire ecosystem and add liquidity because there's tons of people who are sitting on, you know, an alien punk. Well, there's not tons because there aren't many of them, but an alien punk and they want to borrow, you know, a million bucks because they want to buy a house. Well, that releases liquidity or they want to buy some more art. Just releases the liquidity, let it slush around. So we we're doing all that and then we'll form some sort of club around this as well to get to introduce the investors to the artists themselves so they can start their art journey themselves by buying art directly.
We talked about AI before. Is Bitcoin a proxy for AI as a trade?
Yes and no. I mean, because Bitcoin is going after global savings, but global savings should go up if AI changes economic growth. So therefore, that increases the eventual outcomes for Bitcoin itself. Um, I think that there will be enormous amounts of liquidity from the private sector coming from debt that's going to feed this cycle and that liquidity is debasement of currency over time. So that's good for Bitcoin.
Mhm.
And Bitcoin is a digital store of value and we're creating an increasingly digital world with digital intelligence. So, yeah, it's fine. I think the layer one smart contracts are a better bet on all of this. They just don't feel like it yet to people and the people, the market can only have so much focus at once and we've seen this before in crypto bull runs. It focuses on three things and it can't see the rest and everything pauses for a bit and then it rotates to the next one because the market only has so much attention, so much capital at any one time.
You said everyone is so focused on the crypto cycles when the big picture is so [ __ ] obvious. You would never sell if you don't have to.
Yeah. I str that that was a I mean, I've obviously known this for a long time, but I'm just realizing now with the agents and the fund with all of the things we've talked about, the endless debasement of currency plus the agents plus um everything going on chain. It's like, why would you sell this? This is a massive shift in mindset that I realized I think gets much easier when you start to generate quite a lot of a lot of income, right?
Yeah. Because otherwise you you might have a job, which is the maj m majority of the people, and you make money, but your dreams and hope are in crypto and you but you're like, I want to trade this thing because maybe my income every month is good, but is not enabling me to to have an exceptional life, right? And I will need so much time. But when you start to make more income, this becomes so much easier.
Yeah. Yeah, it it is. And I know people, you know, it's hard for everybody. It's hard. Um, but really, if you if you logically think about it, we know where the world is going. We kind of know where the market cap is going to be over time because it's following Metcalfe's law and that you could just draw the log regression channel. So, what why would you ever sell it?
Yeah. Never sell and buy every month. I mean, at some point you get back to like the very basics after so many years, which is just just just never sell and just buy every month.
So it's the left curve and right curve is here, right? And as I said, I mean, this is humanity's pension plan. This is what this is now because we get to invest in the infrastructure rails of which all the agentic economy will run. We get to do that. It's a pension plan. It'll bail you out of everything that's happening. You just have to do it. Which is why, you know, I first said the economic singularity is coming and you've got at the time six years. And now it's what, four years away. You've got four years to just own as much of this [ __ ] as possible before you go into the biggest moments of uncertainty. But I think blockchain will survive through the other side. Corporations have no idea what's going to happen over time. But blockchains, oh yeah.
Can you prove with actual numbers what we just said that buying and holding and ideally accumulating every month or when crypto market go down massively outperforms trying to trade cycles?
So I I have done the work because I've built an I've been building an indicator for Real Vision to help people with this. And what I basically said is if it's two standard deviations oversold on that log regression channel between one and two, you buy. Um, it compounds at a stupid rate. Now, if you if you sell, how much do you sell at the top of the cycle? Here's the problem. Or how much do you reinvest back in the bottom? That's the hard part. If you let's say you get one, two opportunities to to add every four years, maybe one in the middle cycle, one at the end of the cycle. You got two opportunities. You just save up money between each one of those. Do nothing, do nothing, do nothing. You get that like we've just had. You buy. You go away. You keep saving money. You do that again. Okay? That's doable for most people. Just keep adding to your bet as much as you can. That obviously outperforms everything because you never sell. If you sell at two standard deviations, how much do you sell? Or one standard deviation overbought. Two gives you the least signals, but it's a better quality signal. And this is where the problem is. If you take 25% off, yes, you've got lifestyle chips, but then you've got less money in the casino. If you take 50% off and you say, "Well, I'm going to add that back at the bottom." Good luck doing that.
Good luck.
Because people can't do it. We're seeing it now.
Yeah. It's too difficult.
People can't do it. They're doing it now and they're chasing all the way up. And you you would tend to [ __ ] it up. So on paper, you could be an absolute amazing compound performer if you could buy the bottoms and sell the tops. I've been in the industry for 35 years and I don't know anybody who can do it.
I saw you recently on this traders podcast and I I mean I have a bunch of friends who are traders and we all know all this stuff, but like it was kind of funny because you're saying that on a trader podcast when this guy is literally selling trading to all his audience and the truth is the truth, right?
Well, look, there are, look at how many traders there are and look at how many of them actually made a lot of money consistently over time from trading. M. So, people would say Paul Tudor Jones, Lewis Bacon, Stan Druckenmiller.
Yeah, they also made a lot of money out of asset management fees.
Um, that's where they made a huge amount of money after they got big. But yes, some of those guys, Lewis, Paul, and Stan are all like five standard deviation talent. They just don't exist. Most people don't make money. Why is it that every brokerage firm, their most profitable customers, the people who make the most P&L are dead ones?
Yeah.
I mean, I've seen more and more of these crypto traders who are not, and there's not many who are not like loudmouths and who used to make money trading crypto in 2019, 2020, 2021 saying, "I lost my edge now." And the only money I made, I mean, I made a lot of money, but I lost it all, right? The only, and I still made a lot of money, but it's just because I was buying, I was holding Bitcoin and I was doing nothing with it. And all the money I made actually comes from that. Yes.
Yes. And look, the people who've made the most money out of crypto are the people who don't trade it.
Yeah.
You know, I've used the example of people like Wes Gray or even Dan Morehead. All of these guys have made a fortune by doing precisely [ __ ] all. And yet everybody wants to be the next trader who scalps it. And it's like, I I don't get it. I just don't get it. And then it's all about emotion and it's like angry when it goes down and like overjoyed when it goes up and it's like it's so it's such a waste of energy.
You're saying doing [ __ ] all. Dantiro would say you're being patient, which is very different.
It is. It is actually like you did the thing, you bought the thing and you're being it's not that you need to reframe your mindset, which is.
Uh, and I think it's Port Jones who said, "I want to make money in a trade or long-term trade by staying as long as possible, right?" Which is the same thing.
Yes. And go back to this universal code framework output of intelligence. The intelligence is the trade working out, compounding its capital, all of that. The units of energy. Just think of that. Think of the units of energy use of buying some Bitcoin and doing nothing. That is the most efficient trade you'll ever do in your life. But what we do is the inefficient, which is use vast amounts of our energy, mental energy, emotional energy because we want to trade it. So what you're creating is a system that is by definition less optimal.
Why does more volatility make people think that crypto is easier to trade?
Well, because they're short-term time horizon people. So, more volatility for people who are short-term, and there's people who can make a living from that. It's just very hard. Even Peter Brandt's like, "It's a terrible way to make a living." You know, he's a long-term, you know, been doing it 40 odd years. It's not an easy way to make a living. None of the pit traders from Chicago really enjoyed it because it's hard to pay your bills by timing markets and the emotional, you know, it's not efficient use of your energy in the end versus in a secular bull market, just owning the asset. But yes, people can trade around it and people may want to do it because it makes them feel good burning that energy doing that. They should just.
It makes them feel productive, probably.
Yeah. Go and play with AI and just hold your Bitcoin, you know, do that. Use your productive energy somewhere else.
Yeah.
Because it's not the optimal outcome outcome.
How can people develop patience and conviction when their portfolio is down 60 to 80% and stays down bad for months like we just had now?
Yeah. I don't even care. That's the thing. I don't care. I live off my salaries and income. And if I've got excess capital and it's oversold enough, I'm like, "Great, I could buy some more." Has my thesis changed? Is tomorrow going to be more digital than today? Yes, keep buying. If it's two standard deviations oversold, used to be, "Great, I can actually make more money in the future." But people don't see that. They think the opportunity cost is I've lost money now. I'm like, "No, you can actually make more money in the future because you can compound and add money." People can't see this and so it doesn't bother me. Um, and you know, I've gone through all of these in the past and I know now know what to do, which is just buy the [ __ ] dip.
You [ __ ] idiot.
You [ __ ] idiot. Unless, you know, all suddenly you believe that crypto is never going to come back. It's never going to get used. It's all. This is just so improbable. So they just buy the [ __ ] dip, you idiot. And then again, you know, it's free money.
It's free money. It's people say it's then people start buying the dip too early. I get it. It's not easy. So the discipline is like one or two standard deviations oversold on the log trend.
Do that. If not, do nothing.
Just let the trend play out because it's noise in the middle. And if it goes wildly two standard deviations overbought, you have a massive bull run. Sure, take some money off, go and buy yourself something. If not, you don't need to do anything. You really have to have traded to really. Yeah, you'd have to trade like three times every five years. That's with taking money off or twice every five years just to add to your bets.
Do you think you'll be able to sell some when you're two standard deviation above?
Yeah. Yeah, if I need to, if I want to, if I want to buy something, if I want to take some lifestyle trips. Yeah.
It's hard to do, right? Right now, for example, um, the semis, the SMH and the Nvidia, they're all and Google all gone through their two standard deviations on their log trend, the long-term one. So now you have to ask yourself the really difficult question, which is, okay, they can bump up against it for a long time. We've seen that before, right? But the question is, is was 2022 a new shift in trend because of what is happening where so much capital goes into anything that produces output of intelligence that we're going to change and accelerate the trend? Or you're saying probably.
Probably.
Or.
Or it's a bubble and you should.
Are people always trying to justify what's happening by saying it's a new paradigm shift as usual and you see charts like that at some point.
It lived through two paradigm shifts. One was the internet. Yeah, it had a big correction, but it was real. It was an entire paradigm shift. This one is much bigger. So, if there's any true paradigm shift, the largest in humanity is when we're being replaced by apex intelligence.
There's got to be a probability that this is going to hyper accelerate.
Now, does that make sense? I don't know. When Anthropic is growing at this speed, Google's like forward revenues at 22 times. It's nothing for a company growing at this kind of speed. I mean, what is going on here is insanity. And it's not PE ratios going up, it's [ __ ] earnings going up. Everybody's making a fortune. And everyone's like, it's a Ponzi scheme from one's lending to the other. No, they're all making money from this massive Cambrian explosion of intelligence. And the demand for it, the demand for intelligence is infinite.
Which is perfect for the next question because crypto's been boring now for a couple of months or a year. AI has been AI has been going crazy.
Yeah.
We are at a paradigm shift, but we don't know what's going to affect how it's going to affect the prices of AI.
The charts of AI are like that.
Yeah. But when you see charts like that, you want to form more.
Mhm.
Why should people stay in crypto, both investing and building, when AI is where it's all happening and we seem to have this crazy Ponzi chart and get rich quick overnight possibilities like we had in crypto in 2020 and 2021?
People don't have to stay in crypto. Your job is to be a mercenary for your own capital. You want to make the most money over time. For me, I still think it compounds higher returns than most of these stocks. Not than, you know, some of them that get fully rerated. You know, I've been in a trade, Rocket Lab, which is, you know, a New Zealand US company that sends rockets into space and is one of the only other private companies actually sending rockets with government um contracts. I don't know. It's I don't know how much it's up. It's like since I bought it, 13x or something. Okay. So, there are those opportunities because we're going through this world and people should seek those opportunities. But, you know, can crypto could sue do a 13x from here? Easily.
Could ETH do a 13x? Yeah, why not? Over what time period? I don't know. So it's not it it's always superior to an individual equity, but if you want to buy the NASDAQ or or Bitcoin, when you look at the ratio between the two, put the standard deviation bounds on. Where are we? Two standard deviations oversold.
So um Bitcoin and crypto is as cheap as it has been in its long-term uptrend versus NASDAQ. Okay, that's it. To me, sounds like you should be allocating more to crypto than you are to the NASDAQ. But that's not to say there's not a lot of equity opportunities as well. That's great.
Bitcoin and crypto is as cheap as it has been in its long-term log trend.
People have been struggling with crypto market for a while now. Help us get optimistic or give us some hope for 2026, 2027.
Yeah. So we know that the banks are coming. Stablecoins are big, right? This whole next 24 months is stablecoins. It's going to drive a huge amounts. I do have one. I do have a Cast card just so you can get that because I know they're one of your sponsors. I have um I haven't used it yet, but I don't like spending my crypto. But um.
Stablecoins is big.
Yeah, stablecoins big. It's going to grow massively.
So, we'll see a massive explosion in that.
Um, the Clarity Act, it's going to get signed. That allows pretty much everybody to start building on uh blockchain. So that frees it up. Global liquidity is going to increase. We still got to roll and pay for like $8 trillion of interest payments to come or $6 trillion of interest payments. So we need to print a [ __ ] ton of money to come as well. Um, crypto has is cheap as it as it has been against many asset classes. Um, and it's been in a mega trend. I don't see that stopping. So you've got a cheap entry point with accelerating use case with large amounts of money coming to it, you know, trillions of dollars. I mean, stablecoins are doing like run rate of like a hundred trillion a year. It's crazy. And that all is underlying use case for for chains and it's only going to increase. And then we've got the agents. So I'm like, okay. And and liquidity, they're going to keep debasing because they have to because the interest payments are due. The business cycle is running strong. That means people are going to have more earnings and more earnings get recycled into speculative assets, savings, and other things. So it's like, okay, well, here's the perfect storm. Hunter Horse has been talking about this. A whole bunch of people are like, yeah, Christ, if you want to put a perfect storm of upside here when the market is so miserable about it because it's gone down or side well down and then sideways and is was oversold as it has been by most metrics. We had the fear and greed below 10 for I don't know how long. It was the longest period in history. We had the lowest reading in the history of the index. And we probably going to resolve war in the Middle East permanently, which I think is the potential outcome here. Yeah. I mean, what what else do you want? So that that's the bull case. The bare case is we don't solve war in the Middle East. Um, it then drives much larger inflation than was expected. The tightening cycle comes, the business cycle gets snubbed out. Um, and capital starts getting starved if they have to draw liquidity. That means there's less financing available for the tech companies. That means that rate of intelligence slows down. China would have to be going through the same issue because if not, the US would have to just print money to fund it. So, you know, there's always a bare case to it. I don't see it yet.
What's the probability for that?
I think it's it's probably 70/30, 70 positive, positive 30 negative.
You're an amazing investor and you're an amazing person also.
What do you want from me?
Nothing.
I don't trust you.
I want you to come back on in another continent later this year. Yeah, we didn't said this, just so people. This is we've now done London. That was the first, wasn't it?
Singapore, the first.
Singapore, June.
Dubai, Dubai, Miami.
Yeah.
So, we need to figure out where the next one is.
Pretty good.
Yeah.
I borrowed this question from the Invest Like the Best podcast. What's the kindest thing that anyone has ever done for you?
When I listened to Paul Tudor Jones answer that question, I mentally prepared, thought, you know what is that? And now I don't really know. I can't think what the because everything is made out of kindness. You know, kindness is a real attribute that makes the world go round. It creates positivity from people. It creates opportunity just by being kind. And people do it unexpectedly all the time. And I don't I can't think of a particular moment in time because there's so many moments where people have been kind.
To be honest, I thought the same. I was like, I don't I don't know how I could answer this question. Like, literally.
No. Don't forget he cheated because he knew. He knew in advance. He could prepare everything. And he's got to come with a great thing to show what a great philanthropist he is.
He said, "We're not going to do it at the end. We need the beginning. Let's start with that and they can talk people remember." So then also, you know, you know, being a speculator is not a very nice thing to be able to lead with. But being a philanthropist and I built Robin Hood because this kind black man helped me at a as a kid, you know, is a much softer way of introducing yourself.
Mhm. Thank you so much, Raul, for doing this for a fifth time.
This is me showing you kindness.
I look I look absolutely. I was.
So boring. I'm I'm bored every time. But.
I I look forward to the sixth time already. And I'm sure everyone does too. He has no choice now. He needs.
I don't want to do it. You keep doing this to me. He's not being kind. Everybody.
Thank you so much. That was great.
See you next time.
It worked. It worked.
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