Bitcoin Is The Best Hedge Fund That’s Ever Existed

[0:00] You don't find Bitcoin, Bitcoin finds
[0:01] you. You don't find Bitcoin until you're
[0:04] either personally or your business has
[0:06] been so destructed that you can't get
[0:09] out of a hole that you're looking for
[0:11] something to park your money while you
[0:13] figure out a plan. In his case, [music]
[0:15] Bitcoin went higher, it allowed him to
[0:17] do what he's done with strategy, but
[0:18] that's why most people think this is a
[0:20] scam. In my opinion,
[0:22] >> What's going on, guys? Today's
[0:23] conversation with Jordi Visser is a
[0:24] great one. We talk about the slide down
[0:26] in AI stocks, what happened with Ken
[0:28] Griffin and Leopold and the entire book.
[0:30] Then we go into what happened in Korea
[0:32] and Japan and all the liquidations that
[0:34] have happened there. We talk about Kevin
[0:36] Warsh and the Federal Reserve and all
[0:37] the interest rate decisions. And then of
[0:39] course, we talk about crypto, Bitcoin,
[0:41] Ethereum, much more. Today's
[0:43] conversation with Jordi Visser is full
[0:44] of insights I think you'll find very
[0:45] valuable. So here's my latest
[0:47] conversation with Jordi.
[0:48] All right, Jordi, there's a huge week,
[0:50] we got a lot to talk through. Let's
[0:51] start with the unwind in AI stocks, uh
[0:54] Leopold and situational awareness. They
[0:56] basically are forced to sell uh their
[0:59] entire book, it sounds like. Um you've
[1:01] lived through a couple of these unwinds.
[1:03] What are your takeaways given what's
[1:05] transpired over the last week or so?
[1:09] >> Well, I guess there's um
[1:12] there's two parts to this. And yeah, I I
[1:13] was in Brazil
[1:15] uh in 1997 and 1998 into '99.
[1:20] And I was uh
[1:22] I was a part of the LTCM
[1:25] uh unwind. I was a part of the true
[1:28] unwind, meaning I came back to the US in
[1:30] the beginning of '99 and I took over the
[1:32] S&P book.
[1:34] And
[1:37] later on in 2007,
[1:40] uh I was managing a portfo- a macro
[1:42] portfolio
[1:43] uh during the quant unwind, which was
[1:46] really a garp unwind, which was during
[1:49] the great financial crisis, but very
[1:51] early. And then I would even say
[1:53] Archegos or Archegos or whatever the
[1:56] name he had for his thing that blew up
[1:58] in 2021.
[1:59] I've been through a bunch of these and
[2:01] uh
[2:02] here's the most important thing and I
[2:04] don't think I've seen this in in the
[2:06] news yet in terms of the way it's
[2:07] written.
[2:09] So, the one interesting thing about
[2:10] leverage in the hedge fund world is
[2:13] eventually when you get to the end,
[2:15] meaning where you've had a drawdown and
[2:17] that is so significant,
[2:20] you have to try and find buyers for your
[2:23] portfolio or it needs to be liquidated.
[2:26] And that happened in all three of those
[2:28] scenarios. And once that starts to
[2:30] happen,
[2:31] where you start needing to either call
[2:33] people up or your prime brokers know
[2:35] everything and they're calling people,
[2:36] which is normally what happens cuz the
[2:38] prime brokers at the investment banks
[2:39] are the lenders of these and once
[2:42] they're involved,
[2:43] everyone starts to see the portfolio,
[2:45] they look at their own risk and say,
[2:47] "Where am I exposed?" And they start
[2:49] hedging. So, the one thing I want to
[2:50] want to make sure people know, um
[2:53] this was a cleansing event in my
[2:54] opinion. Uh it doesn't mean that we're
[2:57] not going to see continued volatility,
[2:59] but what he went through
[3:02] is a situation where you start losing
[3:05] money mainly because of the reasons I
[3:07] talked about the AI mid-cycle slowdown,
[3:09] which is
[3:10] when things become too crowded and
[3:13] everyone has the same positions. And
[3:14] especially when you're dealing with
[3:16] someone who got all of this fame from
[3:17] making so much money and you could see
[3:19] his positions reported in 13F holdings
[3:22] and he hasn't been through this before
[3:24] and he believes in the fundamentals,
[3:26] stock prices diverge from fundamentals
[3:29] all the time. We saw that with
[3:30] Liberation Day last year. You can have
[3:32] the stock market fall 20% and nothing
[3:34] change economically, nothing change
[3:35] earnings-wise, and it can snap back just
[3:38] as fast. So, the AI trade to me, um
[3:41] started getting narratives about
[3:43] Anthropic's in trouble, uh
[3:45] the hyperscalers are in trouble, uh
[3:47] we're never going to get the revenues,
[3:49] uh open source, all of these things.
[3:51] Every week it was a new thing that we
[3:53] had to talk about when the reality is
[3:55] for the month of July we saw a record
[3:57] factor unwind.
[3:58] It took down
[4:00] Leopold to a level that he needed to get
[4:03] out of his portfolio. What we don't know
[4:05] all the true story about is
[4:08] when did Citadel find out? When did
[4:12] Millennium find out? I bring this up
[4:14] because these were the names that were
[4:16] reported in the paper and once they see
[4:18] things they have exposure to this as
[4:20] well. So there was a four-day move
[4:22] beginning on Friday of last week.
[4:26] Uh into this week with the final part
[4:29] being in in the 2 hours after the Fed.
[4:33] And to me that was basically an enormous
[4:37] amount of people that were not only
[4:39] liquidating his portfolio but making
[4:42] sure that they were reducing their risk
[4:45] and then using his positions to allow
[4:47] them to be in a better position coming
[4:48] out of this. So for everyone who's
[4:50] watching this who's wondering, well,
[4:52] what's going on? This is markets.
[4:54] And as I've talked about one of my
[4:56] themes is more bubbles, more parabolas,
[5:00] and more speed crashes and we just lived
[5:02] through {quote} {unquote}
[5:04] a mini bubble
[5:05] that you could see through a parabola
[5:07] and now we've had a speed crash and
[5:10] remember, no matter how fast markets go
[5:12] up in a bubble, they look like you're
[5:15] going upstairs during it and then you
[5:17] fall down the elevator shoot on the way
[5:18] down and I think that's what happened
[5:20] >> and over the course of this month.
[5:22] Do you think that Citadel knew he was in
[5:24] trouble and so this like surprise Fed
[5:27] hike story, was that like a potentially
[5:30] intentional way to put him in a bad
[5:33] position or is that just the internet
[5:35] putting on the tin foil hat and trying
[5:36] to draw a good story?
[5:40] >> We'll never know.
[5:41] Um
[5:43] it helped the case. Um you know,
[5:46] I I did a
[5:47] mid mid-week video this week where I
[5:50] went through number one, the the the
[5:54] losses that happened before these four
[5:56] days. So, Leopold's losses, they were
[5:58] not caused by him either being reached
[6:00] out to by Ken Griffin or reaching out to
[6:02] these places or through the prime
[6:04] brokers.
[6:05] Um
[6:06] the losses were happening because there
[6:09] was going to be a correction and things
[6:10] don't go straight up. Uh I think what he
[6:13] got caught into is the losses were
[6:15] compounding so fast and so many people
[6:18] had on the same trades that it reached a
[6:21] point where he needed to find something
[6:23] or he could be out of business. And I
[6:25] think whether it was the hyperscaler
[6:28] earnings reports, whether it was the
[6:30] fears that the Fed were going to raise
[6:32] rates. I will say this, there's a lot of
[6:34] press that Citadel came out and said
[6:36] they'd raise rates. There were other
[6:37] people that thought they would raise
[6:38] rates. The probability was close to 40%.
[6:41] Um so, it's not like they caused this
[6:44] and I don't think we'll ever know
[6:45] whether that's the case, but I do think
[6:47] when you have someone that is uh
[6:48] suffering and heading towards
[6:51] a catastrophe, uh it seems like he was
[6:54] able to get out of this with significant
[6:56] gains still on the year and be able to
[6:58] cleanse his book. But, the reality is
[7:00] we'll never know the answer to your
[7:01] question.
[7:03] >> When um
[7:05] when you look at his performance, it's
[7:06] now rumored that he was up like 400%
[7:10] um and through the month of June, uh he
[7:12] had like $25 billion
[7:14] in the hedge fund that he started I
[7:16] don't know, two, three years ago. Um it
[7:18] is objectively one of the
[7:21] um kind of craziest runs I think someone
[7:23] has had in starting a hedge fund uh over
[7:25] the last couple of decades. Being down
[7:28] 80%, 70%, you know, whatever the number
[7:31] actually is, still means he may have
[7:33] like $10 billion
[7:34] sitting in the fund. So, if you were um
[7:38] a potential LP or maybe somebody who was
[7:40] evaluating whether you'd go work there,
[7:42] does put him in like a negative light
[7:44] and people say, "Hey, you know, he's
[7:46] he's a failed hedge fund manager.
[7:47] Everyone's going to run away." Or are
[7:49] people going to be like, "Look, now we
[7:51] got a guy who's obviously skilled, he's
[7:52] got a chip on his shoulder, just got a
[7:54] great reminder about risk mitigation,
[7:55] and so maybe now's actually the most
[7:57] attractive time, and he may, you know,
[7:59] go put up really good numbers."
[8:01] >> I I I think um that whole conversation
[8:05] is uh
[8:07] I I've learned throughout my years of
[8:09] people being able to raise money. If you
[8:12] produce returns, people will give you
[8:13] money. Um out of the 10 billion, I mean,
[8:17] it's being reported that about 5 billion
[8:19] of that is private
[8:21] an anthropic position. Um so I I don't
[8:23] know how much money he raised. I don't
[8:25] know what went on. I'm sure he did take
[8:27] in money. I think it's very hard to come
[8:29] back from a scenario where you're 25
[8:32] years old and you're talking about
[8:34] you've just had a learning experience,
[8:36] which is what was reported in the the
[8:39] letter that he sent out. Um I think it's
[8:41] going to be really hard for large people
[8:44] to give him money um on this. I'm sure
[8:46] there were people that were using his
[8:48] knowledge as well
[8:50] uh for what to invest in. So
[8:53] I Th- This is a different thing, and I
[8:55] don't know how much we've talked about
[8:56] it, but you know, the market structure
[8:58] is changing, and
[9:02] we've met, you and I, uh
[9:04] around the nexus of AI and crypto.
[9:08] I like to spend my time on AI. I'll keep
[9:10] saying over and over again for anyone
[9:12] who wants to go to my my YouTube and
[9:15] watch that
[9:17] compute demand will be outstripping
[9:19] supply for a long time.
[9:21] And along that journey, unfortunately,
[9:24] we're going to see a lot of what we've
[9:25] seen this year. So let's go back and
[9:27] recap.
[9:28] We saw a collapse in software stocks at
[9:30] the beginning of the year.
[9:32] It spread into other sectors. Everyone
[9:34] was worried that the terminal value of
[9:36] companies, you couldn't value them 3
[9:38] years from now.
[9:40] That's a fact.
[9:41] Hedge fund leverage was at all-time
[9:43] highs to begin the year, and according
[9:45] to data in the papers, Goldman Sachs
[9:48] said it was the largest increase in
[9:49] gross exposure that they had seen in any
[9:52] 5-month period in history.
[9:54] If all of that is true, and I believe it
[9:56] is, hedge fund leverage was going up at
[9:59] a time when terminal value, or being
[10:02] able to value a company in 3 years, is
[10:04] going down.
[10:06] I think what we saw with Leopold, and
[10:07] what we're going to see with the entire
[10:09] market,
[10:10] is a structural change. AI agents are
[10:12] getting more involved in
[10:13] decision-making. There's more optimized
[10:15] portfolios, because it's very easy to go
[10:18] in and do that. Robinhood just put out
[10:19] another agentic tool this week that
[10:22] allows people sitting at home to
[10:23] immediately get technical indicators
[10:26] immediately from AI agents.
[10:29] The game is speeding up, and so
[10:31] innovation's changing. We're going
[10:34] through a period where everything is
[10:36] speeding up dramatically, and what used
[10:38] to take 30 years is now taking 3 years.
[10:40] And that means that for the entire
[10:42] financial markets, but in particular
[10:43] hedge funds that borrow money,
[10:46] generally have quarterly liquidity, and
[10:49] they're making investments in things at
[10:51] sizes on leverage that they couldn't get
[10:53] out of in a short amount of time if they
[10:54] wanted to, and positions are getting
[10:56] more crowded than ever, which is why
[10:57] we've seen the largest momentum unwind
[10:59] in history. The market structure is
[11:01] changing, and I don't think leverage is
[11:04] ever going to go back to the highs. So,
[11:06] in the same way that I've said
[11:07] repeatedly, which has been the case this
[11:09] year,
[11:10] earnings growth in the S&P 500
[11:13] is above 20%. The S&P is not on pace to
[11:16] be up over 20% for the year. We've seen
[11:18] multiple compressions so far.
[11:21] I think we're going to see the same
[11:22] thing in leverage. So, my belief is that
[11:24] for public equities and for hedge funds,
[11:26] there's going to be a
[11:27] a scenario where
[11:29] speed crashes are going to happen more
[11:31] often. We're going to see more events
[11:33] like Leopold. It's going to force people
[11:35] and prime brokers to not extend as much
[11:37] leverage as they used to. So, not only
[11:39] are indices going to see multiple
[11:41] compression, but you're going to see
[11:42] more and more of these extreme cases
[11:44] within side uh hedge funds.
[11:46] >> Let's talk about uh Korea and Japan. I'm
[11:48] going to read you a couple of
[11:49] statistics. So, uh South Korea's stock
[11:52] market collapsed 45% in about 40 days
[11:55] and erased $2 trillion in market cap.
[11:58] Then, in South Korea, there was about
[12:00] 1.2 million leveraged retail trading
[12:03] accounts that got triggered on margin
[12:05] calls as of July uh mid-July or so. And
[12:09] then if you go and you look in uh Japan,
[12:11] there's about $200 billion that was
[12:13] wiped out uh in the Japanese stock
[12:15] market um in a single day when it
[12:18] dropped, you know, nearly 3%. And so,
[12:20] when I see that,
[12:23] my initial take is that, "Hey, we live
[12:24] in this interconnected world and if the
[12:26] US is seeing, you know, drawbacks,
[12:28] um obviously other markets are likely
[12:30] they are, too." But, when I read the
[12:32] statistics around South Korea and the
[12:35] leveraged retail trading accounts, that
[12:38] feels like it is very unique to that
[12:40] geography versus the United States. How
[12:42] do you read the impact that, you know,
[12:44] the Asian markets can have on the US?
[12:48] >> Well, first of all, um
[12:50] Korea's up 56% year to date.
[12:54] So, in the same way that Leopold um
[12:59] had a huge drawdown needed to be bailed
[13:01] out, according to the data we have,
[13:04] he's still up 80% year to date, I
[13:07] believe, based on what I saw today. Um
[13:10] the Korean market, you just named how
[13:12] big the correction is, but their
[13:14] market's up 56% year to date. The S&P
[13:17] 500 is up about 8% year to date.
[13:20] I I just think that um AI is allowing
[13:24] people, because of the speed, to jump
[13:26] into things and trends because
[13:28] fundamentally
[13:30] I mean
[13:31] where Samsung, where SK Hynix, where
[13:34] Micron are trading
[13:36] I mean they're trading at multiples that
[13:38] mean people are already building in the
[13:40] end of this cycle at some point because
[13:42] they're cyclical companies and so I
[13:44] think people were buying these because
[13:46] they had a math behind it. Um, again,
[13:49] for everyone who's who's watching this
[13:51] who has more of a trad-fi mentality and
[13:54] and less about Bitcoin
[13:56] I believe the market is going through
[13:58] over the course of the next five years
[14:01] AI will destroy all public companies.
[14:04] And when I say destroy, it will destroy
[14:06] the growth certainty of all companies
[14:08] going forward and that's why multiples
[14:10] should come down. It's not that
[14:12] companies will go out of business, it's
[14:13] that you won't be able to know whether
[14:15] you have a company that will survive
[14:17] because it will be eaten away by AI
[14:19] native startup businesses that have much
[14:22] more margins in their business and are
[14:23] able to compete on everything that you
[14:25] do. It will take time to get there. The
[14:28] physical constraints allow Micron and
[14:30] Samsung and SK Hynix to be able to have
[14:34] again, scarcity and that's why the
[14:36] Korean market was in there, but I do
[14:37] think the mentality of margins is very
[14:39] different in the Korean market than it
[14:42] is in the US market, but remember too
[14:45] the US market has gone through a secular
[14:49] bull market where from 2007
[14:52] the S&P has produced over 15% a year
[14:55] while the rest of the world has only
[14:57] seen equities break out above their 2007
[15:00] levels as a whole
[15:02] over the course of the last three years.
[15:04] That's the difference, Anthony, is that
[15:06] you're getting people that are getting a
[15:08] taste of a bull market they haven't seen
[15:10] in a long time. On the US, people have
[15:13] been involved in this they don't need
[15:14] the leverage as much because the
[15:16] household net worth in the country is
[15:17] over 180 trillion dollars.
[15:20] >> Now, speaking of leverage, um people may
[15:23] think of it a little bit differently,
[15:24] but the large hyperscalers, they are
[15:26] dipping into their free cash flow. Uh
[15:29] they've been taking on some debt.
[15:31] Um they are not speculating necessarily
[15:33] on day-to-day, you know, stock prices,
[15:34] but they are making a big bet uh they're
[15:36] going to see an ROI from uh from the
[15:38] CapEx investment. Um Door Dash had a
[15:41] great uh piece this week that um I know
[15:43] you've got some thoughts on. What was
[15:44] your takeaway from his piece?
[15:47] >> Um his piece I I'm going to cover a lot
[15:50] over the weekend. I thought it was great
[15:52] and it it kind of took a uh
[15:55] a contrarian bend in one side and it got
[15:57] into this thing of
[16:00] there really being concentrated winners
[16:02] and you can make this case for both
[16:05] Anthropic and OpenAI, but you can also
[16:06] make it for the hyperscalers. Um I don't
[16:09] think this is going to happen,
[16:11] but his argument [clears throat] really
[16:12] got into the fact against something that
[16:14] people have talked about, which I happen
[16:16] to agree with. So, his argument was that
[16:19] in the case of Anthropic and OpenAI,
[16:21] they're actually going to control even
[16:24] more
[16:25] of AI than people realize because
[16:28] they're going to be the only ones that
[16:29] are going to be able to have the compute
[16:32] and offer it out to people and that the
[16:34] most valuable things are going to want
[16:38] tokens per watt. And this is the thing
[16:41] that gets really efficient. If we never
[16:42] get to the point or if it takes us a
[16:44] long time to get to the point where
[16:47] compute lines up on the supply side with
[16:50] demand, we're going to have a problem
[16:52] and the analogy that I'm using in over
[16:55] the weekend is what happens to
[16:58] the way people think about buying a car
[17:00] if gas at the pump is a dollar versus at
[17:02] $10 a gallon. So, at a dollar per
[17:04] gallon, people don't mind buying gas
[17:06] guzzlers. They're cheaper than more
[17:09] expensive cars, but if it's $10 a gallon
[17:11] and now a car is 50% more for an
[17:14] efficient car that gets 40 miles to the
[17:16] gallon as opposed to 10-mi to the
[17:18] gallon, more people are going to go for
[17:20] that efficient car because it makes more
[17:22] sense. And that's what's going to
[17:24] happen, and the company that I just want
[17:26] to use as an example is Disney.
[17:29] How much is the compute available? If
[17:31] there was only a finite of night of
[17:34] a finite amount of compute that
[17:36] Anthropic could offer to
[17:38] all of the companies in the world, and
[17:40] let's assume, just to make it simple, it
[17:42] was a number, and they had 100 gigawatts
[17:45] worth of compute. And Disney came in and
[17:48] said, "I want all of that compute, and
[17:50] I'm willing to pay you a trillion
[17:52] dollars for that compute."
[17:54] And everyone else is only willing to pay
[17:56] 100 billion dollars, and Anthropic goes,
[17:58] "Fine, you get that compute, and no one
[17:59] else gets compute."
[18:02] The reason Disney would be wanting to do
[18:04] that is because the most token-hungry
[18:07] scenario is video. So, let's assume they
[18:09] wanted to make a movie that instead of
[18:11] costing 3 billion dollars would cost 50
[18:13] million.
[18:15] But, they can go out and sell it at the
[18:16] prices that will bring in revenues. So,
[18:19] their revenues per token,
[18:21] they're willing to pay more money for
[18:23] because they have the distribution.
[18:25] This is what his argument is, is that
[18:28] because the supply of compute is just
[18:31] nonexistent, and every day the
[18:33] capabilities are getting better,
[18:36] people are going to want that. Now, the
[18:37] argument on the other side for why the
[18:39] hyperscalers are at risk and all of this
[18:41] stuff is the fact that people believe
[18:43] that you'll never be able to get the
[18:44] revenues in. But,
[18:46] if you can sell something at a price
[18:49] because there isn't the deflation, if
[18:51] Disney can sell movie tickets at $20 a
[18:55] seat,
[18:56] and no one else can
[18:58] underprice that, and now they have this.
[19:00] Well, this is why Micron is having
[19:02] margins now at levels that we've never
[19:03] seen in memory because they have
[19:05] scarcity of it. Compute scarcity is a
[19:08] reality, and I don't care what anyone
[19:10] says all the CDS on the hyperscalers and
[19:13] all of this, we just went through
[19:15] Amazon, Microsoft, and Google now.
[19:18] And the total sum of their backlog of
[19:21] contracted orders is nearing 2 trillion.
[19:24] If you add in Oracle, you're over 2
[19:27] trillion. And they all said the same
[19:28] thing on their calls, which I'm going to
[19:30] go through.
[19:31] We have
[19:33] orders to match up with our CapEx. So,
[19:36] they didn't cut CapEx, they overall
[19:37] raised CapEx.
[19:39] Basically, assuming it was in line with
[19:41] all the price changes. I just think that
[19:43] when you read the Dwarkesh article, he's
[19:45] making a very contrarian spin, which
[19:47] Gavin Baker echoed as well, which is
[19:50] if there's a finite amount of compute,
[19:52] the company that is able to deliver the
[19:54] most efficient models, which is what
[19:57] Anthropic and Open AR, they're going to
[19:59] take the big orders from everyone
[20:01] because they've also been the ones smart
[20:03] enough to secure the compute available.
[20:05] This goes against the open-source story,
[20:07] it goes against everything. And I happen
[20:09] to believe that it's going to show up in
[20:11] the ARR numbers for Anthropic and Open
[20:13] AI until that's not the case, and I
[20:15] don't know when the compute supply is
[20:17] going to get close to demand because
[20:18] demand just is accelerating.
[20:23] >> So, let's say that he is right on this.
[20:26] Then, you go and you look at um
[20:29] Microsoft
[20:30] XAI or SpaceXAI.
[20:33] Um you look at
[20:35] uh Meta,
[20:36] Google.
[20:37] I mean, these people have enormous
[20:39] access to compute.
[20:42] Why are some of them opening up their
[20:44] compute to others? Do they just not need
[20:45] as much as they've actually built? And
[20:47] then also, does that mean if they have a
[20:50] more access to compute than Anthropic or
[20:53] Open AI does,
[20:54] actually, you know, Open AI and
[20:56] Anthropic are at a disadvantage compared
[20:58] to these large guys who can catch up?
[21:01] >> Well, let let's go through the
[21:02] difference between um who's who's
[21:05] offering up their compute and who's
[21:07] gobbling up the compute. Open AI and
[21:09] Anthropic are not offering out compute.
[21:11] They are the gobblers. They are the ones
[21:13] eating everything.
[21:14] Um
[21:15] XAI or SpaceX is offering compute
[21:18] because he doesn't need it right now.
[21:19] He's going to need it eventually for his
[21:22] humanoids and full self-driving and
[21:24] everything else that he's going to have.
[21:26] On the other side with Meta, Meta cares
[21:29] about personal agents and he cares about
[21:31] the fact that the agents that they're
[21:33] going to need, the demand is much
[21:34] bigger. Sam Altman gave an interview
[21:36] with Patrick O'Shaughnessy on Invest
[21:38] Like the Best. He specifically talked
[21:40] again about something that I show in my
[21:41] videos every single weekend, which is we
[21:44] are still in the I mean, we're not even
[21:46] out of the first out in the first inning
[21:49] of the agentic needs for inference. All
[21:51] we're doing so far are the coding
[21:53] agents. The personal agents we haven't
[21:55] got to. Until people can speak into
[21:59] a pin, their phone, something with an AI
[22:03] model that is able to talk back like
[22:06] Siri, do things
[22:08] that we want it to do. Siri doesn't work
[22:10] yet. Alexa doesn't work yet.
[22:12] If you're in a bad um cell spot, you
[22:15] can't actually use
[22:17] uh your Open AI on your phone in a way
[22:20] that allows you to go through it. It
[22:21] needs to be on the phone.
[22:23] That means the hardware needs the
[22:24] memory. We're in this situation where
[22:26] again, I can't I can't say it loud
[22:27] enough to people, we just don't have the
[22:29] hardware and the capabilities to get the
[22:32] AI to everything that we need. So, the
[22:34] demand is going. There are ways
[22:37] for sure that supply will catch up with
[22:40] demand.
[22:42] But, that is not even close to what's
[22:44] happening. So, there will be algorithmic
[22:46] efficiency impacts and Sam Altman talks
[22:48] about all of these in the interview with
[22:50] Patrick O'Shaughnessy, but he literally
[22:52] says, "We underestimated the amount of
[22:55] supply." And this is Open AI, which has
[22:58] arguably been the most aggressive
[22:59] spender of this and because they
[23:03] underestimated it, think about
[23:05] Anthropic. Anthropic underestimated big
[23:07] time. Dario Modi was warning everyone
[23:09] about the ROIC last year that you're
[23:12] taking a huge bet. He was betting that
[23:14] OpenAI was going crazy and now you know
[23:16] what Dario's thinking? Oh my god, I wish
[23:18] I would have more. Luckily for him,
[23:21] SpaceX and Meta have built so much that
[23:24] in the case of SpaceX, SpaceX not only
[23:27] sold it to
[23:29] Anthropic,
[23:30] they also sold capacity to Google.
[23:33] Google's a major cloud provider that
[23:35] doesn't have enough capacity and their
[23:37] Gemini, they haven't made a major model
[23:40] and they were one of the leaders on
[23:41] this. So everyone underestimated the
[23:43] amount of supply of compute that was
[23:45] necessary and this comes while every
[23:48] investor who's worried, who sends me an
[23:50] email,
[23:51] is telling me that we've overbuilt, that
[23:54] we're not getting the revenues in when
[23:56] every single smart person that's
[23:58] involved with building this stuff and
[24:00] seeing the demand is saying they can't
[24:02] keep up with it.
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[25:39] >> It's funny because it's almost like
[25:41] Elon's too good at building, you know,
[25:43] and
[25:44] compute. He's too good at building
[25:46] energy. That's why he's been able to
[25:48] outbuild what he needs, whereas
[25:50] everybody else, maybe they misjudged how
[25:51] much they would need, but also, you
[25:53] know, if you put Elon up next to Google
[25:57] and said go, you both have to build, you
[25:59] know, 100 megawatts or you know,
[26:00] whatever, who would get it done faster?
[26:03] I think Elon, you know, beats almost
[26:04] every single person in the world.
[26:06] >> Well, this is one of the things that to
[26:08] me, if there's one takeaway from this
[26:10] week that people should have, go back
[26:12] and read Leopold's 2027 situational
[26:15] awareness paper.
[26:17] He's been spot-on
[26:18] about where things would be.
[26:20] He talked about AGI being here by 2027,
[26:23] the government getting more involved
[26:25] with the company. All of these things
[26:26] are actually happening. If anything,
[26:28] they're happening slightly faster than
[26:30] he expected. I think with this whole
[26:33] thing proves, with the excess capacity
[26:35] of xAI, with the excess capacity of
[26:38] Meta, with Sam Altman saying he
[26:40] underestimated, with Dario Amodei is
[26:43] scrambling to find compute from
[26:44] anywhere,
[26:46] the smartest people involved with AI all
[26:48] underestimated one thing.
[26:51] And this is the human being side.
[26:54] The danger with what happened with Dario
[26:57] Modai, if you go back and listen to his
[26:59] arguments last year about what Sam was
[27:01] doing,
[27:02] his argument was we're not seeing the
[27:04] adoption at the pace that we expected.
[27:07] And that had to do with human beings and
[27:08] enterprises. What surprised everyone was
[27:11] the enterprises picking up the pace. The
[27:14] reason this is important for everyone to
[27:16] matter, and this gets heavily into
[27:18] what's going to happen over the next 12
[27:19] months with crypto.
[27:21] Everyone underestimates how quickly that
[27:24] the agentic world
[27:26] brings humans with it.
[27:29] Agentic movement happens fast. The
[27:33] thing people can't comprehend is what it
[27:35] means to have AI agents doing
[27:37] everything. That's what's happening
[27:39] within inside enterprises for workflows
[27:41] is the agents are figuring out how to do
[27:44] this. Once we get into the point where
[27:47] you use Leopold and you say, "Hey, if
[27:50] you wanted to compare something with
[27:51] Leopold and you had to find, you said
[27:53] the fastest or the best hedge fund from
[27:55] the start, arguably Bitcoin is the best
[27:58] hedge fund ever.
[28:00] Its returns look like Leopold's. We have
[28:03] corrections. Leopold gave up what, 70,
[28:05] 80% of his gains? Well, Bitcoin at the
[28:07] very early start gave up 70, 80% of its
[28:10] gains, has continued to compound. Why
[28:13] did you have trouble getting all of the
[28:15] famous people, investors that you
[28:17] mentioned over the course last decade to
[28:18] invest in Bitcoin where they threw you
[28:21] out of their office. All of these
[28:22] stories that you have,
[28:24] it was because they knew better. These
[28:26] types of returns don't happen. In the
[28:28] hedge fund world, if you walk in and
[28:29] you're Leopold and you show I'm making
[28:31] this much money, "Okay, great. I'll give
[28:33] you tons of money." We saw this happen
[28:35] with Melvin Capital. We saw this happen
[28:36] with everything. It's about your past
[28:38] performance, which is not indicative of
[28:40] future returns. What AI agents are going
[28:43] to look like, they're not going to look
[28:45] look at this and say, "I don't believe
[28:46] in Bitcoin." They're going to look at
[28:48] the returns and go, okay, let me
[28:50] discount this. Let me put some
[28:51] probability that it's a it's a new
[28:53] asset. I won't give it all of my money,
[28:56] but what I will do is put 5%, 10%, 15%,
[28:58] 20%. And those people that have 0% once
[29:02] agents start making decisions for them,
[29:03] the same thing that we've seen with the
[29:04] adoption here, the adoption of crypto
[29:07] will go through the roof when AI agents
[29:08] are more involved in transactions and
[29:10] more involved in investing.
[29:12] >> Kevin Warsh
[29:14] he he stole the show by doing nothing.
[29:17] I think everyone was pontificating which
[29:19] actually about Citadel saying there's a
[29:21] surprise rate hike. I think with the
[29:23] cooling inflation, there's just a lot of
[29:24] moving parts here. And so they decided
[29:26] to just kick can down the road. Agree or
[29:28] disagree with their decision.
[29:31] >> Uh well, I agree with their decision. Um
[29:34] I actually like what Kevin Warsh is
[29:37] doing. Um
[29:39] I I believe using old academic models is
[29:42] going to be a problem. This is one of
[29:44] the reasons why the hedge fund leverage
[29:46] situation is going to come down. There's
[29:48] a reason why and I'm going to show some
[29:50] charts which are going to show people
[29:52] how structurally the stock market has
[29:54] completely changed. For those of you who
[29:56] who care about factor risk, I will go
[29:59] through a lot of charts on factor
[30:02] volatility, on S&P volatility, on Nasdaq
[30:04] volatility, comparing them all on single
[30:06] name volatility versus index volatility.
[30:09] The market's changing and the market's
[30:11] changing because of AI. Kevin Warsh is
[30:13] saying the Fed needs to change because
[30:15] of AI. If you're using the prior three
[30:19] months of data in a world that is now
[30:21] every month is equivalent to three
[30:23] months or 30 months,
[30:25] if everything is 10 times what it used
[30:28] to be in terms of the speed,
[30:31] how can you use inflation data from
[30:33] yesterday to make decisions other than
[30:35] from the psychological basis of dealing
[30:37] with humans? Well, in the case of what
[30:39] the market reacted, we got a steepening
[30:41] of the yield curve when he basically
[30:43] said,
[30:44] "Well, we didn't really need to do
[30:45] anything because
[30:47] you guys wanted a tightening and the
[30:48] market has tightened for us. 10-year
[30:50] rates have gone up, 2-year rates have
[30:51] gone up. So, really the market already
[30:53] did did it for us while inflation came
[30:55] back down a little bit. So, we got time
[30:57] to wait for inflation and see where it
[30:59] is."
[30:59] I think this new no forward guidance
[31:02] going into the meeting, people had a 40%
[31:04] chance of a tightening, where in the
[31:06] past there'd have to be an article
[31:09] released beforehand to be a tightening.
[31:11] I think this is going to add more
[31:13] volatility into the system and more
[31:14] uncertainty. So, it gets back to the
[31:16] point I made about leverage. If the Fed
[31:18] was also contributing to the leverage in
[31:20] the system through QE, meaning whenever
[31:22] assets fell, they would grow their
[31:24] balance sheet, he wants to shrink his
[31:26] balance sheet. Well, that means he wants
[31:28] the Fed to be less levered. All of this
[31:30] leads to the same conclusion, which is
[31:34] there's going to be less leverage in the
[31:35] system. And as tokenization comes, which
[31:38] I believe he and Bessant have both
[31:40] talked about,
[31:42] tokenization will release money supply
[31:45] in a way
[31:46] that will allow the Fed to delever at
[31:48] the same time. That's what I believe is
[31:49] going to happen is that AI agents and
[31:52] tokenization will allow dormant assets,
[31:54] which are just sitting there but have a
[31:56] value,
[31:57] to be monetized in a way in daily
[32:00] liquidity and in transactions through
[32:01] pieces of them in fractionalization. And
[32:04] I think once that happens, the Fed won't
[32:06] be needed as much and I think him and
[32:08] Bessant both believe this as people that
[32:09] believe in crypto and Bitcoin.
[32:12] >> Do you think it's a good idea for the
[32:13] Fed to get delevered?
[32:16] >> Yeah, I I well, I think it's going to
[32:18] happen and I do. I think it's going to
[32:19] help the distribution of wealth problem.
[32:21] So, I I think um the K-shaped economy
[32:24] has been formed because of the leverage
[32:25] of the balance sheet. I think since the
[32:27] great financial crisis to to avoid a
[32:29] great depression, they had to use their
[32:31] balance sheet whenever there was a
[32:32] problem. We have a financialized stock
[32:34] market. But right now, it doesn't seem
[32:36] like we need those tools the way we did
[32:38] in the past. One is there's not as much
[32:40] leverage and the leverage that is
[32:41] growing where CDS is going wider is on
[32:44] the best balance sheets in the world,
[32:46] the hyperscalers. That's why I'm not
[32:47] worried about them. Their CDS should be
[32:49] going higher because clearly the markets
[32:51] are having a trouble having trouble
[32:53] providing the capital on a short-term
[32:55] basis that's come to the market. I think
[32:57] one thing people need to recognize is
[32:59] that SpaceX comes to the market. Plus
[33:01] there's a lot of lockup that's coming in
[33:03] that's going to hit the market. You've
[33:04] got Anthropic, you've got OpenAI, you've
[33:06] got all of them raising money for CapEx
[33:08] for these things. We're tapping the
[33:10] market in big size. Google did an $80
[33:12] billion
[33:13] These things have never happened before.
[33:15] It takes a while for this kind of
[33:17] capital coming to the market to be
[33:18] digested and I think that's what we've
[33:20] seen in AI as all this has gone on. So I
[33:22] think the Fed balance sheet will help
[33:23] the K-shaped economy. I think you have
[33:25] to look at this the way Kevin Warsh
[33:27] does. He's not saying he's going to
[33:28] shrink the balance sheet in the next
[33:29] year.
[33:30] He's saying opportunistically when he
[33:32] can, he wants this stuff to come down.
[33:35] But it would also happen with rates
[33:36] coming down. So I think when he's
[33:38] comfortable on inflation and when the
[33:40] labor market is soft enough, I think
[33:43] you're going to see rate cuts combined
[33:45] with the balance sheet being run down a
[33:47] little bit.
[33:49] >> When we look at
[33:50] um the impact that this would have on
[33:53] uh stock market, on Bitcoin, on gold,
[33:56] many of these different assets,
[33:57] um
[33:58] is that something that investors should
[33:59] be excited about? Or is this a situation
[34:02] where if you want to help Main Street,
[34:04] you know, Wall Street suffers? You want
[34:05] to help Wall Street, Main Street
[34:07] suffers.
[34:09] >> So again, I'm going to go back to what I
[34:10] said. I think over the course of the
[34:12] next 5 years, the most important force
[34:14] that's going to happen is AI. So let's
[34:17] just assume that everyone starts with
[34:19] one number.
[34:21] And just assume this number is true that
[34:22] the total
[34:24] household net worth of the planet Earth
[34:28] is about $700 trillion
[34:29] and the total value of crypto is about 3
[34:32] trillion.
[34:33] So we've all heard, and this is the way
[34:35] I value crypto. What I think will happen
[34:37] over time is that that total value will
[34:40] either stay the same overall. So it's
[34:43] let's say 703 trillion. 700 trillion in
[34:46] non-crypto, 3 trillion in crypto.
[34:49] Let's assume in 5 years it's still 703
[34:52] trillion.
[34:53] What I believe will be happening is that
[34:55] the money will be redistributed. Now
[34:57] some of that will go into crypto.
[34:59] Um in terms of this. The main point is
[35:02] I believe small businesses win in AI. So
[35:06] let's assume the winners of the the
[35:08] stock market, the companies that win the
[35:10] revenues, they're all AI native.
[35:14] Well, the AI native businesses grow
[35:15] bigger, but a lot of these AI native
[35:17] businesses are like my business, like
[35:20] Cursor, like Anthropic, like OpenAI.
[35:24] Meaning they're AI native businesses
[35:27] with very few employees. They own the
[35:28] majority of their business. Not in the
[35:31] case maybe of OpenAI and Anthropic, but
[35:33] of most private companies, the founders
[35:36] are going to own most of their business.
[35:37] And let's assume it only goes to
[35:40] a $100 million business. Well, in the
[35:41] past that $100 million business
[35:44] needed to go to 5 billion, and I don't
[35:45] think that's going to be the case
[35:46] anymore. And the founder is going to own
[35:47] 75%. So crypto's going to end up being
[35:51] say $100 trillion in a decade.
[35:54] The rest of the assets of the world will
[35:56] still be 603 trillion, and will still be
[35:59] around the same overall number. There'll
[36:01] be a transfer, and then within the 600
[36:03] trillion, I think the public stock
[36:05] markets
[36:06] will be effectively unchanged, and
[36:09] private businesses will grow in their
[36:11] valuations, and you'll be able to access
[36:13] these through ETFs that are tokenized
[36:16] that give you every asset in the world.
[36:19] And that's what the future is going to
[36:20] look like. And as someone who ran ETFs
[36:22] at Morgan Stanley back in the late or
[36:25] for early 2000s,
[36:26] I can just tell you that nobody believed
[36:28] in ETFs back in 2000. Now, it's an
[36:31] accepted thing that dominates the
[36:33] market. Tokenization is a massive change
[36:36] to the structure of the market. AI
[36:38] agents are a massive change, and all of
[36:40] this stuff is coming. It's a certainty.
[36:41] It's not an not even an if. It's not a
[36:44] when anymore. It's happening, and it's
[36:46] happening this
[36:47] >> Based on all of your experience and
[36:49] seeing these different technology trends
[36:51] or different that kind of asset
[36:52] structures go from not popular or
[36:55] contrarian to consensus and popular. Uh
[36:58] let's say that you were 25 years old
[37:01] just starting your career. What would
[37:03] you do in able to benefit from this
[37:06] trend? Whether you were starting a
[37:07] business or going and looking for a job,
[37:09] like how would you position yourself
[37:11] given everything you've seen in the past
[37:13] to
[37:14] um get the tokenization trend as the
[37:17] maybe a tailwind?
[37:18] >> Well, ETFs
[37:20] the changing of products or structures
[37:22] didn't impact in my opinion the overall
[37:25] situation. It hurt business It hurt
[37:27] mutual funds. Um it obviously changed
[37:30] stock ownership, meaning BlackRock has
[37:32] been a big winner, but it's not like
[37:35] they've gone parabolic. I I think the
[37:38] way to have made money since ETFs came
[37:40] out
[37:42] really was about
[37:44] innovation and which companies were
[37:46] going to dominate. You're basically
[37:48] betting on where moats will be. Um
[37:51] Warren Buffett made money on investing
[37:53] in moats. Um the Mag 7
[37:57] have moats. Now, their stock prices
[38:00] have not moved over the last year for
[38:02] the hyperscalers. We're seeing multiple
[38:04] compression, but right now I'm trying to
[38:06] invest in scarcity because I think we're
[38:09] at the phase of innovation where we
[38:11] can't actually produce
[38:13] the energy necessary. So, we're
[38:15] converting, as David Friedberg said in
[38:17] the podcast this past weekend, we're
[38:20] con- converting molecules into bits, and
[38:23] I want to be involved in the molecule
[38:25] side right now. And that's why I focus
[38:27] my attention on scarcity. So, scarcity's
[38:30] not just Bitcoin. Scarcity is Micron.
[38:32] Scar- Scarcity is um
[38:35] GE Vernova. Scarcity is all of these
[38:37] things that are necessary to build out
[38:39] the compute that are still going to have
[38:41] the earnings growing. Their multiples
[38:43] can compress, and this is the thing
[38:45] people have to understand. Just because
[38:47] you're making money,
[38:49] I believe in multiple compression
[38:50] because even for these companies that
[38:52] are based on scarcity, in 3 years, when
[38:55] humanoids are a reality, and they're
[38:59] making it cheaper for every physical
[39:01] business, meaning they're involved in
[39:03] building buildings and being involved in
[39:06] in the uh the
[39:09] uh the semiconductors,
[39:11] including all of the intelligence at the
[39:13] level. I think all businesses and ideas
[39:15] will be disrupted, and that means you
[39:17] have to get into the only thing that
[39:18] gets hurt the least. And that's the
[39:19] thing that I want to make sure people
[39:20] realize. If you don't believe in
[39:22] Bitcoin, you have to go back at some
[39:24] point uh and go listen to the Michael
[39:27] Saylor interviews in 2021 about why why
[39:31] he did this. He did this because of two
[39:34] forces that were hurting him. One was
[39:37] competitive innovation. His business had
[39:39] a billion dollars on the on the balance
[39:41] sheet, but he could not compete with the
[39:43] size of Microsoft and the bus- the the
[39:46] competition was just not there. And this
[39:47] was after the Mag 7 had come to
[39:49] existence. He talks about it all the
[39:51] time. So, one was he lost to innovation.
[39:54] Number two,
[39:56] he was now losing to the basement from
[39:58] the government. They had moved rates
[39:59] down to zero. So, he had a successful
[40:01] business with a billion dollars of
[40:03] balance sheet, but with very, very
[40:05] difficult in terms of making money. So,
[40:07] he made a decision to invest in
[40:09] something that was
[40:11] going to be defendable versus
[40:13] debasement. I think where Bitcoin comes
[40:15] in is the same the quote that he uses
[40:17] all the
[40:17] You don't find Bitcoin, Bitcoin finds
[40:19] you. You don't find Bitcoin until you're
[40:22] either personally or your business has
[40:24] been so destructed that you can't get
[40:27] out of a hole that you're looking for
[40:29] something to park your money while you
[40:31] figure out a plan. In his case, Bitcoin
[40:33] went higher and allowed him to do what
[40:35] he's done with strategy, but that's why
[40:36] most people think this is a scam. In my
[40:39] opinion,
[40:40] 5 years from now, almost every business
[40:42] will be in strategy MicroStrategy
[40:44] situation where they will be competing
[40:46] against the basement and they will be
[40:48] competing against the pressures of
[40:50] competitive companies, but these will be
[40:52] AI native businesses of which there will
[40:54] be hundreds of millions if not billions
[40:57] of them because one person with an AI
[41:00] agent can set up 100 businesses. It
[41:03] That's the problem is that the scale of
[41:05] competition goes through the roof and so
[41:07] the investment gets into where will
[41:09] people put a store of value where my
[41:11] money is going to be worth more than it
[41:13] is today 3 years from now? That's
[41:15] getting harder and harder every year
[41:16] that we go forward.
[41:18] >> Other than Bitcoin, what else falls in
[41:20] that category for you?
[41:23] >> I I I Again, I don't know what can be
[41:25] worth more in 3 years from now. In my in
[41:28] my store of value view, I I mean, I
[41:30] would guess I would select gold just
[41:32] because as much as Bitcoin would be
[41:35] there, it's a store of value.
[41:37] Uh I I think the hardest thing for
[41:39] people's going to be if the deflationary
[41:41] pressures of AI get to the point that we
[41:43] all believe I mean, I know that you and
[41:45] I believe that that it will. At some
[41:47] point, the deflationary pressures
[41:50] destroy all businesses and all assets
[41:52] because there's no need for the assets
[41:53] to be worth the value that they are if
[41:55] everything is heading towards free.
[41:58] And that's the issue that comes up. I I
[42:00] think Bitcoin right now because of the
[42:02] the size of it relative to those 700
[42:05] trillion,
[42:06] it really is more of a hedge against
[42:09] what I'm saying happening than something
[42:11] that people need to believe in. At some
[42:13] point, diversification, even at 5%, is
[42:17] you saying, "I want to have
[42:18] diversification in real estate and
[42:20] private equity and private credit and
[42:21] private public equities." In all of
[42:23] these different things, I think crypto
[42:25] needs to be 5%, and 3 years from now, I
[42:28] don't know if Ethereum is safe on that.
[42:30] I don't know if Solana is safe on that.
[42:31] I don't know if Sui is. I don't know if
[42:32] BitTensor is. I don't know because the
[42:34] ideas are going to keep coming faster
[42:36] and faster from AI. So, I want to have
[42:38] something that has is not built on
[42:40] ideas. It on beliefs of people believing
[42:43] that it's a store value. That gets into
[42:44] gold and that gets into Bitcoin.
[42:47] >> You previously have talked about
[42:49] Ethereum, and that seems to be
[42:51] outperforming Bitcoin. What's going on
[42:54] there?
[42:55] >> Again, I This is a big part of why I'm
[42:57] I'm
[42:58] I'm adding uh
[43:00] at least two times a month a
[43:02] crypto-focused
[43:05] YouTube. And the reason is because I
[43:07] believe the ecosystem is growing.
[43:08] Despite all the
[43:10] fears and worries over the Clarity Act.
[43:13] Despite everything going on,
[43:16] the ecosystem of my 40-name index is
[43:20] based on the energy that's happening
[43:21] inside the ecosystem. And that gets back
[43:23] into AI agents. That gets back into the
[43:25] amount of volumes and transactions. I
[43:27] like looking for a variety of signals
[43:29] that are,
[43:31] you know, creating a mosaic that this is
[43:33] happening. Part of them is Ethereum over
[43:35] Bitcoin. It's saying that the ecosystem,
[43:37] the network effects are kicking in. Part
[43:39] of this is how my 40-name basket is
[43:41] doing, which is outperforming Bitcoin at
[43:43] this point. So, it's not just Ethereum,
[43:45] it's the eight verticals or sectors
[43:47] within inside crypto that are equal
[43:49] weight that are outperforming Bitcoin.
[43:50] You've got Stripe heavily involved in
[43:52] looking to make takeovers of companies
[43:55] involved with transactions and volumes.
[43:57] So, for me, that is a signal that,
[44:00] despite all the doom and gloom,
[44:02] that we AI is finally starting to kick
[44:04] into the agentic side. It should match
[44:07] up with meta.
[44:09] It should match up with Siri. It should
[44:11] match up with Alexa, meaning once
[44:13] consumer agents become real,
[44:16] the explosion in volume and transactions
[44:19] should go through the roof, and that's
[44:20] where the financial guardrails matter.
[44:22] So, think of Ethereum for me as
[44:25] the asset that most traditional finance
[44:28] people that have a lot of money already
[44:31] know.
[44:32] And so, it's the safest of the Solanas,
[44:34] the Suis, wherever you want to go at
[44:36] this point from the money that matters
[44:39] that will drive assets, which is the
[44:40] $700 trillion. They
[44:43] They chose Bitcoin. That is the store of
[44:45] value, but the energy side for, "Hey, I
[44:47] think stablecoins are going to be used
[44:48] all around the globe, and I think
[44:49] there's going to be more adoption, and I
[44:50] think consumer agents are coming. I
[44:52] think Ethereum's going to benefit the
[44:53] most."
[44:56] >> When
[44:57] you mentioned BitTensor, that seems to
[44:59] be the thing that is most AI crypto
[45:02] overlap. Have you spent time on that?
[45:05] >> Not enough. Um one of the things I'm
[45:07] doing as part of being ready, and the
[45:09] reason I keep saying September, early
[45:11] October,
[45:12] is because I have to be able to answer
[45:14] these questions in a way. I'm never
[45:16] going to be a bottoms-up person all over
[45:18] things, but I need to understand
[45:21] how all of the AI agent parts of crypto
[45:26] fit in. How they fit into what should
[45:29] happen. So, I've spent a decent amount
[45:31] of time, but not enough that I want to
[45:33] start having conversations about it
[45:34] because part of being
[45:37] I I spent a lot of time on deep dives. I
[45:39] mean,
[45:40] we won't talk about this, I'm sure, this
[45:42] week, and I don't know if you've seen
[45:43] it, but Ezra Klein had an interview with
[45:46] uh Kevin Rudd, who's the former Prime
[45:47] Minister of Australia.
[45:49] Kevin Rudd is Kevin Rudd is kind of
[45:52] world-renowned at this point for
[45:55] his knowledge of Xi Jinping.
[45:57] And because China and their open-source
[45:59] plan is so important to investors,
[46:02] I know China really well. I traveled
[46:04] there for a month a year. So, one month
[46:07] out of every year from 2007 to 2012, I
[46:10] was in China.
[46:11] And I got to understand the culture. I
[46:13] got to understand things from a
[46:14] grassroots roots perspective. And you
[46:18] really start to realize that most of
[46:19] what you hear in the Western media is
[46:20] not true. And you want to understand
[46:22] more. Well, Kevin Rudd in this interview
[46:24] with Ezra Klein really went through what
[46:26] their AI plan is. How they're thinking
[46:28] about things.
[46:29] And a lot of it gets into the K-shaped
[46:31] economy of the Western world. A lot of
[46:33] it gets into their beliefs on on Lenin
[46:36] and Marx and what we're seeing and they
[46:39] believe that socialism is going to rise
[46:40] here because of the K-shaped economy.
[46:43] So, he talked a lot about this and where
[46:45] it fits in. And the reason I bring this
[46:47] up to your BitTensor question,
[46:49] I need to do research on things before I
[46:51] want to talk about them. I connect dots
[46:53] really well. Um things that I knew in
[46:55] the past all of a sudden pop up. And in
[46:58] the case of this China thing, listening
[46:59] to Ezra Klein interview Kevin Rudd, I
[47:01] had a greater appreciation for the plan
[47:03] that China has in place. What that means
[47:05] for what David Friedberg talked about on
[47:07] the All-In podcast with this molecules
[47:09] to bits and how China basically owns the
[47:12] manufacturing already. They own this.
[47:13] Well, this is all part of their
[47:14] long-term plan. But to hear it presented
[47:17] in a way that is best for their economy
[47:19] and navigating their own situation,
[47:22] which is how do we make sure that we
[47:24] don't have a big problem here even
[47:26] though college kids are having a tough
[47:28] time getting jobs, entrepreneurs are
[47:29] having a hard time making money, and the
[47:31] housing market is not going up. To hear
[47:33] him talk about it in the AI context was
[47:36] very important. So, once I've done the
[47:38] same thing on BitTensor and I've
[47:39] listened to 10 Kevin Rudds give me their
[47:42] opinion on their business and where it
[47:44] fits in, I'll be better in a position to
[47:45] answer.
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[48:53] >> Um this is uh speaking of connecting
[48:55] dots. One thing I've been thinking about
[48:57] and um
[48:58] maybe I'll pose this question to you and
[48:59] to the audience and then next week we
[49:01] can come back and talk about maybe some
[49:03] conclusions we have. But um I was
[49:06] watching, I don't know if you've seen
[49:07] these videos of uh
[49:09] um the migrants in Spain. And there's
[49:12] basically, you know, thousands, tens of
[49:14] thousands of people who are coming on
[49:15] shore. And I'm not an expert on Spain or
[49:19] the policies or or whatever, but it's a
[49:21] it's a pretty um
[49:22] jarring video when you see this.
[49:25] And what it made me think about was
[49:28] immigration to the United States used to
[49:30] happen on boats where people would come
[49:34] over and they pretty much could bring
[49:37] whatever they could carry. That was, you
[49:39] know, kind of the the assets that you
[49:41] could bring with you. And there were
[49:44] stories of, you know, people uh getting
[49:46] on trains and uh people confiscating the
[49:49] gold at the train station or, you know,
[49:50] like all of these different kind of
[49:52] things, right?
[49:53] Now though, when money moves digital,
[49:57] there's a very different,
[49:59] um,
[50:00] kind of what can you bring with you? But
[50:01] then vice versa, what can you send back?
[50:04] And we know remittances are huge, you
[50:06] know, outside the United leaving the
[50:07] United States or leaving some of these
[50:08] countries going back into places where
[50:11] immigrants are coming from.
[50:13] And so, what I don't yet have a strong
[50:15] opinion on is how important is some of
[50:19] the migration patterns and some and some
[50:20] of these things that we're seeing that I
[50:22] think a lot of people look through a
[50:23] political lens,
[50:24] but actually in a weird way, the
[50:26] financial rails being digitized, the
[50:28] markets being opened
[50:30] is empowering a participation that
[50:32] historically wasn't there. You know, you
[50:34] you you would have to get physical
[50:36] dollars or or currency, you'd have to
[50:38] get gold, like these things that just no
[50:40] longer exist. It does feel like that is
[50:44] part of the crypto story, that is part
[50:46] of the digital rail story,
[50:49] uh, etc.
[50:50] It's just not, you know, tokenization
[50:53] and Hayes, NYSE or Nasdaq going to win,
[50:55] right? It's much more kind of like on
[50:57] the ground actual people using this
[50:59] stuff in a way that maybe people in
[51:00] America don't quite yet understand.
[51:03] >> Yeah,
[51:05] so
[51:07] you left one thing out and again, I'm I
[51:08] I
[51:10] I only do this because I spend so much
[51:12] time on this connection. So, everything
[51:14] you said is true.
[51:16] Um,
[51:17] by having digital currency, by having
[51:19] the ability to move things easily to go
[51:21] through it, borders are going to break
[51:23] down by definition. Um, the capitalist
[51:26] the the financial guardrails are
[51:28] changing,
[51:29] but the part that is different, if you
[51:31] go through why people would leave a
[51:33] country and go to another place. And
[51:34] let's leave out the debasement cuz now
[51:37] you have the ability of hiding your
[51:38] money in something that doesn't debase.
[51:40] So, if you want to stay in Argentina and
[51:42] the currency is devaluing 50% a year,
[51:45] you just put your money in stable coins,
[51:47] dollar stable coins, you're fine. Like,
[51:49] you couldn't do that while I was in
[51:50] Brazil. You had to go to a black market
[51:51] and do that. So, we've already kind of
[51:53] resolved that.
[51:54] The other thing is,
[51:56] if you wanted to hire educated people
[51:58] and run a business, get an education,
[52:01] that was the reason why people came to
[52:03] America. You wanted to get an education
[52:05] here, then you would stay here, you have
[52:06] a big labor force that's educated. If
[52:09] you were from Brazil, there just wasn't
[52:10] enough educated people to kind of build
[52:12] a business the same way. And so,
[52:15] what has changed with AI connected to
[52:18] crypto is now you can build a business
[52:19] with no people. You have the cloud you
[52:21] have platforms, so you can sell your
[52:23] product globally, anywhere you want, and
[52:26] can have the money come in in stable
[52:28] coins. You pay the local tax, Stripe
[52:30] does all this stuff for you. Everything
[52:32] has made it easier for you to live
[52:34] anywhere and run a business. You don't
[52:36] have to grow it needing to go to school
[52:39] to certain place. You can use AI to lose
[52:41] learn whatever you want. You can hire AI
[52:43] agents so that we don't have to find
[52:44] smart
[52:46] This is where we're going is that to me
[52:47] borders are breaking down. And a person
[52:49] I've mentioned to you that's a good
[52:50] friend is Marco Papic, and he wrote a
[52:52] paper on the metaverse back in 2021.
[52:55] Now, it happened to coincide with the
[52:57] crypt the crypto peak and the metaverse
[52:59] peak, but a lot of what he wrote in
[53:01] there as a geo macro person was 100%
[53:04] true. Cuz then you start getting into
[53:06] well, if the metaverse exists, then
[53:09] aren't all borders breaking down over
[53:11] time? And so, I do believe you're losing
[53:13] some of it. You never lose the
[53:14] nationalism of people loving their
[53:16] country and where they were born, but it
[53:18] does change the fact that over time I
[53:20] think less people are going to need to
[53:21] leave anything and they can do whatever
[53:23] they want financially, transaction-wise,
[53:26] from a location, and going anywhere will
[53:28] be easier because
[53:30] you'll be able to virtually go anywhere
[53:32] anyway. So, all of this stuff with
[53:34] borders and countries is going to become
[53:36] more fragmented and people's views on
[53:38] are going to change over time.
[53:39] >> Yeah, in metaverse thing's are so funny
[53:41] to me. Um, I was never
[53:43] uh
[53:44] a big believer in what I call like um
[53:47] the video game metaverse. Kind of the
[53:49] like we're all going to have avatars and
[53:51] you know, that that type of thing. I I
[53:52] just for whatever reason never really
[53:53] was like that's going to be the the
[53:55] future. But what I used to talk about is
[53:57] like you and I are hanging out in the
[53:58] metaverse right now.
[54:00] Right? We are talking at um in a way
[54:03] where we can be ourselves to a meeting
[54:07] on the internet. And we don't have to be
[54:09] together. We can do it in real time and
[54:12] then we're able to we could be live and
[54:14] you could have people all around the
[54:15] world watching. Or you can record it and
[54:18] post it and you know, watch later. So I
[54:20] I think that the concept maybe to your
[54:22] point of the metaverse or or kind of
[54:24] this like digital uh world is definitely
[54:27] already happened. I wouldn't even argue
[54:28] that it's going to happen. It's already
[54:30] happened. We you know, Zoom and and
[54:31] Twitter and you all these things.
[54:33] At the same time, I don't know how much
[54:35] of it is like the you know, cartoon
[54:38] avatars and and that whole thing. I
[54:40] think maybe people have gotten a little
[54:41] bit more sour on and then probably
[54:43] rightfully so.
[54:44] >> Anyone that is a child the same age as
[54:47] my son, so
[54:49] 21
[54:51] has gone through two phenomena. One is
[54:54] the crypto side during COVID where it
[54:56] just took off.
[54:58] But before that, Fortnite.
[55:00] And Fortnite was a very metaverse thing.
[55:03] You're playing a video game and it grew
[55:06] rapidly from zero, I mean it was the
[55:08] fastest growing video game in history.
[55:11] And we all had that thing of hearing our
[55:14] son or daughter playing this game in a
[55:17] room screaming and they were talking to
[55:19] friends online playing the game at the
[55:21] exact same time with the headphone on.
[55:23] Like this has already happened. That
[55:24] used to be, you know, me running around
[55:27] playing fort outside. My mom was like
[55:29] get out of the house, go run around the
[55:30] backyard. This was happening virtually.
[55:33] Um the crypto side, my son traded
[55:35] aggressively at 13 years old and made a
[55:38] lot of money and lost a lot of money.
[55:39] Something that Leopold just did at 25,
[55:42] he's barely older than my son. My son
[55:43] has already accomplished what Leopold
[55:45] did blowing up and leverage and getting
[55:47] involved in crypto and going up and
[55:49] down.
[55:50] But there was something else that
[55:51] happened that I've mentioned before.
[55:54] The Philippines went through an economic
[55:56] change because of Axi Infinity. And for
[55:58] any of you watching that have never read
[56:00] about Axi Infinity, go bring up a
[56:02] YouTube documentary. I know there's a
[56:03] bunch out there. There's one that's 30
[56:05] minutes.
[56:06] It impacted the entire economy of the
[56:09] Philippines. So,
[56:11] that is another form of metaverse. That
[56:13] is gaming meets the economics. It was
[56:16] all about gambling. It was all about a
[56:18] video game. It was like Fortnite, but it
[56:20] was pay-to-play and it was having an
[56:22] impact on the economy and I
[56:24] my son played it for one day and said he
[56:26] could never win because they were too
[56:28] good. That is the world I absolutely
[56:31] believe we're heading towards. The only
[56:32] reason it hasn't happened yet,
[56:35] crypto and the ideas are still good.
[56:38] They're still all of the entrepreneurs
[56:40] that came up with these things.
[56:42] It's going to happen. When I hear Candy
[56:45] Digital and I realize as a sports fan
[56:47] that that scenario of a sports and the
[56:51] memories you have being valuable, being
[56:53] at a game, the dunk. You already have a
[56:55] painting of OG
[56:59] that I saw in your office,
[57:01] that moment in time I'll never forget.
[57:04] I'll never forget where I was. I'll
[57:06] never forget being under the basket for
[57:08] that and the people I was with. I'll
[57:10] never forget that even if I never see
[57:12] them again. So, I think people have to
[57:14] realize that the world that you're
[57:15] describing, this virtual world, virtual
[57:18] money, all of these things, they're
[57:20] happening.
[57:21] And it's owned the money of the world,
[57:23] the 700 trillion is owned predominantly
[57:25] by people that are baby boomers and
[57:27] people that are above the age of 60. As
[57:29] the demographic shifts, these younger
[57:32] people like my son, like Leopold, they
[57:34] believe in this type of
[57:37] I hate to say it, balls-to-the-wall type
[57:38] approach. The entertainment is coming
[57:40] from living life and going through the
[57:41] ups and downs and virtually traveling
[57:43] and all of this. It's a different world
[57:45] and I think it's going to remain a
[57:46] different world for a long time.
[57:48] >> I love it. I mean, why not why not live
[57:50] life that way versus be bored, you know?
[57:54] >> That's why I'm in Maine, my friend.
[57:56] >> [laughter]
[57:57] >> All right. What
[57:58] what what are you going to cover in your
[57:59] video this week? For anyone who goes go
[58:02] on YouTube and just search Jordy Visser,
[58:04] go check out the video that he puts out
[58:05] on Sunday morning. But what what are you
[58:06] going to cover this week?
[58:08] >> So, I'm going to go through the the
[58:10] Leopold situation. I'm going to go
[58:12] through the details on the factor moves,
[58:16] the market structure change,
[58:18] and then I mean, again, I think people
[58:22] based on my subscribers and based on the
[58:24] people that are involved with me on a
[58:26] regular basis, I had to do four videos
[58:29] in true, you know, four this month on
[58:31] top of the four that I already do for
[58:33] the subscribers,
[58:34] because during these months, it gets
[58:37] very nerve-racking and you're more prone
[58:39] to making emotional decisions. I'm going
[58:41] to cover why I think the bottom is in
[58:43] for the AI trade and why people should
[58:45] be going through I'm I'm going to show
[58:46] how I've created report called Combing
[58:48] Through the Carnage to go through all of
[58:51] the details and which names at this
[58:53] point technically didn't break down.
[58:54] They've reset and as my father used to
[58:56] say, if in May the odds on the AI trade
[59:00] working were one to two and you were
[59:02] barely getting any payoff over the next
[59:03] 6 months,
[59:05] you'll be shocked right now that with
[59:06] the correction we've had, which is still
[59:08] in a bull market, we're still above
[59:09] moving averages,
[59:11] the odds have now gone back to three to
[59:12] one on a lot of things. So, I mentioned
[59:14] last week that I bought Micron
[59:17] or 2 weeks ago. Well, I got chance to
[59:20] buy a little bit lower and as I said,
[59:21] these were nibbles. Now I feel more
[59:23] comfortable buying into weakness rather
[59:26] than just buying strength. I don't think
[59:27] we're zooming right to the top of
[59:29] things. I think there's going to be more
[59:31] of a more liquidations coming
[59:33] particularly in the first week of
[59:34] August, but I do think that the Leopold
[59:37] situation ended up getting a tremendous
[59:39] amount of sell pressure. So, I'm going
[59:41] to go through that, my experience on
[59:42] those, and
[59:43] we'll cover it all this weekend.
[59:45] >> Amazing. All right, Jordy. Thank you
[59:47] very much. We'll talk again next week.
[59:49] >> Thanks, bud. Have a good one.