Speaker 1I've never seen a more hated bull market around the greatest innovation technology that the world has ever seen. Agents have not replaced people at work. What has happened is they have not hired people and then the corporate ladder has stopped. So you can't go up any further and the costs haven't changed inside the city. So I think this is what builds the anger is humans do much better with hope. And if hope has been taken away, which is what the corporate ladder and getting more money in the future is, then I think someone is to blame. Data centers are to blame potentially. I think robots and agents will be taxed. In the world that I'm seeing, the founders are going to own 80, 90, 100% of their business because they don't need employees and they don't need to borrow money. And those are the two things. If you need capital and you need employees, you have to give up a lot of your money. But with AI, you don't need either.
Speaker 2So you think that AI is going to be the catalyst that means the people who own the $900 trillion are going to need Bitcoin? Okay, Jordy, I'm very glad to have you on the show. I've been wanting to do this for a little while. You've been on my radar for a bit, but it was really when you did the Bitcoin IPO moment piece that you put on your sub stack that you sort of sprung to my attention. You've been an investor for 30 years, longer? 30 plus years. I want to know from your perspective, what you see right now that you feel like everyone's missing? Jordy, what do you see right now that you feel like everyone's missing?
Speaker 1So there's a lot of things people are missing. Most of them have to do with AI. But the reason I decided to leave the traditional investing world was really two major reasons that fit in with the question you had. Number one, I believe that the combination of AI and crypto was going to change the world very, very rapidly. With the speed coming from AI and the guardrails, necessary for the speed coming from the crypto side. But there's another angle, too. I believe that AI was also going to disrupt all bureaucracies, and that this was going to be about being in the speed rail. So I write a lot about the problems of friction. Bitcoin, to me, represents the other side of friction. That's my viewpoint. I made the decision that when I was talking to people in both the traditional finance world, but also as I got more involved in the crypto side, and I was listening to what people were saying, I very seldom meet anyone at all on either side that talks about what Michael Saylor talked about. And it was his, I'd say, experience-- and I'm a very big experiential person, so I listen to what people said-- but he's the only person I've heard talk about his business being disrupted by the speed of technology. Mm-hmm. And then also what that led to in the basement and why he was trying to change his business.
Speaker 2So specifically, are you talking about when he first came onto the Bitcoin scene, he talked a lot about his $500 million melting ice cube of money that he was sat on? Is that what you're referring to?
Speaker 1Yeah. I mean, that is basically, to me, what every diner on the streets of New York and every small business has gone through, which is you can't compete with better technology. And if you don't have this-- Mm-hmm. You know, this massive capital-raising ability. And in his case, he talked about, I couldn't beat Microsoft. I'd have to invest and go a completely different path. And so that trapped feeling-- and that's why his line of, you don't find Bitcoin, Bitcoin finds you-- was really what I think people are missing. I think my views are different in terms of the end game, but I think Michael's connection with the technology disruption and the speed of that and the inability to compete was really a big part of it.
Speaker 2Yeah. And he was obviously very early on that train. There's been a lot of talk of sort of institutional investment in Bitcoin. Some people saying it's already here. Obviously, there's been huge wins in terms of like the BlackRock ETF strategy sort of started the institutional investment. But we've not seen that much. I don't feel like we've had the wave of institutional investment that people predicted. Would you agree with that? And why do you think that's the case?
Speaker 1We definitely have not. So let's go back for a second, because you said something which I don't agree with. And it's not that we disagree. It's that I think what you said, it's important for people to hear. What Michael Saylor did that makes his decision unique is he folded. And I don't think people realize human beings don't like to fold, especially if they've built their own business. He folded and said, "I can't win. So I'm going to take this big risk." It wasn't an easy risk. It was a big risk. And he had to go sell his board. And all the story that comes with it, I think there's thousands of mom and pop businesses. There's thousands of Fords for big companies that don't fold. And whatever reason, that's something he doesn't get enough credit for.
Speaker 2I see. So you're saying he was on the very traditional playbook, that path that every company goes on. And he said, "Okay, that no longer works." That was him folding.
Speaker 1He realized that, like your point, the melting ice cube, the inevitability and low probability outcomes to get there. And Bitcoin was a better solution for him. He just came at the right time, because this was something I couldn't solve for myself, which was, how do businesses that are failing? So now let's take it a different way. There's only seven companies working. How do the other billions of individuals compete with seven companies? And what he chose was Bitcoin. Now, I don't think individuals themselves should go out there and do it. And we'll get to your institutional question. But I do think every individual needs to think of their own balance sheet the way Michael did. Because I always say to young kids in college, "Well, you have to care about Jordy Visser University. You have an LLC now. You come out, you graduate. Don't think of you work for this company. Think of your path. You're going to work for five, six, seven companies. That's your company. And as you make money and income, you have to decide what to do with your balance sheet. And if you spend it and you don't invest in it, you're probably not going to have as much, unless your income is huge. I think if you really take a case study to what he did and get past all of the-- he's been his own worst enemy in many ways, in terms of the way he's approached it. But I know he doesn't care, because he was the one that made the decision. The person that makes the first decision in anything and then has a moat around that decision, which he does, is this. So let's get to your institutional question. Straddling both places now for two years, meaning I've been embraced by-- I've been embraced by the crypto/Bitcoin community. I know everyone in the macro world, in the traditional finance world, because I've been in it or was in it for 30 years. And I developed some-- everyone developed some sort of respect in there. And I've always been a thinker, and I've always done content. I think this is a very simple thing. Michael also says, you don't find Bitcoin, Bitcoin finds you. Well, for people that have $900 trillion in assets, the majority of them are in the top 1%. And then when you go down in the top 10, you're dealing with almost all of the world's money. They don't need Bitcoin. So the reason they haven't embraced it is because they don't need it. The reason they haven't embraced the other guardrails is because they don't care if their money settles in a period of time. They don't care-- Europe, Japan, the US, they don't care about the valuation. We're not talking about Brazil, Zimbabwe-type hyperinflation. We're just talking about, OK, no confiscation of money, worst-case scenario. You get a few scares every now and then. In the case of Europe, you might get 17 years of no equity performance, but it doesn't really matter because you own a lot of real estate. I think that's starting to change now. And so I always say that one common thread between human beings that I've never not seen is greed. They care about making money. And if for whatever reason fiat assets stop working, which I believe AI will do to all the $900 trillion, then you're left with a scenario that-- Oh, my gosh. We've got to find something that is growing. And I think that's where crypto is right now. There's no question in my mind. I'm a big, let's say, early-stage Jeff Booth disciple in terms of embracing his view that innovation is inherently deflationary. Governments need to fight off the deflation. But at some point, two things happen. And we're at that point. Joseph Schumpeter also said that creative destruction occurs. It ultimately leads to socialism. And that's kind of where we're getting to, except there's another avenue too. So when you get to the point where the deflation gets so bad and the governments, even with their printing, all they're doing is siphoning the money into the wealthiest hands, you get what we have now, which is-- People start comparing their life to the people that have the money. But also that money that ends up there, it drives real estate prices in Australia and in New York to places where the people who serve as police officers and nurses and everything else, they can't afford to live there. I have three daughters that are in the helping people field. They can't afford to live where they want. So they have to live outside the city. They have to take a long commute. So their lives are not good. The schooling that they have to pay for. If they want to live in Manhattan, they can't. Even if they live a lifestyle where they sacrifice, they can't afford to send their kids to school. And that's because the distribution wealth has gotten so big. So I think the Jeff Booth argument has reached the breaking point and where AI fits in is AI is a democratizing force for education. You don't need to go to school. I believe that when we get to humanoids, the cost of real estate will stop going higher because it'll be much easier to make things. You won't need the shortages of people. In the US, we had to bring in immigrants and we shut off immigration. There's just not enough reasonably priced labor for the housing market, things like that. So I'm a big believer that we reach the end game and people are underestimating AI. And you asked at the beginning, what are people missing? I think everyone is underestimating the speed of AI. And I've already seen it over the last 12 months. That's where I spend my life. It's had a big impact on investing markets. If you didn't catch the AI move, you've missed huge returns for many, many names.
Speaker 2So I've got so much I want to ask you in there, but everything you described there in terms of people not being able to live where they want to live is like the fiat degradation of society, essentially. It's the K-shaped economy forcing people out of where they may be from, where they want to live. In Bitcoin, a lot of people talk about if we enter. A Bitcoin standard, a hyper-Bitcoinized world. They talk about that scenario as if it's a bit of a utopia and things like that start reversing. Do you think that can be true?
Speaker 1I think without AI, no. So what has happened now to change everything is that AI has reached a level where the agentic world is happening. The crypto world, because people don't even want to hear the story, and I see this with AI, when I talk to people about artificial intelligence, I can immediately tell whether they believe in it or they don't. I mean, I was around people today at the event where I can tell very quickly. And as I showed in my video this past weekend, the numbers are staggering of people who use AI and don't use AI. It's all demographics. 55 and higher, they don't use AI. So that means my age bracket. I'm one of the 2%. And I don't use it from a chatbot perspective. I'm one of the 2%. I'm one of the 2%. I'm one of the 2%. I build with it.
Speaker 2Well, that's what I was going to say, because there's using AI as if it's Google, and then there's actually using AI.
Speaker 1Yeah. And so when I hear economists say, "We're going into a depression, we're going to have a big fall, the bubble's going to blow," I'm like, "Well, of course you say that. You don't use it." So how could you possibly understand? So for me, the utopia that'll come is that without the agentic side, that is the bridge. And I've been using the word bridge a lot lately, which is, how do we go from the guardrails are built, they're faster, they're cheaper than the traditional payment system. Tokenization opens up fractional ownership. It opens up anyone owning a stock in any country in a digital virtual platform. These are things that should happen. They are very democratizing, because it means if you've limited the ability for people to invest in things, the only thing they can really invest in is an ETF, which allows you to buy fractional shares of Microsoft. So everyone is funneled into US companies and the bigger companies. Yeah. It feeds this. Okay, you have a small business, you have no way of raising capital. Why? Well, you can go to the bank and you can borrow it for a lot of money. But what if I have a great idea? Sorry, that's the only way you can do it. As opposed to, hey, I have a community of a billion people that love what I do. And I use Justin Bieber as this example, where Justin Bieber had to go to the bank. The bank was Scooter Braun. He took most of his business. Then he goes off and makes all this money. He would have owned most of that himself, but in today's world of tokenization and programmable money, he would have given his community royalties on his stuff, and they'd all be successful, as opposed to Scooter Braun taking all this money. So you get the distribution of wealth that's going to happen through the democratization of ownership, the democratization of education, all of those things. But without AI agents that serve as the bridge, the translation, it wouldn't happen, in my opinion. You wouldn't get to the point, because what does it matter if crypto is three trillion dollar market cap or six trillion? If we've got 900 trillion on the other side? It's a nice little party game, but it's not something that is ever going to be anything. And for people that were early into it, like yourself, more so than me, they deserve the payoff. And the payoff comes when the AI agents come, and that just happens.
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Speaker 1So agents can't work on Visa and MasterCard. They want to work on speed. They want to make, they have to make 17 transactions, and their goal is going to be very simple, save people money. So Muse just came out. All you have to do is go type into anything and say, what are the majority of people saying about the? Benefits from Muse. And all of them have to do with saving money and time. That's what AI agents allow you to do. I use it all day long. Before we sat down, when I was downstairs waiting for you, I literally had the time to go, and this has probably happened to everyone. You know, when you try to use a new service, this happened because I had to sign a document online and I refused to pay for DocuSign. And so I just keep going through all the free trials and I'll use a thing, get a free trial. Next time I'll use a different Google, email and, you know, and I'll keep going. But the mistake is they give you a free trial for only 30 days and then you have to remember to go cancel it. So if you do this all the time, and let's assume you do 75 free trials in a day, you're going to miss one and then you're going to be paying for a service for the next 12 months.
Speaker 2I do this all the time.
Speaker 1Okay. Well, with Muse, you just say, I just did this and it'll remind me in 10 days so I can go in and cancel it. And in some cases it'll cancel for you if you give it your Google password in this. So I've given it most of my password. I've given it most of my password. I've given it most of my passwords. So Muse will prevent that from day one, meaning before I hit it, I go, Hey, just remind me in 10 days so that we can do this. And then it will do it for you. This is what you're getting into. So the reason that's so important is by saving money, the same thing is going to happen. That's its goal. Its goal is to save you money. Well, what's cheaper to use an AI agent to book something or to do it yourself? And everyone's going to start to realize I'm going to give it more trust. So I've said, I've said to a lot of people that, um, I think his name is William McGuire. Um, I think that's how you pronounce it. McGuire. Um, he, he talked about trust being a valuation tool for an asset. And I think we're getting into that. So part of what AI is going to do, it'll handle the speed of the rails. So the crypto rails that were set up to handle everything will go. Tokenization will be heavily agentic. We already have agentic trading. So Robinhood has talked about tokenization and agentic trading combined together. This is all going to happen. So whether it's Muse, connecting to agentic payments, whether it's Stripe doing an entire stack over the last 18 months of things prepping for this, I don't just live in a world of my vision. I've been thinking about this for well over a year. And I wrote a paper this week on it. And I said, I said at the panel, this paper came out recently because the price of Bitcoin went higher after bad news. It handled bad news really well. The agentic side came out and tokenization was going to happen, but I knew tokenization would not go fast enough. And last we had the agentic side. So now it's all come together. So now's the right time to release a paper. this was my vision on what would happening because to me ai is inevitable as the linkage for crypto
Speaker 2okay i don't want to go down too much of a tangent here but you just said that bitcoin went higher on bad news recently um what was the bad news was that the interest rate hike
Speaker 1no so you can take the interest rate height you can take the failure of the clarity act let's go back to when it was doing well in august in particular let's say july because it was really the end of july that you got the change where of course the the people that are left the only enthusiast the only people that wear their orange ties are the debasement libertarian crowd so when besant decided to intervene in the yen i wrote a paper and everyone realized oh my god then he did the quarterly refunding announcement everyone okay here we go the debasement's gonna go gold shoots up all this stuff happens and everyone gets excited gold's come back down to right where it was like when we came in here i didn't actually know that yeah it's it gold has given up most of what it is and the reason is because rates have gone higher but this was really in july where you had the cold wallet situation you had the clarity act going from as high as 50 probability of getting done to dropping down to the you know the the mid 20s before it went down further and ultimately failed uh you had the ai trade completely unwinding yeah during the month of july you had a lot of things happening where the narratives on bitcoin are it's a it's a high beta tech side okay well ai was unwinding you had the rate situation wasn't responding to rates because we built in fed rate hikes where we still had not had right everything kind of changed in that month and it acted well meaning it wasn't going down and then the second that the intervention in the yen happened and then all the subsequent things that went on that ultimately didn't stop the rate move higher that just got the debasement crowd excited but it even broke away from gold where gold has gone down and bitcoin's still near the high end
Speaker 2of the move so and so what do you think the reason for that is then because you could say that bitcoin was already down you know 50 it had its bear market and was it just ready to move higher anyway like why do you think it moved when nothing else did
Speaker 1no because there were other reports so i created a here here's the problem um i love the community but for the hardliner bitcoin crowd that call the other cryptocurrency coins um i've kind of left myself out of this little debate and i've broken it down into three let's say nicer ways to put everything you got the bitcoiners they get to keep their name see that's great um i call the coiners programmables okay they're the technologists in the space that are trying to relive what happened with the internet and then you have the incumbents now the incumbents are the people with the 900 trillion for this to work all three need to agree that the crypto ecosystem is going to work there is no way that i can come up with a scenario the 900 trillion go you know what bitcoin is a good asset for us to move into unless every time you debase what seems to happen is they get more money yeah and they don't move it over so debasement's not the solution guys like i don't know who came up with this i understand that it did work for the first 15 years but that's kind of the way all innovations work and i think that's the issue mark andreessen i always reference the paper he wrote why bitcoin matters and he wrote it in 2014 in january it doesn't get talked about by a lot of the bitcoin crowd because it it really immortalized the white paper itself and it talked about the innovation but within there he kind of described the value which was tokenization he didn't call tokenization but that's what it was the transference of of of assets and having it the way it's gone he talked about stable coins and he mentioned bitcoin but the stable stable coins replaced bitcoin as kind of the original theme i think that people thought that mark andreessen was covering so you have this once that he mentioned the basement as the thing and mark andreessen's a lot smarter um on the importance of innovation so i call him the godfather of the programmable part michael saylor's godfather of the bitcoiners and the incumbents their ego is so big that they each consider themselves the gods of the incumbent side so um to get them to convince them to put their money into something that they don't know and they've publicly said like jamie dimon lauren buffett charlie munger the zero value um the fact that jamie dimon is now involved in promoting it is only for one reason fear of competition why is he doing it he sees what blackrock are doing exactly and they need to be part of it so what ends up happening with anything like that is mark andreessen called this perfectly the only reason that they're involved though is not because of bitcoin jamie dimon did not turn because bitcoin went up to a certain level he turned because of tokenization and stable coins so the incumbents are now seeing the bridge and the investors are like you know what i can buy into this so now you're going to start having fundamentals that people can latch on to you're starting and that's what robin hood chain that's the importance of it now none of that matters without the agentic side because the agentic side brings the volume and when you have a business that has very low fees the only way it makes any mathematical sense is with extreme volumes now what have we seen that people underestimated that had extreme volumes so i publicly talked about micron for well over a year and i talked about it all to the incumbents last year and i've given these numbers out because i just want to make sure people realize my view on where bitcoin will be in a year where all of the crypto ecosystem will be don't underestimate ai is the point so micron from all of the people that cover it well and know everything about the company they're forecasted earnings per share for the end of this year 2026 as of the first quarter of or the second quarter of last year they were ten dollars expected for this year they're now expected to be 71 dollars so they were wrong by an amount that's just unfathomable so the question is what happened well they underestimated ai now the problem is the reason i was writing papers about i'm like don't you guys see the tokens that are happening in for a year and i'm like yeah i'm not sure what's going on i'm not sure what the difference is going to explode now we had the tariffs going on at that time but i'm telling you the smartest people in the world said what's a token now here we are a year later that whole token word is really important again they're not paying attention so i'm just telling you that people are underestimating the volume and speed and how you make money those tokens took and i joke about this because when i was in dc last week i had to give a speech and what i said was do you know the clarity act by a lot of the people in the world is that they're not paying attention to what's going on in the world they're not paying attention to what's going on in the world they're not paying attention to what's going on in the world they're not paying attention to what's going on in the world they're not paying attention to what's going on in the world they're not paying attention to what's going on in the world they're not paying attention to what's going on in the world they're not paying attention to what's going on in the world they're not paying attention to what's going on in the world they're not paying attention to what's going on in the world they're not paying attention to what's to bring up clarity for it to fail and then to have the CFTC and the SEC and everyone come out with their rule changes on the whole thing and saying, you guys can do this for the next three years, four years, five years, whatever the case. All of that's happened. So never underestimate the power of the speed and the volume of AI. I think people have lost a lot of potential money on it. I think crypto is going to fit the same way.
Speaker 2Okay. So I definitely want to come back to the AI market as it stands right now, but just quickly on the debasement thing, because I've not heard someone say that Bitcoin is not a debasement hedge. Is it that it is that, but that's not the most important story? Because if it's not that, it kind of means that the scarcity of Bitcoin is not important.
Speaker 1So the scarcity of Bitcoin is not important to the debasement theme is my reality. If it was, it would be up far more. I don't even understand the concept of what it means. The scarcity thing I believe in, but the reason I believe in the scarcity. Is because Bitcoin has a moat on time. So AI makes everything. Everything either hackable or replaceable. So a house, the value of a house, you have to have margin in it. Okay. How do you price in humanoids when they can work 24 seven and we're solving problems for nano and all of this stuff to where if the input costs go down to zero, then what's the value of a house sitting next to it? If it costs zero to build the one next to it, would you rather.
Speaker 2Use the land then?
Speaker 1Yeah. And that's it. And in the end, okay, how much is the land really worth? This is a mistake that I think people make is, well, how much does the land work? People didn't buy that. I mean, no offense to the people who own land and go through this. And I agree having a beautiful view is worth a good amount of money to show off. But if you're in a world of abundance, I don't know what showing off your big house means when virtual reality allows you to travel anywhere. So when you start getting into sci-fi things, and again, we're past the point of getting into them, we have a company that raised a lot of money to go to Mars. So like land is about to get much more expansive at some point. And maybe people would rather be on the moon. Maybe that'll be the most expensive property. I just know that when you think about scarcity, you have to bring in the fact that AI, all technology does. There's a reason why Napster, you know, was a company and then they were banned because they were making music free. And it was this whole thing. When I mentioned William, uh, guy or one of the reasons I became, I started listening to him on his pitch on Ethereum was because he was saying very smart things, but he was connected to Napster. And so he understood the peer to peer side. So Napster is a very important thing in like the Bitcoin journey for me, because I already saw it before the whole internet came, blew up the white paper came. You had this thing where you could steal things. And it's a big part of the scarcity issue. I just think when people do the scarcity, there's the first phase, which is the ideologues want to hide their money. away from the government. I get it. And they moved it in and it was a great decision and people made a lot of money off it. I just think going forward, people are missing the fact that Bitcoin didn't outperform the MAG-7. It did overall, but not to a point that people care, the incumbents. The incumbents made tons of money being along the MAG-7 because they went up at a very fast pace. I think right now Bitcoin relative to the MAG-7 is like the same level as 2016 or 17. So even in like a big thing, it didn't work during the basement. Everything worked during the basement. So the stuff that isn't scarce worked too. So I think people may have been using this narrative in a way that helped it. But I think the next phase to turn it into a hundred trillion dollar, 200 trillion, whatever you want the size to be, you actually need people to doubt the investments they have. And that's not a problem. How about the basement? Because if you keep debasing, those things never lose value. That's the whole point.
Speaker 2That actually makes sense. So the demonetization of things like real estate, that one I understand. And the thing that I don't necessarily understand is what that means for things like the stock market. Because I mean, right now the stock market is AI. There's almost nothing else interesting happening there. What does it mean for those investments?
Speaker 1So I've written about this a lot. There's two things about what are going to happen, which are going to destroy the growth of public equities. And what I want to make sure people understand, this is not a bearish argument. So if you put lots of money into the system and you use this debasement theme, the total sum of the assets has just gone higher with debasement. And Bitcoin has been a part of it. So how is it the best debasement asset? It doesn't make any sense to me. What I think people should be paying more attention to is at some point, you start to realize, well, wait a second, the money is not going into all people. It's going into the biggest people, the ones that own the assets. So it's a funneling into those things. What has to happen is there needs to be a democratization of ownership. The money needs to go to the 8 billion people that don't have anything.
Speaker 2So you're talking about the cancel on effect here?
Speaker 1Yes. But the way that it'll work is that AI allows me to grow a business without any investors and without any people. The biggest risk for public companies is that, number one, they're big. So they could stay big and relevant and they can look like Ford. And I pick on Ford, but it could be GM. It could be a lot of different companies. But the reality is, how long has Ford been around for? I mean, they've been around for 100 years. They stopped growing a long time ago. Assets can survive and have a function. But if they're not growing, they won't take in any new money. So it's not that the stock market will collapse. It's that the stock market will collapse. It's that on the one side, if tokenization happens, where capital can go, if they don't print like trillions more dollars, and all of a sudden you have a lot of tokens being listed, I don't know how many viewers your podcast has. But if I told you that there were a billion more podcasts tomorrow, you're probably going to be affected. Your growth will be affected. Now, your content could be the best out there. It'll keep growing at some pace. But there's no way having access to a trillion more podcasts tomorrow is going to affect your growth. So that's what's coming with tokenization. So private credit will be liquid. So people will be able to have their money and things. You'll be able to have IP. Like all of these things are going to happen. Because once you can tokenize anything, which is really what happened with crypto, you can tokenize any idea. And community-based investing to me is going to happen. So I think public equities are just going to lose their growth. And that'll happen partly through tokenization and partly through the ability of entrepreneurs to compete with big businesses. Big businesses of which I worked for one, but then even moved to another one that had 100 people. So when I go from Morgan Stanley and it started with 10,000 and ends up at, say, 50,000 people by the time I left, it's a bureaucracy. It's like a government. But yet they've been winning. How can a big bureaucracy win? Well, they have some moat. They're getting the talent. They're getting this. They're getting the best educated people. I came in at the bottom level from a school that they didn't normally hire from. That's what democratization of education is going to do. It's going to open up entrepreneurs in Africa and entrepreneurs in Brazil and Australia and people that maybe didn't go to the best schools. But like, you know what? I'm going to sit at home and I'm going to create a podcast to compete with Danny. I'm going to create one to compete with Jordi. I'm going to compete. I'm going to I'm going to make something and sell it over the Internet. All of a sudden, this stuff. And as long as you create something that people want and now they have access to it and your agent will find it because they'll be able to weed through everything and know what you like. All of a sudden, you're going to see a distribution of opportunity for people that didn't exist.
Speaker 2Do you think they'll be in that incumbent class that you described? Do you think everyone is going to push back against this because it's so disruptive and scary as they are the ones with the moat?
Speaker 1Do you think they're going to push back heavily against this? I mean, they have. I think that's what the crypto, you know, winter was about. I think a lot of the VC places that. I mean, they funded 21 and 22. They it wasn't dead. It was literally this wave of capital. I mean, I was joking with someone today who was like, hey, so-and-so. I'm like, and they worked at a Wall Street bank and they're like, yeah, it's been it's been a tough, you know, couple few years. I'm like, oh, so did you join in 21, 22? And yeah. OK. And in 30s, 40s. But really, when they joined 30s, that the thing that that says to me is that. Crypto got a wave of VC money in those VCs gave it to crypto companies on the vision. Most of those VCs have now become Republicans because of the experience of what happened, what they learned from crypto and with SAS and the fact that we were going to regulate tech and they became more libertarians. And they were like, hey, we believe in we don't believe in this. And we were help giving money. I think politics became part of kind of the let's say the the thing that has really made the country polarizing has been what you described, which is people fighting back on people not able to participate. And so socialism becomes the voting movement as well. So you get the far right and the far left because there's people that either don't like the hey, you're intervening too much in our life and generally they have more money or on the other side, hey, you're not allowing us to participate. And those fringes are getting more important and more important. And I think they all lead back to a place of what's positive for AI and positive for crypto. And I don't think the big half has a chance to fight it. I just don't.
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Speaker 1So I wrote a paper in June, basically titled The Firework Show Is Over. So number one, I want to make sure I get this clear. The word bubble is used so much. Yeah. You couldn't name one thing, one thing. Bars are a bubble. Hairdressers are a bubble. Like at some point you walk down the street and you're like, why are there so many of these? I just think people use this in the context of it's going to take the economy down, so I just want to make sure people get this straight. The only time there's a bubble that matters from an investment standpoint is when supply is too big to be saturated by the demand. Here's a bubble. The crypto guardrails in 21-22. So much money went into space, and there were kids coming from Wall Street. I'm quitting my job, Jordy. What do you think? I'm going to go over. I'm like, all right, great. Have a good time. And I'm not going to name the companies they were going to, but I mean, at Goldman Sachs, it was like every day I got a call from some young person going, I'm going to go over there.
Speaker 2What do you think? I'm guessing FTX.
Speaker 1I mean, FTX, Galaxy. It doesn't really matter. I mean, whoever had the most connections back to the bank, they were going there. But FTX was brought up from, that was the one place that Wall Street did invest in. Regardless, that was a bubble. Now, it was a bubble in the fact that too much money came in before the demand was there. Do I think NFTs are a great idea? Yeah, I actually do. Not the art side, but I think memories and experiences that you can digitally keep, just like memorabilia with inside the physical world, seems far more important to me in a digital world and to younger people than the actual physical side. I don't want to get off on a tangent on it, but I'm a big believer in NFTs in a certain context. But it was too early. It didn't make any sense, and it was too much money going into something new, speculating on it. This was the dot-com bubble for crypto. The AI side is not a bubble. The AI side is a bubble if you say, are all the companies going to make it? No. And the fireworks show was, it was easy to make money in the AI infrastructure trade and in the duopoly that was created with OpenAI and Anthropic. It's over. Micron, which is trading now at a, whatever, 4PE, depending on what earnings you use, do I think it's going to go up again? Yeah. But do I think the multiple is low? I've called this a bull market with inside a bear market. There are two types of bear markets. One is where the price goes down, the other one where the PEs go down. That's what's happening to equities. They're no longer being valued the same way. Crypto on the other end, I've used Peter Lynch, one of the most famous, I would say, contrarian investors who wrote a book called One Up on Wall Street, who literally said, I don't know, I don't know. I don't know. I don't know. He literally wrote, the key thing to finding great ideas is to find things that are undercovered by the sell side and that are still small and haven't been invested in yet. That is crypto. That is the exact definition. Wall Street doesn't know anything about it. I write research and I've got 46 names in my index. You couldn't find a person at Morgan Stanley, even with the digital asset team they're hiring, that knows as much as I do about some of these names because I'm researching them. I'm doing writings on them. I'm doing it. So I do think AI has peaked in the growth of it, in the surprise of it, in the ability to monetize it because the competition is too extreme. I think crypto is on the other end. It's coming out of the dot-com bubble. And what changed those companies, the Mag7, and had them build to the level they are is there was one event that occurred, which was the launch of the smartphone. And so to me, AI agents are the smartphone moment, the app store moment. They will allow the enthusiasm for the $900 trillion of incumbents to go, you know, there's something here. I really like this angle that crypto kind of went through its internet mode. We didn't know how to invest in the internet. Let's go find these L2s and go figure out which ones can make money. And I think Robinhood chain right now is kind of helping them zero in. And I can just tell you, as someone who stands on the bridge in the middle of it, where they're like, "Hey, Jordy, explain to me how tokenization fits in my world." And I'm getting that question now from, I would say, the biggest players at the most highest level. So not their analysts, but the actual decision makers. And the reason that's important is they know me. Number two, that means before they even allow their analysts to bring to them, like, "You should look at Zcash, or you should look at this," they're coming to me going, "Should I be looking at this? Give me the macro vision on this. Give me the bigger picture so I can go through it." And I'm getting those questions now, which says, "We're in the arena. We're in the arena. We're in the arena. We're in the arena." Yeah, we're in the early stages of a Peter Lynch moment of people finding it.
Speaker 2So if the massive growth in AI is over for now, you're not expecting this to pull back massively, but the major growth is gone for now. But you think that's still to come in Bitcoin sort of crypto world. If you were talking to, say, the CEO of Apple or Google, or maybe Google's a better example as it's so dialed in on the AI stuff, they're selling a lot of cash. Should they be looking to buy Bitcoin? No, they will
Speaker 1keep spending their money into oblivion because they have a lot of money sitting in orders. This is the most trapped, obvious thing I've ever seen in my lifetime. Microsoft, Amazon, Google, I mean, the major important hyperscalers, but even Oracle, they have massive orders for compute. And again, that's why I say there's no bubble. The man for compute is greater than supply. End of story. And if people don't know that, they just are not, they're living in their own bubble.
Speaker 2Yeah, 100%. It's definitely true.
Speaker 1I mean, the prices don't go down. Every bear argument that's ever been made has been disproven just by the prices that exist. I was just talking on the phone with someone who literally said, "The biggest problem we're having right now is we can't get enough compute online in the next two years." So it's like the window is out way past 28 at this point in terms of the demand side. So I think as we kind of, you know, move through this, Google has, I don't know, I think they're half a trillion dollars of back orders. They just don't have the compute, so they can't not spend the money. The question really comes, will they have a product outside of this boring product of supplying compute to OpenAI and Anthropic? I mean, they basically own a restaurant unless they can figure a way to monetize this. And what happened with Meta, Meta came out with Muse. It's a big hit. I've not heard of Meta.
Speaker 2I've not used it yet. You're not allowed to use it in Australia. It's US only for now.
Speaker 1Okay. I mean, I've used it. I've heard it's very good. Yeah. I've talked to you about it. It canceled or gave me the, I won't name the company, but the one I did a free trial to and pointed out. But it's done amazing things for me, including, and so people know, it does fraud alert for me. Everyone's worried about their bank account and stuff being connected to it. And I'm like, well, I got protection in my bank account on multiple levels. If you guys don't have it, go in there and say, "Hey, if anyone takes money out for more than $10 off a debit card, let me know." Because I don't use my debit card that much. And that's really where a lot of the bots go in. And in particular, in your checking account, because your savings account has more, like I've already looked all this stuff up. So I'm like, okay, here's my other check. Hey, I'm a big believer that if you don't want to die from cancer, you should know you have cancer day one. And it's a very simple thing. Absolutely. Well, the same thing goes with fraud. They're going to test it and I want to know. And so I'll give my protection at the bank and then I'll have protection with Muse. And I already do that. So Muse is a warning shot to Apple. Siri hasn't, they don't have it yet. Siri is dreadful. It's unbelievable. How about it?
Speaker 2Is it? Alexa is too.
Speaker 1So they haven't figured it out. Google, I mean, I'm using Muse on my Gmail accounts. So how come they haven't come out with Microsoft and Copilot? They're saying they have their agents now. OpenAI is going to have theirs and you know, Anthropix is going to have theirs. So the problem is for all of these companies, there's a lot of cooks in the kitchen already and the competition is going to be extreme. The thing I don't think people realize with the Mag 7 is they really are like seven different companies. And almost there's a lot of rumors that they agreed a long time ago. We're not going to go in your lane. You don't go in our lane. So when you break down what Amazon is, it's very different than what Apple is. It's very different than what Google is. And you go through it like, oh, these Mag 7, they do seven different things. Now they're all competing for the exact same pie. That's interesting. So by definition, they're going to be a feeding frenzy. It's going to drive costs down. So people don't think about these things. That's why I don't worry like, oh, Meta stock's going up. I'm like, yeah, great. And what happens when everyone else comes out with their version? Haven't you learned what happened with your fears on open source and all this? They'll all be feeding for zero cost because Muse
Speaker 2is free. And so what happens then as they compete? Do you think the Mag 7 becomes the Mag 6 and then the Mag 5 until we have the Mag 1?
Speaker 1It depends on how you measure it. Do I think here's the best way to say it. Cable companies, they're there. Their stocks suck. They become regulated commodities. They don't grow anymore. So what happens to a stock like AT&T? It's not like you've woken up. AT&T is never on the front page. Like if you go into X and say, what's the latest news on AT&T? There's no news. And if there is, it's about something bad or, you know. Yeah. We've had a date space, Yeah. Their debt's going to blow them up, but nothing good. So I think over time, these companies just become like that. I don't think they grow.
Speaker 2But this might be too extreme, but is this almost like the end of capitalism then?
Speaker 1So I think I have written or said that somewhere that it's very difficult for the way capitalism exists, the way people know it today. But here's the thing. I don't know what you call it if we go from the Mag 7 to the Mag 1 billion. Mm hmm. And all that means is a redistribution through a channel of competition and capitalism at the end of the day is cap is competition the problem is i don't think it's been fair competition when it gets back to it costs me nothing to borrow money and i get to hire the best talent because i can pay the most money so as you get a moat around your business it's very hard for there to be competitors so someone might have a better idea i mean go back to the mag 7 what did they do when there was a competitor they bought instagram what i could name a hundred little companies that were going rapidly that they just gobbled up yeah so i think that's what capitalism really was was you get big enough and before someone can compete you buy them you buy them and it's kind of rigged because the vc needs to be monetized and go through it i mean i just heard on the all-in podcast that they were describing um anthropic and like the the founders own very little of the company which is an amazing thing that here's a company that's not that old and it's trillions and i think dario owns two percent of it yeah that's crazy so again you think about a founder who creates a business that gets to this level that's not even that old and he owns two percent of it so i think we're kind of entering this weird world why does he own two percent i think when you go through the difference of that with like zuck with facebook and you realize well it's really hard with hardware companies that have to spend tons of money because they have to raise the money they have to give up ownership to be able to raise the money in the world that i'm seeing the founders are going to own 80 90 100 of their business because they don't need employees and they don't need to borrow money and those are the two things if you need capital and you need employees you have to give up a lot of your money but with ai you don't need either and so i you know i might be i might be crazy i might be the only person that believes this but i really do think that this is more about we invest in growth and if these companies can't grow their earnings fast enough their multiples compress one of the things about me that people that know and my weekly it's all data driven so i try to look at what the market is saying and it's saying to me triple c spreads are widening out in the u.s oh that means a recession is coming well no because high yield is not budging and investment grade is not budging the mag 7 cds is widening out and all these scary things okay but their equities at all-time highs their equity is lower in the cap structure than their debt guys like come on let's be the market's telling you something it's not telling you there's a problem with their borrowing it's saying that this is a very concentrated amount of borrowing and if you believe the ai trade is going to be a bubble what better thing than to buy cds on this plus for people that believe that this is just a repeat of the big short everyone made a ton of money doing this type of trade on the big shorts let's go buy cds on all these companies i just think the market has been telling you by the multiple compression and specifically nvidia nvidia's earnings have blown away all estimates and they literally just did something we've never seen before in terms of rating guidance for next year on their revenues way above the street i mean the street was expecting 40 top line revenue growth and they said it was going to be 70. for a company to say that even if they it's never happened and the reason i say it's never happened you would never say a year out you have that much certainty and visibility to say it's going to be way above where the street is and the stock was unchanged four days later now their pe has collapsed micron's pe is low why is that happening and i believe it's because out five years we have no certainty whatsoever yeah and at the end of the day the value of a fiat asset to get back to your scarcity side it's about the future discounted cash flows and that in it a pe to me gets back to bitcoin it's like how do you convert this into a pe well maybe the pe is the most vulnerable thing because it means you're extra you have to extrapolate this moat such a far time out that if you cut off five years from now you go you know what i'm going to place a very low probability this company will still be winning in five years well then the pe goes down to single digits and the reason i know that is because that's where the stock market was in 1980 before the personal computer started to get the raw data and i think that's where the stock market was in 1980 before the personal computer started to get the raw data and i think that's where the stock market was rise in pes in the us now it was coming out of the inflation era back then but there was also an uncertainty over rates were going to be we kind of have the same thing now with rates we don't know where rates are going to be and as i'm going to show this week for everyone worried about the bond market and what it means it's like guys the rates don't matter anymore like i don't know how to like get this across to people you guys are getting scared about something that i know doesn't matter it's another one of these market tells same thing with oil
Speaker 2does matter you say so many things that have just a thousand questions on it but um just before we got into rates because i do want to ask you about that with the ai trade the pe is dropping is that also partly a self-fulfilling prophecy where if enough people think it's a bubble they start treating it like a bubble and and therefore the stocks don't grow or shrink comparatively i've never
Speaker 1seen a more hated bull market around the greatest innovation technology that the world has ever seen yeah when cisco was trading at 100 pe and i i moved back from brazil i was watching very educated i've seen very educated people try to explain to me how it was justified and and i remember coming back being like so i leave brazil which is in a depression and you guys bring me back here because i was successful down there so now the capitalist side is we need jordy to come back here and run the s p options book um and then i get to see people who i still talk to today i'm like remember when you were drunk on pets.com and all this stuff that you own like yeah yeah that was that was a crazy time i was like i right now in the stock market we have none of that like none of that microns trading at a four p i mean if you thought if you do the numbers on micron and if someone said to me so what's the argument for memory i'm like well let's see we're not even in the first inning of compute demand we just started the agentic revolution in january opus 4.6 and open claw were kind of the the the key points for the agentic world and coding agents started enterprise adoption but enterprise adoption is in the middle of the first inning consumer agents muse just started yeah so it's like those two alone are massive but let's take it further full self-driving doesn't happen yet it's gonna happen and you need a hell of a lot more compute for doing visual and bringing that into and then after that you have humanoids you still have going to space like this is a never-ending demand for compute so theoretically micron should be trading extrapolating the next 10 years into their multiple it should be trading at least at least 40 times this year's earnings but it's not and the reason is because the market is smarter than any individual and we saw that with the sas apocalypse in the beginning part of the year so again you look to the market and i believe that when you take 8 billion people including if only two percent of people above the age of 55 are using ai the two percent that are using it they're engineers they're but at 55 they probably have a lot of money mark andreessen has a lot of people that have a lot of money that are using it and understand it they're saying the same thing i am because where am i getting my stuff from those people like i'm not the first person to say the valuation of these companies is coming down because terminal value has been eliminated but if you only listen to the bubbles here it's a lazy way for people to go oh thank god there's a bubble so that way i can just wait it out that's what a bubble means to me it's a lazy way of saying i don't have to use ai i don't have to buy any ai companies it doesn't really matter because i can just sit this one
Speaker 2out it's i mean it's both the most hated um sort of bull market but also just the most hated technological revolution like the it's become so politically polarized and pub key where we're recording above right now uh hosted a event in dc last week which was like they had a load of um ai infrastructure content so they were talking to data centers all that kind of thing and in the wake of that they've had an event in dc last week which was like they had a load of um ai infrastructure content so they were talking to data centers all that kind of thing and in the wake of that they've had an absolute ton of one-star reviews on their on their bar because they had those conversations within the bar like it's insane how much people hate the data centers yeah and like don't get me wrong i don't necessarily want to live right next to a data center but like the most of the people that hate it do not live next to a data center correct it's it's very interesting so i want to go back to rates you said rates don't matter why do rates not matter anymore because the economy's changed
Speaker 1dramatically since the iphone came into existence so um and i'll just use i could use australia as well but it's not going to be the same as as the us let's just use the us um first of all corporate balance sheets are pristine on the aggregate it's lunacy to me that people worry about the debt of like microsoft and google and all this stuff like these companies are worth so much money that go back to your debt to equity class like it there's no risk of default or anything with them borrowing a total of two trillion dollars between them when they're worth 20 30 trillion dollars in the aggregate so there's that the cash and the balance sheet is still enormous and marketable securities so on a risk analysis the corporate balance sheets today relative to the great financial crisis completely different i use great financial crisis as the brahmer because that's when the iphone came out yeah so when the iphone came out the companies that grew the mag 7 they took no debt so when you see these scary charts with these histograms and it's like look at the debt it's up here and it's coming from here i'm like the real story is the prior 10 years they took no debt how do you grow from a trillion to 15 trillion amongst those companies and take no debt yeah like it never happened before in mankind and you guys leave it. So when you see this stuff going up, okay, that's going to kill the growth going forward. I'm with you guys. It's not going to blow the company up. So rates don't matter from a corporate side. From a household side, household net worth in the United States of America is $195 trillion. Okay, let me say that again. $195 trillion. When you guys hear the big scary government debt number, it's $40 trillion. 120% of GDP. You know when Japan's debt was 120% of GDP? That was in 2000. That was a long time ago. That was a quarter of a century ago. They haven't blown up. They're still playing the party game of we don't need to pay our debt off because we just buy it back and go through it. So is the U.S. have that luxury yet? No, but they'll get there. They'll just keep buying back the debt, move everything into short-term yields, and it'll just become a sieve just like everything that went on during the great financial crisis. But betting against the government is a bad mistake. Rates for housing. The majority, 40% of housing. Housing in the U.S. completely paid off. The average mortgage rate on a house is sub 4%. So as rates go higher, these are fixed rate mortgages. And I'm pretty sure Australia does not have a big fixed rate mortgage. No, we don't have that. We don't have the luxury of that. Yeah. But in the U.S., they're locked in at fixed rate mortgages. So they're not getting worse. The wealthy people who don't have mortgages and have lots of cash, if rates are going higher, the government is giving more money into the system. This is not the case from before. And I can keep going on and on. But when you're left with is if the household balance sheets are good, the private sector as a whole are because corporations' balance sheets are good. The only people who get hurt from rates going higher are arguably the places that should go out of business. House sales are at zero in the U.S. I mean, not literally zero, but they're at the lowest level when you do existing home sales. They're at the same level they were during the great financial crisis, the worst of it. So there is no element of this that has the same impact that it used to have in the past. So I think it's a good thing. I think it's a good thing. And that's why as rates go higher, is there an element that knocks out small businesses? Yeah. But to be honest, it gets back to the point of the stubbornness that a lot of businesses have. Recessions are supposed to be cleansing events to get rid of the weak and allow the strong to get in. And sometimes for individuals that it was their dream to have a little hardware store or a little diner, they might be better off with it going out of business because they're sitting there and watching their, I'm making $10,000 and now I'm only making $8,000. I'm going to have to leave and move anyway, because the rent's going up. I just think the rate situation, it's not going to take the economy down. It's not as sensitive as it was before 2008. And there's a variety of other things that go through.
Speaker 2But if it does get to the point, like obviously the person it matters to is the government as they're rolling their debt over and higher and higher rates. And if it gets to the point where they're having to buy back that debt themselves, like that then affects everyone through debasement.
Speaker 1Well, when you say debasement, not if all they're doing is moving them. But if it gets to the point where they're having to buy back that debt themselves, like that then affects everyone through debasement.
Speaker 2But if they have to start buying back the bonds like
Speaker 1Japan. Again, as you go through this and you figure out the total sum of the assets is $900 trillion. So they're not having any trouble on this now because the rates haven't gone up that much. So far, we've done 100 basis point move in a year. We have this thing in the US that we pay attention to for good reason. Actually, two things. So there's the LEI, which is the leading economic indicator, which was negative for three years from 2022 to just turn. It's not positive yet. I think it's about to go positive, above zero. We've never not had a recession without that going below zero, and yet we've been below. We had an inverted yield curve. We didn't get a recession, magically enough. We took rates from zero to 5%, didn't get a recession. We have the financial debt curve. We had the financial debt curve. We had the financial conditions index. Rates have gone up 100 basis points. Financial conditions have gotten easier. So we're kind of in an environment, again, where if people want to believe that there'll be more printing, then we'll see it through money supply. But the reality is we've got a fiscal deficit of 6%, which means there's a transfer from the government who's borrowing money and basically, again, giving it back out. So we're already in the debasement thing. We've been in it before. It's just a call of liquification, transfer payments continue to grow. We keep giving money out. I don't think that's going to last forever, my own personal view, because I think entitlements are going to change in the coming years because of AI. But that's a view that's a little out there for people.
Speaker 2You say too many interesting things. I need to now ask you about entitlements, because when you say that's going to change, are they going to be forced to change, or why would AI change them?
Speaker 1So I do believe that when it comes to people's health, longevity is going to go through its exponential rate of growth. It's going to go through its exponential rate of growth. It's going to go through its exponential as well. So if you believe in that, then you have to go through the entitlements and separate the Social Security side and then the other side, Medicare, Medicaid, and what's going on. And the majority of health expenditures come in the final five days of your life. If nobody dies from disease and they die from old age, which is a far better way to die. And so let's assume the current people above their seven, 70 because of how old they are, they don't get another 70 years, they get an extra 10 years. Well, that's worth a lot of money. But more importantly, if they die from just old age, and that's it, well, that's a pretty great way to go. But the cost side and the burden on everyone else will go down dramatically. And I do believe that is going to happen if when humanoids come, and let's say a decade from now, they're able to live in the home and go through this. When you go through where the entitlements start to become a major issue, you're talking in 20, 32 and going beyond. So Social Security is a harder one for people to deal with, but the wealth of the country is enormous. And I do believe that in the next five years, people are underestimating the tax side that's going to go up dramatically. And this is not something to scare people with. If abundance actually happens, people have to start thinking about what will go on. A company like Anthropic has, I think, like 5,000 employees and they're worth 2, 3 trillion dollars. I want to say that again. 5,000 employees. The company's not even, I don't even know when they were incorporated, but it can't be more than six years ago. And their revenue per employee, like when you do the numbers, if that's what their value is, that means they're building in that next year, which is, I mean, there's people that have said publicly they'll be at a trillion dollars of revenue next year, which I don't believe in. But let's assume it's 300 billion. Okay, well, that's a lot of revenue. And if they don't have a lot of employees, the question is, shouldn't we be taxing them at some huge rate for their AI agents? And shouldn't there be taxation? Because the government's not receiving it from the individuals. So when the humanoids come and all this stuff, corporations will start paying taxes because labor has suffered relative to capital.
Speaker 2It's almost like a form of UBI.
Speaker 1Exactly. But it's happening through taxing the robots, which I believe will happen.
Speaker 2And it's probably a better outcome.
Speaker 1It's a better outcome. And I think it'll only happen. And I think that's something that both parties could agree on. Because I do believe that the one place that the merge has happened, Donald Trump won on trying to help the masses. He believed tariffs were good for regenerating the Midwest and the people that have been left out at the expense of the coastline. Well, I think in the Democratic Party, even though they win on the coastline, you can't run without kind of going towards people that are being impacted. And I think they want it taxed, people that have most of the money. Now, maybe it won't be the individuals because that becomes a state thing and people run from different states. But I think for corporations, it's a little bit easier if the data center thing, no one's going to like if their pay's been disrupted by AI agents and robots. And that's what the next five years is. What has happened is they have not hired people. And then the corporate ladder has stopped. So you can't go up any, any further. And the costs haven't changed inside the city. Data centers are to blame. Potentially, I think robots and agents will be taxed.
Speaker 2That makes sense to me. And it's also like without that, you're going to get huge social disruption. I think the companies will be happy to pay it.
Speaker 1I do, too. And that's another reason why at the end of the day, the government involvement, the forcing of it, I just think the growth for these companies, the multiple you have to, the more the government gets involved in your business. I don't think they're getting involved in businesses that are making $2 million. No, I think they're getting involved in businesses that are making trillions of dollars. Yeah. And so if that's the case, that is another redistribution that everyone would vote for because nobody, I mean, when you get to a corporation, it's like how many people actually make most of the money? It's very concentrated even inside a corporation. So it's, it's very challenging.
Speaker 2And the threat to the AI data center, companies, as an example, is it's, you pay the tax that's essentially like a UBI or you get people throwing Molotov cocktails at your data centers. You know, it's an easy choice. I have two more of the big questions I want to ask you. First of all, if this happens, we have huge deflationary effects from AI. There's huge disruption in the stock market. What happens to the sort of the debt-based fiat system that we live in today?
Speaker 1Nothing as long as its PEs collapsing. So again, if the stock prices don't go down fast, the problem with deflation, every I get asked it, the depression was not about prices going down. It was about them going down in a short amount of time. If prices in public stocks go down, that would matter because that's the only place people can invest. If tokenization happens and your money gets redistributed, then those assets deflate while the other ones go up. This is the whole beauty of crypto. Crypto is not big enough now to offset it, but over the course of a decade, that's how things change. The best way to think about it is we have a bear market in the US market right now. We have a lot of companies trading at 52-week lows. We have a lot of companies that are unchanged over the course of the last decade down. Why is that? Well, because they're in a bear market. The problem I don't think people understand is that's not causing any problems because the overall situation is better. That's what's going to happen. If the total sum of assets doesn't collapse, and the only reason it collapses is because of the synchronization of debt, which doesn't exist anymore. That's why the rate thing doesn't matter anymore. It used to be if the dominoes of the private sector having so much debt. Why did the great financial crisis happen? People were speculating on housing. Banks were speculating on housing, and corporations were speculating on. They were all speculating on housing. Now nobody's speculating with debt anymore. It's just not happening. Private credit is not a. Problem. The BDCs are trading at the correct level. The people are trapped. It's not the debt that's a problem. It's the liquidity that's a problem. The companies have rules. We're like, Blackstone's not going to give them their money back because this is the rule. You signed up for this. They got the money to give them back. That's why they were like, here's 500. We were writing checks to people. Now they're like, how many outflows we got? Screw them. It's fine. I'm not worried about the collapse in any way. I think this is going to be a deflationary in certain situations, which has happened. Actually, the whole world has said it happened since the great financial crisis until at the end of 2023, 2022. Every part of the world was basically unchanged since 2007, except for the United States of America. That's how it became 73, 74% of MSCI world. If people don't realize what happened, you were in a living example of what's going to happen. If crypto goes down, you're going to be in a living example of what's going to happen. If the whole world goes up, but nothing else goes up much, there's a rebalancing going on. That can happen in a very positive way. I think that's what's going to happen.
Speaker 2Okay. Then last question. You described how Bitcoin crypto is going to benefit massively from this agentic economy. Can we take crypto out for a second? Because I think I understand that part with stable coins. What role will Bitcoin play?
Speaker 1Bitcoin to me is the end result of this. I guess the best way to do this is to take people on a little bit of a journey. To make sure people understand, they've heard the gold standard. I'm sure the sophistication level of your audience, most of them must know that effectively, we eventually got off the gold standard. The Great Depression was one of the major reasons. When we went global and countries were figuring out how to trust each other, gold became the necessary. I trust you, you trust me, and we've got gold backing this up. Then we go into this new system where it's free for all. We're off the gold standard. Everyone's just like, we have this printing press. We learned in the Great Depression that the worst thing is if your hands are tied, we don't want that. Because then when everyone tries to sell at the same time and the world is interconnected, it's a fucking problem. Now, with the Great Financial Crisis, we just printed money and we had this helicopter thing. We're like, we'll shoot it out. They kind of tried it. They didn't really try it well. There were still votes. It's a tarp vote. It was a very messy thing. But then COVID happened and everyone around the globe went, let's just print from all directions. And that's what happened. And so we learned that we have that. The reason Bitcoin is important is because it gets us back to the point of we definitely need a gold standard in a world where we don't have to worry about that scenario because at some point to redistribute things, there has to be a standard. And Bitcoin is the standard. There would be no crypto except for the Bitcoin white paper. The Bitcoin white paper got it. So I've always said that Bitcoin is one of the things that is the most important thing that we all have to deal with in life. There are only three moats that I know of. Gold has been accepted by human beings. It has been accepted as the store of value. It's carried on for thousands of years. At some point, someone said, not seashells. This one's the one. Religion survives. It doesn't have Santa Claus, but they have an iPhone. It's a beautiful thing that you can have religion last for all this time. And Bitcoin is the third one. It's been chosen. It's a belief now. It's a belief that it is the digital asset store of value. So when you have a system that operates, you need something that is the bank, that is the trust for it to function. And so I believe Bitcoin is that. And then the other thing is it is a moat against time. So in a world of deflation, and I want to make sure Bitcoin is a moat against time. I want to make sure Bitcoin is a moat against time. People understand because this word deflation, everyone jumps to that means assets are going down. And I want to keep saying hyper competition is deflation. That's what it means. When innovation is so fast, it's driving down the cost to zero. And then everyone that can't afford to run their business at zero goes out of business and the debt that's associated with it. OK, but that's not happening. You're going to have hyper competition. So in a world of deflation where I have a business, I'm being outcompeted by AI. Then your business starts heading towards zero. Bitcoin doesn't have a value. It doesn't have cash flows. It doesn't have anything. So if you're losing over here, you're like, let me put it over here. That's what a store of value is. But it's a deflationary store of value. Gold standard was a deflationary asset. That's what you wanted to own during the Great Depression because you knew it was going to be worth something. Only later on in the fiat system did people go, I need to have gold because I'm going to inflate my way out. Stocks have been just as good as gold as an inflationary hedge. So in a deflationary hedge, you lose on all of your assets except for Bitcoin, probably gold as well. But I think Bitcoin is a better choice.
Speaker 2And so earlier in the show, we were talking about the $900 trillion of assets and Bitcoin's just under $2 trillion right now. How big does it have to become to become relevant? Like you said earlier, like it's not really a relevant figure to actually soak up all of that, that $900 trillion. How big does Bitcoin have to become?
Speaker 1I've said that I think by 2035, the crypto ecosystem, the total crypto market cap has to be at least $100 trillion, kind of in the vision I am. And that's assuming a bunch of, so I do everything in probabilities of three. So let's assume crypto doesn't grow and the fiat system just continues as it is. And we just keep printing money and the assets go up and crypto ends up still being $6 trillion in a decade. And it just grows by the amount of liquidity. That's one scenario. The second one is that I'm right about the deflationary side and people get frustrated with their fiat assets. There's a move to tokenization. That money moves into the guard rails because now it's all moving into the guard rails and Bitcoin benefits. And it probably stays 33% of the assets, meaning it goes down from 60 down and you have the ecosystem, the crypto rails that grow more. And then the third scenario is that I'm actually underestimating the agents moving away from all of this other stuff. And they're investing primarily in Bitcoin. And I think that's a smaller possibility, but I would put it equally at the same as the other. So I just come to $100 trillion is something that I think is valid. And I think Bitcoin will be at a minimum of third of that. So that means it's market cap in a decade in my mind of just, again, if it wasn't for AI, this would not happen. This is all about the deflationary pressures hurting the way the current $900 trillion looks at it at the same point of them being able to value it from the programmable side. And they're actually getting interested and I can feel it. So at 33 trillion, you can go through your home side and be like, okay, well, he's saying it's going to be worth 17 times where it is today. That's a good number to go off of. And I can live with that. And then you get to a million and everyone can go have their million party.
Speaker 2I'll take 33 trillion in 10 years time. That sounds good.
Speaker 1In 10 years, just got to be patient.
Speaker 2Jordy, this has been amazing. I've still got a thousand questions that I want to ask you, but we'll have to do it again sometime. Really appreciate you coming on the show and tell everyone where they can find your show or the work you do.
Speaker 1AI.22vresearch.com where they can start from my own LLC website, which is viscer-labs.com and they can find everything there, but they can also find me on LinkedIn, on X, Substack. I'm everywhere. You're everywhere.
Speaker 2I appreciate you, man. That was really good. Thanks, Danny. Thanks, Danny. Thanks, Jordy. Thanks, Jordy. Thanks, Dave. Thanks, Dave.
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