Transcription
I just think Bitcoin right now, you have to watch it. And if we start to trade higher, and I'll give everyone a level. If we trade above 76,000, and at the same time, we see Ethereum above 2400, I believe that is the beginning of a move that will be sustainable this year because I don't think we're going to have a recession. I think inflation is going to stay elevated, and I think people are going to need to find something that is making money in a world where the S&P is not moving anywhere.
What's going on, guys? In today's conversation with Jordi Visser, we go over all of the latest inflation data, what's going on with scarcity trade, abundance trade, how he's thinking about the difference between software stocks and AI stocks, how he's seeing Bitcoin and why it's starting to perform pretty well. And he's going to drop some alpha, some data that he went and he pulled as to when Bitcoin does best and why right now may be a time to start paying attention. All that and much more in my conversation with Jordy Visser.
Jordy, the Iran war seems to have this ceasefire and markets are rallying. Everyone seems to be very excited that this thing is going to be over. I think maybe you have a little bit more tempered expectation. What's going on right now?
>> Uh well, I think rather than get into the focus of the direction, I think every week I say to people this is going to be uh a continuous year of rotation uh just because of how mispositioned people are for artificial intelligence. So if you go back to the end of February just before the war started you know everything that we talked about was hardware semiconductors and commodities on the long side shortages scarcity and then on the short side were the negative news which is really about software private credit and that whole those things haven't bounced at all. In fact, software has made new lows and has been destroyed the last three days. And it's because again of AI progress. So, you know, I I think because of the headlines, people get caught in this thing. Believe it or not, we finished yesterday with the S&P unchanged for the year. And as I've said um repeatedly and will continue to say, there is no recession coming. And that's because the AI demand is massive. At the same time, we're the new news that has happened since before the war that has not changed. There are no more rate cuts built in. Uh we have zero rate cuts by the end of the year. At the same time, we have gas at the pump and diesel up significantly. And even though people are hopeful that these prices will come down because of the ceasefire, I I don't believe they're going to come down and definitely not all the way down. We haven't got into the food side. We've moved uh we've moved to a place where inflation is going to be significantly higher and it could be higher than any time outside believe it or not outside of 2022. We could have headline inflation up at 6% which would be the highest level since I think the early '9s. So people are not in my opinion um focused on the important thing which is that AI progress is accelerating even faster. That disruption that whole supersonic tsunami that both you and I have you know stolen from uh from Elon Musk and from the moonshots crew. I think that's where people should be focused. So it's all about hardware semis and commodities on the long side and it's about software and private credit on the short side. But I don't think that's going to change for the entire year.
>> There are people who are watching this who are going to hear you say two things and they think that they're incompatible with each other. Software is on the short side. AI is on the long side. They think of software and AI as the same thing. Explain the difference.
>> Yeah. And that's an important point because that's why that's why a lot of ETFs and a lot of things on the long side for AI uh most of the baskets are software. um they just are uh every single software name is getting hit. Even this week, Palanteer, which is a name that I've been, you know, talking about, I had to post in X yesterday that even it relative to Microsoft gave up the entire 25% gain that occurred since, you know, midFebruary after the selloff. Every software name's getting hit. So, let's go through what AI is, cuz this gets into the abundance side. Artificial intelligence has made coding free. It has made it ubiquitous. And now you have AI agents doing the coding which means you can go from idea to application or software competitor within a matter of minutes. And I think people have faded the whole software situation. I think a lot of people tried to pick the bottom of it. They haven't uh embraced the viewpoint that I'll continue to say over and over again, which is artificial intelligence is disrupting every single part of any business that comes that's built on code. There's just no way around it. You're just making it cheaper to do. Um all companies that are built on code have human beings and startup businesses can create competitive businesses. And are they as good as Salesforce? No. But that's acting like Salesforce.com. the products they make are perfect. They're not. Um I think what Anthropic has done with the AI agents is make it more challenging when you get to Palunteer, which is not a SAS company, but is something that absolutely I do not believe will be disrupted by AI in the way that the market is judging, but I admit I'm not going to try to sit here and say that it's not valid for it to move the multiple down because maybe 5 years from now there isn't a valid business for Palunteer. And what's happening is it's looking forward and it's saying your multiples are not there. You are up for disruption and so everything built on software is getting repriced. That has implications for the way people are positioned across the globe.
Now one of the things that people have been very excited about is the democratization and access to superhuman intelligence. So when chat GPT comes out etc. And most of those people go and they use it in a very kind of um you know Google replacement type manner. uh Andre Carpathy uh recently came out with this tweet and he basically said there's like two different groups of people using AI right now. There are the people who tried it you know a year or two ago as that Google replacement they saw hallucinations they saw some uh you know some value but they said okay this is just kind of like a better version but I still don't know if I trust it. Then there is on the other extreme people who are uh basically AI uh hypnosis right I think is what he called and these people are using it every day they're using agentic uh technology they're deep into uh the command line interfaces and they're just like all in his point I think was like the truth is somewhere in between on these two how do you compare a group that is saying hey look I use chat GBT every once in a while to get answers but I don't understand why this is such a big deal and then the group of people who thinks that like AI is going to replace every human and people are just going to live in some, you know, utopian world where nobody has to work.
>> Yeah. I don't I don't see it as black and white, but let's let's take what he said because I do agree that the majority of people that I meet are in the first camp. I I think they still use it as a chatbot or a search engine and that's it. Um, I've traveled, you know, a decent amount to or at least done a a lot of institutional Zooms and and I'll just tell you the biggest surprise for me and it shouldn't be, but we're so far further ahead in progress from where we were in October. People haven't done anything with agents yet. It's actually kind of scary to me since it's so easy to use. I know you and I talk about it and we're amazed at what we're able to do, but it's just gotten too easy to use. Um, whenever I hear anyone try to defend Microsoft and I just show them something that I've I I've done in that day, every single day I build something. Uh, I sent you something this morning on Bitcoin. I used all five LLMs, the first one to do the the information and then the other four to check the information and make sure it's fine. But they're all using AI agents to go through this stuff. So I think where um Andre Carpathy maybe is uh a little bit useless for this conversation is he's so far to the extreme right in terms of of an engineer and understanding this stuff that the middle ground is really any single person can be using it to create things. The question is do you have the curiosity of hey I don't want to waste my time with this mindless crap. I have really interesting things to do. And I don't think the majority of people think that way. I think they've been trained in the software and search world to have it at your fingertips. It's kind of a mindless journey to just put something into a chatbot and ask for an answer. It actually takes curiosity. It takes a little bit of entrepreneurship to actually use the agentic side. So I think it's more a reflection of um a bigger bigger problem inside the country which is will people ever use it in that manner based on the way the education system the way that Google search trained people and the way that um honestly software just got people to work to press a button and to think that they'd have to build something themselves is just not something they're interested in doing.
>> Now this whole idea of democratizing access I think people are like hey if I got 20 bucks a month I can go and I can use some of these tools. But now we're starting to see uh a great separation, right? And that separation is mythos uh from anthropic is not actually being given to the public. We're giving it to some cyber security experts. It sounds like maybe JP Morgan has access to it as well. I I read a report on and so it's they're picking and choosing who has access to this like synthetic superhuman intelligence. Does this just become a game of like whoever gets access they pull away from their competitors or are there concerns? How do you just read into we're now starting to pick and choose who has the technology versus just open it up to anyone who's got money?
>> Well, you and I briefly talked about this last week. I wrote a paper about it last week. I I don't think people um I don't think the majority of people are up on the news and I don't think they fully grasp the importance of this particular model. And just so it's clear, um, OpenAI says they have a model coming out which is the same if not better. The main point is the models have reached a point that a bunch of things have entered I guess the world that people need to hear about and this is going to be a bigger story and this is really why the software names got hit so hard this week. So if people didn't know why Salesforce and Palanteer and Adobe and all these names add another leg lower along with the cyber names. The reason is because this model is so good that basically nothing can stop it from hacking. So the reason they brought it to cyber firms, they created a uh a group glass wing to basically give it to all of these groups to say hey let's look at it and figure out how we can stop this from being an issue. So, this is kind of the stage before the d really dangerous stage of true AGI and true ASI. Um, we're at that point where we've talked about when would we get there, we're there. Um, and it's a little dystopian to to to see what's going on. And if you don't believe that the company really has done this, and this is kind of a marketing thing, uh, Scott Bessant uh had a meeting with the banks. I mean he called an urgent meeting with the leaders of the banks because of the hacking risk associated with this. Now I talked about this over the course of the last month when the open claw situation had reached that we were going to have agent swarms and that hacking were going to be a major story and before the end of this year I still believe that we're going to have a situation where cryptography ironically enough is going to be the place that people have to go to to try and defend against this. The reason Palanteer was hit is because basically they're saying, well, Anthropic is the only one that can defend against Anthropic at this point and you need to use Anthropic for your cyber side to go through it. So, you've entered this very strange world, but there's another angle to it which you you kind of brought up, but I just want to make sure people realize the pricing of this will be enormous. Um, people have to realize that on the $20 um, you know, amount, they're not making any money. I mean, the competition for the LLMs is so extreme and the usage is high enough that they're not making any money on this. They have revenues coming in the door, but they're not making any money. So, whenever we see the revenue run rate, what is left out is the margins and the cost, which again, even though Anthropic is seeing their revenues go up, their costs have gone up as as well. And so, if they can't control their margins and they can't control their cost and it gets commoditized and the competition keeps coming, they have an issue. This model and agents in general are using so much compute that the reason the semiconductors are going parabolic, the reason that Jensen Yuang on Lex Friedman talked explicitly about how much compute is needed for this because of the inference explosion. This is a very dangerous situation. I don't think we have enough compute. The only places that are going to have this model are the people are the enterprises that can pay for it. The real question to me is what's going to happen to people like you and I that are using the $200 variety. I've already seen limits hit. I've seen it happen on Perplexity and I've seen it happen on uh on Anthropic and Claude and Claude's gone down as well. So, I think we're running into a problem where the demand numbers because basically people are no longer using it, digital employees are using it and their needs are insatiable. And so this is a this has got major issues associated with it. And just so people realize these companies can't slow down on providing it because they're worried they'll be leapfrog. So Claude is trying to or Anthropic is trying to find a solution for this. So they had to make a deal with Google to get access to their TPUs because remember Dario Modi talked about not overinvesting in compute and with all the data center delays we don't have enough compute. So, we're at that stand that kind of point in time where people have to worry not about there being a bubble, but us not able to provide what we need to and prices going higher, which gets back to the inflationary component.
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Your number one job is to educate yourself and Fountain wants to help educate you. This part I think is very important. So for people who are unaware, Anthropic added supposedly 11 billion in annualized revenue just in the month of March. So they went from 19 billion in annualized revenue to 30 which is almost an unfathomable number for such a young company in the private market etc. But maybe more interestingly is I think it is pretty well accepted in the market that Nvidia's GPU chips are superior to Google's TPU chips. But people are going now to Google and saying I'll strike a deal with you on the inferior technology. And again, they're still great, but they're inferior to Nvidia. I'll strike a deal because I literally do not have another option. You are the best available. And so when you think about that, is that like a okay investor should go look at Google? Broadcom was involved in that deal. Hey, let's look at Broadcom. Is that there's other ramifications? We've seen uh Roundill came out with a memory ETF that they're trying to play on the shortage of memory. Like just talk through maybe a little bit as to how you're thinking about in the market where opportunity could lie for investors.
>> So this gets back to the the point of um so I've done five thematic pieces since November all around inference. uh they've ranged from advanced packaging and semiconductors which I wrote after Nvidia did the deal with Grock with the realization that GPUs were not going to be able to do everything. You've seen Intel go up dramatically. You've seen uh a variety of semiconductor. I mean there's so many I've mentioned on this podcast. Pterodine uh has gone from about 110 to to 300 and change. I did one on optical fibers around Corning. Those names are up violently. You've seen deals with Coherent and Light uh from Nvidia. Nvidia did a deal with Marll, which is a company that I've talked about in at 22V in terms of uh and it's recently gone up 30% in less than 2 weeks. The compute side is right now where we are. We don't have enough compute. The optical fiber side, the reason we need that is because the amount of traffic necessary for this is coming from east to west. It's not about the training side. So we're at a very um unique position. Uh there was an overinvestment in memory only 3 years ago. So there's been an underinvestment and this is the thing people have to realize supply and demand. You highlighted the demand side the revenue numbers which are parabolic for anthropic are around AI demand token demand. For us to satisfy that if you think about it like food or anything else we don't have it. And so that is a sign that we're joining to take anything. Uh if you go through and I know you've had Warren Pis on I think you've had Warren Pis on before. Um okay so he um does a great job of showing the rental rates and everything happening with GPU. There's none available. Meta did a deal with Coree. Um all of this stuff is happening and I think people from an investor standpoint have made a mistake of trying to fade the semiconductor move because they've heard about this bubble talk. everything that was a bubble talk six months ago. We're talking about the opposite. Anthropic is getting their run rate going to where, like you said, it wasn't that long ago they were on a run rate of nine. Now they're on a run rate of 30. And this is all because of what we talked about. Opus 4.5 came and all of a sudden the Agentic world opened up. We are in the very first inning. I don't even think there's one out yet in the Aentic world. It just started. And so for people that are looking for investments, you can't be wrong in looking for this. I will say Nvidia itself is still an important player in this whole thing and their stock is way too cheap relative to the demand numbers that are happening. So it's very hard for the market as a whole to go down even with oil and a war going on because the earnings are growing so fast for all of these companies on the receiver end of the capex. So the capex numbers just keep going. the receivers continue to see their earnings go up and I think that's the world we're in is multiple compression and S&P 500 that goes through the rotation but you want to focus on the hardware and the semiconductor names and anything Dell HPE Corning all of those names they're all related to the same thing there's an underinvestment to massive demand
>> when we look through these different companies that you're talking about you have been very right I think to start the year now and it goes back to this idea of software and AI are very uh kind of separate although people are confusing them together. How do you think about large caps versus small cap companies? I think a lot of folks are used to small caps have explosive opportunities but they also have a lot of downside. You're kind of getting paid for the risk that you're taking in a small cap or medium cap stock. Some of the companies that you're talking about are large cap companies. These are not small businesses and they're growing at very fast rates. And so, are we headed to a world where large companies like we've seen Oracle or or Meta, etc., report some pretty crazy year-over-year growth numbers? Is that the new normal where people can kind of get what they used to get in small caps, but now they can get it from these much more mature businesses, and that's going to kind of become the standard environment?
>> Well, the the large cap stocks have not done well this year. This has been a small cap market. So, with the S&P unchanged for the year, the Russell 2000 is still up. Um, I've talked about my belief that public companies are are just not going to produce returns over the next 10 years. And I'm going to re-emphasize that point. Um, GDP is going to go higher. The spending is going to happen. There's a lot of companies that are either not public or part of the Russell 2000 or are in countries like Brazil, which I'm positive of, which made new highs for the year uh yesterday? I I just you know chemical stocks are not large cap uh you know aside from Dow and DuPont but when you go through most of the chemical names on my chemical list they're small cap a lot of the names I mentioned for the optical fiber side not Corning small cap uh modin which is a thermal name the thermal cooling side this is all about more heat this is all about more components this is all about more nuts and bolts there's a lot of small cap companies uh energy as a sector is smaller is half the market cap of Nvidia. I mean, there's plenty of places for people to go. I actually um don't like the large cap as a general theme unless they're related to hardware. The hyperscalers have not done well this year. Do I think their earnings are are fine? Yeah, but their free cash flows turned negative and so they're betting making a big bet on the future and what is happening to all companies that have a code side or a competitive side from a margin compression. Are you going to have pricing power? And that's the issue that keeps coming through. And right now these companies are making money, but they've got an accounting benefit that came from the one big beautiful bill on this capex side. Their free cash flow is going negative. They've got competitors with Enthropic and OpenAI which are not public companies at this point. SpaceX is coming to the market. I I would not be focused on the large cap companies are thinking that they're going to own this. I've been going a different direction. Uh I believe this is an entrepreneur side. I believe this is a a startup business and I think the private part of the market ironically enough not big private companies but very small tiny private companies are going to have a major advantage here just because of how nimble they are and because they don't have something to lose and probably most importantly human beings are the major cost of the S&P 500. um if the agentic side is speeding up right now and a lot of what I'm going to show this weekend is from people now saying with this new model this new model is very very very bad for labor um all knowledge workers are at risk if you have a model that is autonomous and can break into anything that means they can replicate and self-learn on their own that is the danger now that we've sped up so quickly that you're going to see an impact to the knowledge workers far more than we've seen already
>> let's talk about the economic data that came out this morning you mentioned mentioned a little bit earlier, the inflation number is obviously rising. Uh the PCE number I think gives people a little bit more confidence, but still uh a little concerning. You keep talking about headline CPI going above 5%. Let's put aside for a second uh the headline number is going to go higher. What do you think actual inflation is? And the reason I ask that is like true inflation is showing that it has nearly doubled since the start of the Iran war. So true inflation and CPI are both going higher. But true inflation is showing something that is less than 2%. Call it 1.7 1.8%. And what it begs the question of is this tension between short-term oil short-term inflation type pressures that could become long-term, but right now they're only short-term versus this long-term deflationary component. You mentioned that you think stocks are not going to appreciate a lot over the next decade. And so, how are you thinking about just inflation in general? what wins out, the short-term inflation pressure or the long-term deflationary pressure?
>> So, again, I I I'll say it again. Nobody watching this cares at all about true inflation. Um should there's not uh no, they shouldn't. Um inflation is a feel. It's not a number. Um it's impossible for them to tr truly calculate inflation. So, we've had a difference between inflation for a long time. Um headline inflation. So core inflation is only 2.3%. Headline inflation is now 3.3 and it will be above five just based on what's going to happen with food prices and what's going to happen with gas. Affordability is a major issue. So the reason I say nobody cares about true inflation. I don't see anyone going this is fantastic. Inflation is low again. Wages are falling and the job market is not strong. So wages are down below 4% on almost every measure. uh they're probably going to be sticky around these levels, but if inflation does go above 5%, you're going to have negative wages. Now, again, back the last time we had inflation, that was yolo time. This is a very different time. People spent the money during the first wave of inflation and had a party. They didn't save the money that was handed out. And so what we have now is a situation where affordability is already an issue and gas and food prices are going higher, plastic prices are going higher. Um diesel prices are up faster than any point over the course of the last 25 years. You're going to that means every truck has things, jet fuel, the airline prices are going to go higher. And this is not a question of will it. It will. So all of that stuff is eventually going to feed through. And that means people at home are going to feel this. Now, we haven't had this situation. 3-month rates are now at um 3.66%, 3.65 when when we got on here, and we're going to have headline inflation above it. Um, you know, I I'm I'm very focused on a lot of things, but this negative yield and the fact that wages are going to be this is going to have huge implications for the midterms. Um inflation will be a major major part of the midterm elections. Uh bless you. So don't you know I I think this this situation of hey core is really low. The Fed doesn't have to raise rates. Okay. But the people at home are going to be feeling the pressure because jobs are not safe. And at the same time we've got an affordability issue that isn't going to get better with this.
One of the aspects uh I do not have a strong opinion on how this plays out but I think is very interesting is in more than 50% of the major metros we are now seeing prices come down on homes and I think that it goes back to like two things can be true. Homes are expensive yet they are not continuing to accelerate at this rapid rate. Now, that could change, but I think what you're talking about from like how people feel, it actually isn't so much about the year-over-year rate of change as much as it's just like I remember 5 years ago this was way less expensive and it is just through the roof in comparison. And so, regardless of the year-over-year rate of change, I just feel like everything is expensive. And I think you are right that like that doesn't go away if prices come down 1 or 2%. Right. That that just feels like everything is expensive. Even if it was 5% cheaper, it is still expensive.
>> Yeah. And that and that's that's the issue for people. If you've heard the term core inflation, you were wondering the difference. Um core inflation is supposed to strip out the variable side of commodities. That's why it was put together so that we could deal with, you know, what was happening in the 1970s. It doesn't change the issue. What we know for a fact is when people who are driving gas cars go to the gas station, it is significantly more to fill it up. Now, is it more than it was during 2022? No, it's it's the same. But again, the way people live paycheck to paycheck in the country, any type of increase, especially on something like electricity, like gasoline, phones, uh, I I I mean, I hate to to say it, um if there's scarcity and underinvestment, and that's the commodity world, AI is very inflationary for things related to the physical underinvested world. And that means the phone, it means all of this stuff is going to go up in price. At the same time, we do have labor shortages in things like daycare, uh, teachers, nurses, uh, we're not we we just don't have a situation where all of a sudden daycare prices are going to come down. And we've heard from people, and I hear it from people uh, in in Brooklyn when I'm talking to people, it's daycare expense is a very big expense for people. Uh, they mention it as like kind of the number one thing. They don't know what to do. They're kind of trapped. And so when you mentioned housing prices are coming down, the ironic thing of that is that's not what rents are doing in apartment buildings in the cities in New York. Maybe it's happening in certain parts of the country and maybe more supply is coming on, but for people that are trapped in their apartments or trapped in where they are, I I just don't see how house prices coming down by 30 basis points or 1% changes their life unless they get up and move. And you know what? If you got to get up and move, you're paying for the moving costs and all these other things. It's just not like you're saving any money.
>> Let's talk about Bitcoin. Uh you sent me this great chart that basically shows uh Fed funds rate rising, Fed fund rate falling or or holding and then the positive real versus negative real um uh return here. What is this showing us? What is your takeaway from this? I I see plus 247% which obviously people get excited about.
>> So there's really two things. Um let's go back to the AI side. Uh, I have said repeatedly I think Bitcoin is the only quote unquote thing built on code that is safe from the destruction of AI because it has no competitor. Meaning it's not a business. It doesn't have fundamentals. There's no way to disrupt it. Okay, we're at that agentic side. So the network effects are going to kick in. I want to watch Ethereum as the major kind of signal. And for people watching, I'm giving you not only a bullish sign, but I'm giving you a timing sign. The catalyst is now. Um, and that I'll get to that point, but I want to make sure I give you the structural issue on on what I think is happening. We showed and talked about and everyone saw the chart of how Bitcoin was very correlated to software, which it should be. It at the end of the day is built on code. It's a growth asset. It's something that people think in the future will be worth a lot more money. It obviously has a scarcity side, which let's leave that alone for a second. uh but it is software so it was correlated. Well, this week will be the biggest week of Bitcoin over software. We have finally broken the correlation. Uh and this started last week, but the correlation between software and Bitcoin has broken now. So when we were seeing software puke during the first two months of the year, Bitcoin was going down with it. That's not happening. Bitcoin is starting to trade a little bit more now like a risk asset, meaning it followed the S&P. Software did not follow the S&P. The credit situation, the private credit names, uh, equities have not bounced at all, and you're still getting redemptions there. So, what I put together was just for people to see, and I'll show this on the video, uh, if you break Bitcoin into those four sides. So, you start with threemon real yields. So, 3-month rates are 366. Headline inflation is now 330. So we've taken it down to about 40 basis points. Meaning we have rates 40 basis points above the majority of the returns. Not the majority over 100% of all of the Bitcoin returns since its launch in 2010. But also, if you break it down by 5-year increments, in every 5-year increment, the best time to invest in Bitcoin where you get over 100% of the returns is when the Fed is either on hold or cutting combined with negative real yields. Now, remember the first part of 2010 to 2019, we had QE going on. we had fairly, you know, moderate inflation, but if you have zero yields or three-month bills around zero yields, you're obviously going to get huge returns. So, that's what this is about. But I also said this is from 2019 to 25. This is from 15 to 19 and this is from 10 to 15. It doesn't really matter. It's all the same. uh this is the point that you want to be looking at it because when we get to the next CPI number I think what's rolling off is a 0.1 meaning last year the monthtomonth was about 0.1 we'll be replacing that again with something close to one which means headline CPI will be above uh the 3-month rate as of next month so there's your catalyst we'll be entering the regime if you want to call it of the Fed on hold or easing with inflation up above yields so negative real deals. But one more thing on the technical side, the weekly uh MACD is crossing this week. So when you put it all together, um I've started again. I've I tried to buy when we were up close to 100. I was buying some above 100. Uh I am reducing a little bit of some of my memory names and I'm in taking that money, moving it in. But I'm also moving money out of money markets now, moving it into Bitcoin because I think we've hit a point where uh you're going to start to see a break in correlation and I think people are going to start to focus on it as a scarcity asset.
And just one more thing, one of the conversations that is starting to build rapidly. Uh and I'm not going to go through all of the details, but maybe you and I can get Marco Papage on uh soon to talk about something he mentioned on a podcast he did. But you have to start to think about the US position with the dollar. Um obviously this war did not work out the way that I think the administration thought. Whatever is happening with the straight of hormuz one thing is certain the rest of the world did not come to the US side in this uh and in particular now what's going on in Taiwan uh with elections over there and who's starting to visit China. There's a growing fear that maybe the US dollar will be under pressure more as the end result of this with higher inflation, higher energy prices to go an unstable situation in the Middle East, this taxation thing which is you know the Iran is seems to be uh as part of their program is taxing people using the strait. This is a very weird situation but I think in the end uh you're going to have it. And one final point, I'm concerned about inflation happening in emerging markets at a much bigger rate than happens in the US. And if that's happening, I think you're going to have some countries of the world in particular that are going to be looking for ways to hedge against inflation. Remember, at the end of the day, if inflation is going higher in certain parts of the world and we have an unstable environment, I think the attractiveness in Bitcoin from devaluations in certain countries uh is going to grow as the thing. I think you're going to have more and more people talking about Bitcoin over the course of the next 3 to 6 months.
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I do think that a lot of people get confused when it's like Bitcoin can go up because of inflation. Bitcoin can also be valuable if there's deflation from AI. And one of the things that's helped me is understanding like there's different people who buy Bitcoin for different reasons. Some investors are very focused on global liquidity. other investors are very focused on digital disruption and two things can be true at the same time. Can you elaborate a little bit on how you think about those different groups and why it seems like Bitcoin can win in two different environments?
>> Well, the common thread between them, and I say this all the time, the one thing I know with all human beings on the planet, no matter where they live, which is the same, they all have um some form of greed. Uh I think in the face of people hiding their money or protecting against devaluation that may not sound like greed to people but it is if you can put your money in something that's keeping its value then everything else is going down in value. So it's a reverse side of greed but I think more and more people have to think about devaluing currencies in a world where okay we need that. On the flip side, I think in the US in particular and really around the globe, the acceptance of Bitcoin, and I asked you about this, you know, a few episodes ago, just to talk about the difference, the way people perceive Bitcoin from the institutional side today from where it was 3 years ago or even six years ago when you would get thrown out of offices immediately when you walked in to talk about it. Well, just like Bitcoin has matured, so is Anthony Pompiano. He's older. He's more mature. He's more involved in the business world. He's got a tie on every day. There's no hoodies. There's no anything. So, you've actually uh gone with Bitcoin at the exact same time. I just think we're at a different stance. And when we get through it, the reason I have my stepfather with an allocation in it, and I've told him, I just don't think growth assets are where you want to be ever again because of AI. People still need to make returns, particularly if they're going to live longer from AI. And that gets back into the longevity side. And you need to produce returns over the course of the next decade. What'll happen is when Bitcoin does trade higher, and this is the thing people should go, I've believed this. I still believe it. We are now in a vacuum where there are almost no assets built on code that are going higher. Almost none. Not the hyperscalers, not the software names. The only names going higher are semiconductor names, which quote unquote are cyclical, meaning at some point we'll have enough compute. I don't think it's going to happen for a while, but at some point we will. At some point we'll come up with efficiency gains. at some point we'll come up with cures for everything related to energy and everything related to commodities. We'll have humanoids. The only thing that I can say with certainty is people are still going to need to in their mind make more money in the course of the next 5 years. And I think once Bitcoin trades higher this time, this is the move that to me is about AI disruption. It is the reverse of what's happening to software. So I always let the market tell me. I can sit here with you guys and say that I made X right and I made X wrong. So, I've been right on most of the commodity names, the power names, the semi-names, and now I've been wrong on Palunteer. I've been wrong on Bitcoin. I still think those two are going to do well. But when Bitcoin breaks away from software, you have to pay attention. That is the thing I've learned about is let the market tell me when something different is going on, the world is absolutely more unstable than it was February 27th. There is no question about that. We have less certainty. We're going to have energy hoarding around the globe. We need to figure out ways to solve the problem and not be dependent on the rest of the world. I just think Bitcoin right now you have to watch it and if we start to trade higher and I'll give everyone a level. If we trade above 76,000 and at the same time we see Ethereum above 2400 I believe that is the beginning of a move that will be sustainable this year because I don't think we're going to have a recession. I think inflation is going to stay elevated and I think people are going to need to find something that is making money in a world where the S&P is not moving anywhere.
>> Bitcoin's volatility used to be 80 90 volt. uh a couple years ago it is now compressed to like 3540ish. Um Bitcoin drew down 50% instead of drawing down you know 85%. Uh I think there's some people who say well if volatility got cut in half and the bare market got cut in half then that kind of makes sense in terms of
the draw down. What I'm maybe more interested in is, usually, those bare markets were 18 months, maybe, you know, 12 plus months. If you look at, you know, 2021, we peaked in November. 2022, November was the bottom of the capitulation. So, kind of a full 12 months. We are now about 6 months from the peak of Bitcoin, give or take a couple of weeks. Should we think of these bare markets as also from a timeline being shorter as well? If you get compression of volatility, do timelines kind of accelerate?
>> Yes and no. Um, again, I, I, I mean, I hate to bring this back to software, but when you have a chart that is a direct overlay for five years, meaning the movement in software was the same as the movement in Bitcoin, I, I, I think what we're going to have is rather than call them bare markets and just like get in this, I'm never been a big fan of this bare market, bull market thing, especially when we're at all-time highs. Like at some point in there, it just seems like, okay, they go up and then the normal course is at some point, uh, people don't invest as much as they have.
I do think people have given up on Bitcoin in terms of the people I listen to on most podcasts. It's very hard. People are just so frustrated to to go through. Um, there's a psychological part that takes time. I do think when you're at a 30 or four V, that is a big difference from 80 or 90. So, you are talking about a world that time compresses as well. Uh, I think when things move, they're going to move faster than they've ever moved. That's what we've seen with software. When they fall, they don't fall a little bit, they fall 10 to 20%. I mean, it goes very, very quickly. And so, I think that is a trapdoor feeling. There's just, I just don't think in a world of uncertainty around AI, people know what to do. And so, it doesn't take much.
We're getting into earnings, which we haven't talked about. Those are going to start next week. When we start getting into the software companies, one of the most dangerous things is, I think people are like, well, when we get into the earnings, then finally software will be done. When stocks don't go up on good news, which is what's happened with, um, the software names, cuz their earnings have been good. The question is, when they show any signs of AI showing up in their numbers, that means they're going to get pummeled. If somehow or another they can actually go up on bad news, then that would mean that we've hit kind of a, you know, a static point. I just don't think that's going to happen because I think people still, you know, and and again, most people that have software in their ETFs, they're out there saying this is an overreaction. I think there's too many people that are hoping that this is an overreaction. I don't think it is.
The IRGC is reportedly, you know, the Iran, uh, reportedly asking to get paid a toll of $1 per barrel of oil. It goes through the straight, and they want to get paid in Bitcoin, according to the Financial Times. I do not know if that's true or not, but if it is true, what are the ramifications?
Again, I think it's just another sign that in this world that we're going into, uh, the dollar is not being thought of in the same way that it was, and people don't want to be, uh, connected to the dollar. It doesn't have the same meaning that it did. You can't separate, okay, I'm going to make a speech and say NATO's done. You can't say that when Taiwan is dependent on the US protecting them against China, and then you have a leader in Taiwan that's running and is going to visit China. Part of that reason is the fact that, hey, people of the world, forget the politicians who are just doing things, that is a representation of how the politics of the world are changing, that people don't see the US the same way they did. And whether or not, you know, people watching this want to hear that, that's just the reality of the way the masses are thinking.
And I think the Bitcoin sign shows two things. One, it is a representation of the dollar. I think if the dollar is weakening, which would absolutely be the case if inflation's at higher levels and you have most countries around the world raising rates, and at the same time the dollar is is is falling. If the dollar is falling, I think it's a representation of Bitcoin being accepted again as this neutral place rather than a reserve currency status. I just think it's being viewed as a neutral situation. In the same way, they also said they would take payment in yuan. So, it's not like they're exclusively saying Bitcoin. Again, I think it's just a representation of how do we not get trapped in this situation of the US can do whatever it wants, and are we going to be thought of as a group? And I, I, I just think it's changed over the course of the last six weeks.
Is there anything that you are looking at, um, that would change your mind in terms of your current view of the scarcity with AI, Bitcoin? Like, is there a a data point, a development, uh, government announcement, anything that you think would be the the trigger point where you would say, "Hey, you know, I, I think I need to evolve here."
>> Yep. 100%. Simplest thing I can possibly say: if I start running into people that are using AI every day, I'll start to change my view.
I think the biggest problem is from a sentiment basis, and the simplest thing I can say: nobody who talks about artificial intelligence has an intelligent thing to say about it if they're not using it every day. To use it every day, just, I mean, think about your situation. It changes so much on a daily basis. I'm blown away every day on something I'm able to do with it. And I say that with just honesty. I, I don't think your kids, if you're watching, can possibly be prepared for the world without using it every single day. And the schools don't want them to use it still at this point. So, if you're not using it, if you're trapped at a company that doesn't allow you to use it, that's not an excuse.
So, I think this is one of those unique situations where, as I say, I always give credit to my father for this: investing is not a game of being right. It's about trying to find situations where the riskreward are positive in your favor and you believe you're going to make a lot of money relative to the risk. Well, the number one driver of the odds on that are how crowded the situation is on your viewpoint. And if people aren't using AI every day, they really, I, I mean, they make sure that the odds are in the favor of people buying semiconductors, buying energy, buying all this stuff, because remember, it was only 6 months ago that people were absolutely publishing that this was a bubble and they would never ever ever be able to build this much. So, I just don't think that this is going to be a situation where unless that changes, the odds are going to remain in the favor.
So, for everyone listening, just remember, um, Anthony asked a good question. The earnings are in your favor. All the stuff is in there. The thing that's not in your favor is that people don't use AI. So, I don't think they have any idea about what Mythos is at this point.
>> And when you're talking about use AI, just before all the trolls in the comments, you're not talking about using it as a chatbot. You're talking about using it agentically, CLIs, and the actual like underlying technology, not the chat bots. Correct. Building stuff, any anything that you want to build.
Again, if you want to play fantasy football, I mean, we, we'll get into a point somewhere in the summertime what I think people should be doing if this is something, and I know a lot of people spend time on this. I don't at all anymore. Uh, but if I was going to basically be in a fantasy football league, I would already be out there doing all the work on all the analytics and connecting it using Perplexity computer, getting an API key for whatever data sources you have, and connecting it to it and say, "Let's go through and figure out our draft for this year based on last year's data and then incorporate the new news that comes in just to show that you're building something in there."
And when I use the, when I say the the word nobody's using it, out of a hundred people that I run into in conversations, and again, I'm in a very, very, um, finite world for the most part in conversations, I'm talking to institutional investors, which for the most part went to the best schools in the country. They were for the most part the best students in the country. Uh, they're not using Claude in the way that I would expect. So, if I start to see that change, and again, there's been an uptick for sure, but the uptick is about using it in some way which is they're making it more software like, uh, I think this is about building stuff, and until people get there, I just, again, I don't think enough people are using it to change the odds on the equation, and that's why I say I think we're still in the first inning of the agent world.
>> I know you've been, uh, cooking up a great video for Sunday. You, you got too many unique insights this week. So, what, what's the video on Sunday going to be about?
>> Uh, a lot of it is going to be showing people, um, where the inflation data was before we got into the war and the likelihood that it's going to be higher, the changes that have happened since the war. I'm going to reiterate the physical upgrade, the the scarcity side, and go through. Uh, I'll show people again my model portfolio, and a lot of the subscribers that have gone on have been great. Uh, I'm continuing to up things on there.
My goal was two things: help people feel empowered by their ability to move their money into investments that they can make money on for traders to be able to find positions, uh, in names that are going to go higher, to make sure they focus their attention on commodities extensively and support the video on the weekend.
And even though some of the people can't afford to the subscriber, and I run into those people all the time in terms of, uh, chatting with them, the main reality is you're going to get a lot from the weekly videos if it's just staying up to speed on things. Uh, you don't have to pay for the subscriber list, but for the subscriber list, you are getting thematic ideas, you're getting the names, you're getting the list, you're getting technical updates, and anything new that happens on the commodity, the semi side, the optical fiber side, or anything that pops out. I will cover some of the biotech side this week in terms of pharmaceuticals. There's just a variety of information that I'm trying to get out to people.
>> I'm, uh, I'm excited to watch. I watch every Sunday. And anyone who watches this, you should go say thank you to Jordy. You should go to his YouTube channel. Go to Jordy Visser YouTube on Google and, uh, hit the subscribe button. That's like the thank you. You send him like a digital, you know, kiss every Sunday morning. So, he gets very excited. Um, look, look at his reaction. See?
>> Yeah. And for people who want to go, if you've never seen the subscriber side, since, uh, the one thing I haven't done well is create a website yet for Visser Labs that directs people to all the places that I am, cuz I am everywhere all the time. Uh, if you go to 22viarch.com, um, that's where my subscriber stuff is. 22vira.com.
>> Amazing, Jordy. Thank you. We'll do it again next Friday, Saturday.
>> Thanks, bud. I'll be back in New York next week.
>> Thanks, Jordy. We'll do next Saturday.