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Why Everyone is Giving Up on Crypto at EXACTLY The Wrong Time — Transcript

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0:00Crypto's about to enter the biggest move
0:01yet. I've had more conversations [music]
0:04from very important people in the
0:06trad-fi world, billionaires who are
0:08[music] really interested in it. Two of
0:10them in the last 10 days have both
0:12contacted me to get more details. They
0:14don't care about oil. They don't care
0:16about interest rates. The reason [music]
0:17they care now is crypto was not made for
0:19human beings. It was made for digital
0:21agents and for AI agents and that's
0:23what's coming now. By the time you
0:25[music] care about this, Micron will be
0:27up tenfold. The same thing's going to
0:28happen with crypto. What people have to
0:30understand,
0:31fundamentals will get rolling so fast
0:33because they'll go exponential because
0:35of agents [music] that you won't have
0:37time and by the time you hear the
0:39narrative, this the price has already
0:40moved dramatically.
0:43>> You said something I've been thinking
0:44about all week. You needed to see people
0:48that believe in it to stop believing in
0:50it, which seems backwards. Can you
0:51explain that?
0:52>> Yeah, and it goes back to my uh
0:55experience in the dot com bubble. So
0:58I moved back from Brazil in uh in 99 and
1:02I remember, you know, it's a surreal
1:04experience to leave a place where you're
1:06seeing grown men cry and they're in a
1:08depression and the currency's best just
1:11been devalued and all of emerging
1:13markets had been in two years of chaos.
1:15Then you come back to the US and I'm
1:18taking over a big trading book at Morgan
1:19Stanley and everyone's walking around
1:21talking about the internet stocks they
1:23own that have gone from two to a hundred
1:26and they're bragging about them and my
1:28high school friends, which were all blue
1:30collar kids are like, yeah, I'm trading
1:32my AOL in for a house and all these
1:35these kind of weird places. It blows up
1:38uh which is not shocking and uh
1:41it's like four years later
1:44after those same people
1:47were bragging about everything.
1:50They didn't even want to talk about it.
1:51They had stuff in their portfolios worth
1:53a penny that they still owned. It was,
1:55you know, all this stuff. You had all
1:57these businesses going
1:59out, but it was people that believed in
2:02greed
2:03that were the ones that uh
2:06basically were lost. And then you had
2:08the structural people
2:10and I would say the ideologues that were
2:12just frustrated and those were the
2:13innovators and those were the people um
2:16that uh that just believed, you know, it
2:18was going to happen. But here you were
2:20in 2004 and the reason 2004 is so
2:22important because it was it was still
2:24another
2:25three years until the iPhone came out.
2:27It was another three years until we got
2:28it. So that period between 2003 and 2007
2:32was just like, you know, death by a
2:34thousand paper cuts. The ecosystem got
2:36smaller. And in the crypto world, that's
2:39what I've basically felt is I've seen
2:41more and more I've gone out to dinner
2:42and people that were obviously very
2:45bullish on the space had done
2:47had done dats. They had been involved in
2:48all different levels.
2:50They didn't believe in even Bitcoin
2:51anymore. And I was on an interview
2:53yesterday and I would say the person is
2:54a Bitcoin maxi and just like I I don't I
2:58don't think it's going to happen
2:59anymore. And so those types of things
3:01for what I am, I don't care about any of
3:02the reasons people got involved for the
3:04first 16 years. What I care about is AI
3:06agents.
3:07>> Interesting. Has there has there been
3:09any big names other than the person you
3:10talked to yesterday that shocked you?
3:12I'm talking about whether it's uh the
3:14big money managers, names like that?
3:17>> You know, one of the reasons that anyone
3:20watching this who spends
3:22let's say
3:2390% of their talk with um
3:27with crypto, let's say zealots or crypto
3:30people and even the retail community,
3:33I've had more conversations from very
3:36important people in the trad fi world
3:38who are now asking me the really good
3:40questions.
3:42And they only want to talk to me because
3:44I am a macro person, so they know that
3:46I'm going to give them an answer that
3:48they can relate to. But the reason they
3:50care now is
3:52because the fundamentals are finally
3:54coming, meaning they can actually be
3:55like, so what does tokenization mean?
3:57Like, you know, Stan Druckenmiller
3:59invested in Hyperliquid. What what does
4:01that mean? Like, is he doing this? And
4:03so similar people to Stan are the ones
4:06that are calling me. And that means
4:08billionaires who are really interested
4:10in it. And I would say two of them in
4:12the last 10 days have both contacted me
4:15to get more details, including what does
4:17tokenization mean to the dollar? What
4:19does tokenization mean to the stock
4:20market? Things like that. So as long as
4:22the questions are coming in from people
4:23all of a sudden on the tradfi world that
4:25are experienced and I'm getting the
4:26other side where people I mean after the
4:28Fed rate
4:30hike, I got doom and gloomers everywhere
4:32in the crypto space going that's it. And
4:34I'm like no, this is what you want. This
4:36is the bull market can't be based on
4:37liquidity, guys. It can't be. So.
4:40>> Yeah, it's it's just an interesting
4:41time. I mean what I find so interesting
4:43about the setup is we have this move
4:45where we haven't seen something like
4:46this in Bitcoin in nearly three years
4:48when we went from 60k to 69k. You had
4:52this this big tweet and you said this
4:53has happened what three times in a
4:55decade for Bitcoin is seven sigma move.
4:57Can you break down the significance of
4:59that especially for people that haven't
5:00heard the word sigma before and they're
5:02like what is he just is he is he trying
5:04to make a bullish case? Is he trying to
5:06have us you know kind of FOMO in? Why is
5:08this so significant and when has this
5:10happened in history?
5:11>> First of all,
5:13for people who
5:15don't know what talking in sigmas means,
5:18it's
5:19something everyone should understand and
5:21you got to go back to your statistics
5:23class. But think of it as
5:26when you go to get a physical and I know
5:29a lot of people watching this probably
5:30haven't done that yet. But when you go
5:31get a physical or you go into let's
5:34let's do this. You're sick and you go
5:36into the hospital, they immediately do
5:37your blood pressure.
5:39And let's assume your blood pressure is
5:41one 120 over 80 and they're like okay,
5:43you're fine.
5:44But then you're like well normally it's
5:46105 over 70. That that's actually kind
5:49of high. You have to know the baseline.
5:51So what sigmas allow you to do is take
5:54in the most recent baseline which is
5:56measured through volatility and say how
5:58big is this move.
6:00So at the time the reason it was a seven
6:03sigma move is because the trailing
6:0560-day volatility on Bitcoin was very
6:08low. So if you get a, you know, let's
6:11say a a a a 10% move and the daily
6:13volatility has been one and a half,
6:16well, that's going to get you close to a
6:17seven standard deviation move or a
6:19seven-sigma move. And so that means
6:21relative to how it's been trading, it's
6:23a big move. The reason it was so
6:24important and the reason that for me
6:26um it was not just that signal, it was
6:29combined with other signals. One was it
6:32jumped above the 200-day moving average.
6:33This the next one was the 200-day moving
6:36average was like two days away from
6:37turning upward. And that's what I I that
6:39that's like a combination technical
6:41signal that I'll look for. The third
6:43thing was uh that we had gone through a
6:47period of bad news. We had a hack. We
6:50had um uh we had all these fears
6:53happening in AI trade. You had all the
6:55AI trade volatility exploded. There were
6:58a variety of things that had gone on in
7:00the space. The Clarity Act had dropped
7:02below 20% for the first time.
7:05And yet it had hung in there and it was
7:07staying in that 65 area. It hadn't gone
7:10to new lows. And so whenever I see it
7:13handling bad news well, that just says
7:16the sellers are exhausted. That's all.
7:17And so then when you get a move that
7:19jumps higher, that's confirmation that
7:21we've run out of sellers to me. So it's
7:23a combination of we weren't getting a
7:25lot of volatility, we weren't getting
7:26any movement on bad news, and then all
7:28of a sudden we got good news, which
7:30wasn't technically really good news. It
7:32was another one of these liquidity
7:34things, but it showed a desperation that
7:36people ain't probably didn't want to be
7:38shorted anymore. And for the retail
7:40crowd that's momentum driven that wanted
7:42to jump in, they took an opportunity to
7:44put some chips on the table. So I think
7:45it was the confluence of those things.
7:47>> Gosh, it's the 2019 move, right when I
7:49saw the day it happened, I just thought
7:51of 2019 and that was like the only
7:52similar time I had seen something like
7:54that when Bitcoin [clears throat] jumped
7:55from 3K to 4,500 or 5K and the move was
7:58so big that people just started coming
8:00up with narratives after, right? Like
8:01you named five of why Bitcoin could have
8:03just had this reversal, but back then it
8:04was like uh Bitcoin went up. It It could
8:07be this and then it went up more and
8:08we're like it has to be that and people
8:09start throwing things. Since you have
8:11such a vast experience in markets and in
8:14the macro world and now applying a lot
8:16of that here, do you think it's helpful
8:18to try to diagnose the move and say it
8:21happened because the the macro situation
8:23got better. It happened because the Fed
8:25did this. It happened because we're
8:26about the 200 day or is it better to
8:28just say
8:29you know it it could be a variety of
8:31these. Like do you think it's important
8:32to diagnose that driver?
8:35>> Price leads leads narrative. So
8:38when when prices move, people come up
8:40with they come up with a story they want
8:42to come up with.
8:44I mean you're asking a question that
8:46I've always answered, you know, for
8:48people and I think it's because I spent
8:49so much time listening and talking to
8:52Paul Tudor Jones over the years that we
8:53agree on this that
8:56once a move happens, then people start
8:59jumping on the reasons for it.
9:01I am a secular macro trader. So I look
9:05for secular stories that I think are in
9:07a a permeable market and then the way I
9:11was trained or the way I trained myself
9:13was to look for moves where we're about
9:16to enter the biggest move yet. Crypto's
9:18about to enter the biggest move yet. Why
9:20do I say that with with certainty?
9:22Because 2021 2022 needed to happen
9:25first.
9:27Every other, you know, four year cycle
9:29or whatever was not like 21 and 22. 21
9:3122 was a very very powerful
9:36let's say cleansing event.
9:38Since 2022 there's been a tremendous
9:40amount of cleansing that reminds me of
9:42the dot com bubble.
9:43When you have a new innovation, it takes
9:46a while to get it to the point where the
9:47speculation takes off. If you go back to
9:49when the internet
9:51started
9:53and really take 1994 as the beginning
9:55stage,
9:57the app store didn't come until 2009.
9:59Well that took five years and I equate
10:01AI agents to the app store. So 15 years
10:04is a long time. What happens during the
10:0615 years?
10:07Well you get the speculation. They don't
10:09know how to value a new innovation. So
10:11the way we valued Amazon back in '96
10:13with eyeballs, clicks, some stupid
10:15metric that we never used before to
10:17value things that could explain why a
10:19company that had no
10:20no fundamentals could trade at a high
10:23level. Now Amazon collapsed in the dot
10:25com bubble, but it eventually came back.
10:28But even then it never it didn't get
10:29below 100 PE I think until 2014
10:33or 15. Um so it stayed this insanely you
10:37had to find different valuations. You
10:39had to Then they came up with all these
10:40new terms. It was SaaS. It was all these
10:42different things. So
10:44um if you go back to crypto and you
10:46think about where we are and you take
10:47the Bitcoin white paper as the starting
10:49point, we're about the same time. We've
10:51gone through a similar thing. We didn't
10:52know how to value it. So the dot com
10:54bubble I've equated to you build all
10:57this infrastructure. You usually have a
11:00debt problem. For crypto they built all
11:02this infrastructure. It wasn't a debt
11:04issue, but it was a VC tons of
11:06ridiculous capital flew in and you
11:09needed the valuations to go back down.
11:10And so now you're at a point where the
11:12smart people I talk to that have run
11:14major companies for Fortune 500
11:16companies that are in the space
11:19that are around my age, they're looking
11:21for distressed assets to buy from
11:22younger people that have been basically
11:25they're bleeding to death. And so that
11:27is a good sign. That means that the
11:29innovation is real. We've gotten rid of
11:32the speculation. And like I say, this
11:34isn't about liquidity. I don't agree
11:36with any of the people including some of
11:38the people that came from the macro
11:39world that you know I know very well. I
11:41don't agree with this being about
11:43liquidity. All innovations start about
11:45liquidity, but eventually to actually
11:47get to the size that they need to be, it
11:48has to be about fundamentals. And tech
11:51growth companies, innovation eventually,
11:53they don't care about oil. They don't
11:55care about interest rates. What they
11:56care about is a secular growth story and
11:58that's where I think we're going to be
11:59for crypto for the next five to 10
12:00years.
12:01>> This is good. I want to I want to unpack
12:03this because as you said it's for the
12:05first decade, call it a decade, Bitcoin
12:08has been a liquidity trade. I mean that
12:09is people point to the headline. They
12:11say money printing, it's this you slap
12:13on their it's a liquidity trade. You
12:16think it can't remain just liquidity
12:18trade.
12:19Can you expand on that on why that's so
12:20important? You kind of touched on it
12:22there, but like there there's people
12:23right now that are scratching their
12:23head, they're going what it's it's
12:25that's not going to matter anymore or
12:26that shouldn't be the driver?
12:27>> At some point, if you're going to
12:29continue to grow at a fast pace,
12:31size matters.
12:33And when Bitcoin gets up to a $2
12:36trillion valuation
12:38and the world's $900 trillion, the
12:41people who own the 900 trillion, of
12:42which the only way I can make an
12:44argument of Bitcoin going up to a
12:45million is to say, well, then we're
12:47going to have to have a $100 million
12:49market $100 trillion market cap for
12:51crypto.
12:53The only way to get to a $100 trillion
12:54market cap is not by global liquidity
12:57increasing by 5% a year because we need
12:59people from the 900 trillion to go, I
13:01believe in that. Well, the ideologues
13:04who funded this, they've sold out or
13:06they've sold most of it. They've
13:07rebalanced. They've gone into AI. So we
13:09need the new buyers to come and putting
13:11a 1% position in your portfolio for, you
13:14know, wealth management is not going to
13:16do it. We actually need pension funds to
13:18do it. We need people that own the 900
13:20trillion to do it. And the only way for
13:22that to truly happen is for there there
13:25to be trust and for there to be a
13:26fundamental need for it. It can't be
13:28about liquidity. You can go from a zero
13:31asset to 2 trillion when there's a $900
13:33trillion thing, but if you're going to
13:36have a bull market and get to $100
13:37trillion in the ecosystem,
13:40there needs to be a fundamental reason
13:41because Bitcoin's not going to be 100
13:42trillion, gold's not 100 trillion. So if
13:45if if the store of value argument for
13:48people is Bitcoin, nobody I talk to
13:50who's above the age of 70 believes in
13:52Bitcoin. It's very seldom that I find
13:54one. So if they don't believe in it, you
13:56have to convince them to buy it. The
13:57only way they'll be convinced is what
13:59you said before. There needs to be a
14:01narrative that they can actually hold in
14:03their hands and that has to do with two
14:04things. One is their fiat assets aren't
14:07working anymore. Well, if liquidity is
14:09driving their fiat assets, that's not
14:10going to work because those assets keep
14:12going higher. What you need is the fiat
14:14assets to not be working, to have a
14:16bridge where they can convert it
14:19and not have to be a brainiac to figure
14:21out how to open a wallet. So it needs to
14:22be instantaneous, which means we need AI
14:25agents to do the convergence from them.
14:27We need tokenization to allow them to
14:29switch it over.
14:30And that's what's happening. So this
14:32can't happen because of liquidity. The
14:33first phase of any great innovation, in
14:36fact, I used an analogy today in a in a
14:38post. I traveled to China for 1 month a
14:41year for the beginning in the mid 2000s
14:43and all the way into 2013. I got to
14:46travel to a ghost city.
14:48I got to see what it looked like and I
14:50got to understand. The liquidity part is
14:52what drives a ghost city. Right now, as
14:55far as I'm concerned, crypto is a ghost
14:57city. It is not a place where activity
14:59happens and where the economy goes on.
15:01It is an odd lot. But
15:04Stripe is making investments. Robin
15:06Hood's making investments. They're all
15:07making investments, which means
15:09the people are finally starting to come.
15:11But crypto was not made for human
15:13beings. It was made for digital agents
15:16and for AI agents. And that's what's
15:17coming now. And so when you build a
15:20ghost city, it's all about when are the
15:21people going to come and when they going
15:22to build an economy. And in China, a lot
15:24of those cities nobody ever came to.
15:26Right now, what's going to happen is
15:27like the App Store allowed Amazon and
15:29Uber and Airbnb and all the things that
15:31we use today, without the App Store,
15:33there's none of those.
15:34AI agents will allow crypto to finally
15:36go through its stage. So that why we're
15:37at the beginning stages of the ecosystem
15:39growing and the ghost city being the
15:41ghost city being filled by the economic
15:42actors.
15:43>> That's incredible. I want to get into
15:45the the AI agent uh the AI agent kind of
15:47powering this and and and where that
15:49goes. But first, since I have you,
15:51you're the macro guy. You've lived in
15:52this world. I do want to get your take
15:54cuz this is music to my ears. I don't
15:55have to listen now to Kevin Warsh and
15:57focus on if they're raising rates, the
15:59liquidity trade, and break down what's
16:01he going to say. But I do want to get
16:02your take on that.
16:04The Fed it seems like are giving much
16:05less clear kind of signals about what
16:07they're doing. They're like some people
16:09say it's still money printing, but it's
16:11not the same money printing we used to
16:12have.
16:13What's what's your general take on on
16:15the direction the Fed is going and
16:17especially as Kevin Warsh uh starts his
16:19new era versus Jerome Powell.
16:21>> [snorts]
16:21>> Everyone should stop listening to the
16:22Fed, stop paying attention to oil and
16:24stop paying attention to rates. Um
16:27I I don't know how to I don't I don't
16:28know how people have didn't learn their
16:30lesson on this. Um
16:33we had effectively a massive
16:35bear market in the economy um
16:38from 2009 to let's say 19 and then we
16:42went into COVID.
16:44So take those two periods, take the
16:47Great Financial Crisis and take COVID
16:49and go look at what happened to the Mag
16:517. How did the Mag 7 go up with all of
16:54the chaos and all of everything?
16:56Everyone comes up with this magical
16:57story. It was QE, but that's not the
16:59case. Most S&P 500 companies were in a
17:01depression or recession.
17:03Home builders, auto companies, airline
17:05You just go through it. These companies
17:07did not grow. The majority of S&P
17:09countries companies did not grow and the
17:11reason we know that is because the Mag 7
17:12became
17:1330% of the S&P 500. So we just witnessed
17:17this whole thing happen. The reason I
17:18say that the Fed doesn't matter anymore
17:21is because the economy is driven by AI,
17:23which is not AI which is not interest
17:25rate sensitive. Inflation is has a
17:27deflationary force coming over the next
17:29year, two years that is beyond anything
17:30we've ever seen before. We're seeing
17:32that now with agent swarms. So to have
17:35this many digital agents happening, the
17:37Navier-Stokes problem which was just
17:39solved that people probably heard about
17:41if they read through the fact that
17:42humanity would be gone soon, if they
17:44read the other part which is solve the
17:45math problem that had been around for
17:47before Einstein,
17:49they would realize we now have agent
17:51swarms.
17:52Groups of agents that work 24/7 and can
17:55solve math problems that we as humans
17:56couldn't solve and hack into things that
17:59we as humans developed a safety net for
18:01on some of the biggest things in the
18:02world. So clearly humans are not that
18:04bright and the problem is we're sitting
18:06there talking about oil prices. Oil is
18:09lower than it was when I was in China in
18:112007. I want to re-emphasize that to
18:14people. Oil is lower in price than it
18:16was at $110 Brent when I was in China in
18:202007,
18:21But the S&P 500 is up, I don't know, 200
18:24300 something percent. The value of
18:27people's assets is up three times. So
18:31how can oil matter in an in a global
18:34economy this size when it's the same
18:36price that it was back then? How can
18:38rates matter when everyone has a
18:40freaking home in the US locked in
18:42mortgage that has one at three and
18:44change? Why do rates matter anymore? If
18:47anything, the economy's run by the
18:48billionaires. We know that. The
18:50billionaires benefit from rates going
18:51higher. This is not the same economy and
18:53that's the problem is we get these
18:55people rolling out these things like
18:57tariffs are going to take down the
18:59economy. We're going to have a
18:59recession. Oh, the Fed rate hikes of 500
19:02basis points and inflation at 10% is
19:04going to cause a recession. How did we
19:06avoid a recession in 2022, but we're
19:09going to have one now or there's we
19:11should be scared of rates? Earnings are
19:13going up 30%. This is all just a joke of
19:16people
19:17choosing to look at a world before AI to
19:19answer a world that's in AI.
19:22>> I love it. I love it. Yeah, I don't even
19:24I mean, I was going to ask you too about
19:25your thoughts on gold and gold
19:26performing well earlier this year and
19:28Bitcoin didn't participate, but I I like
19:29that narrative way more. Now I don't
19:31have to kind of care about bullish rate
19:33hike or this or that or whatever the
19:35hell Kevin Warsh comes out with. I mean,
19:37I'm with you. I don't think it matters.
19:39>> But let me let me rephrase. Does it
19:40affect the way the people managing money
19:43think? Yeah. And so the S&P 500 is
19:45unchanged since June. It's just gone
19:47sideways. Um, do I think that people
19:49should be more impressed that, hey,
19:51let's where was oil on June 25th? And I
19:54looked at this today. On June 25th, oil
19:57was about 80 No,
20:00it was 70 some odd dollars. Now it's 100
20:02plus.
20:04And the S&P's unchanged. Where were
20:0510-year rates? Well, they were at 4.30
20:07and now they're 5%, but the S&P's
20:10unchanged. What would happen if rates
20:13didn't stop the S&P from going You know,
20:15it it stopped it from going up, but it
20:17didn't make it go down. What do you
20:19think is going to happen if 10-year
20:20rates fall 20 basis points and oil falls
20:23cuz we've all learned
20:25even if 10 year rates are going to 6%
20:28there'll probably be a time where they
20:30go down 20 basis points in a couple of
20:31weeks to a month. We know that that kind
20:33of happens with markets. So if you can't
20:36knock something down with bad news, like
20:38I said with Bitcoin, that probably means
20:40there's good news coming in terms of
20:42prices. And oh, by the way, during that
20:44time period, the Mag 7 is like 1% below
20:47below the all-time highs. And as of
20:48today, seven of the eight
20:51the important Mag 8 names, I include
20:52Oracle in there because it's an AI name,
20:55seven of the eight are below the 50-day
20:57moving average. There's only been, I
20:58think
20:59three days this year that all eight were
21:01above the 50-day moving average, and yet
21:03we have seven of the eight up there
21:05right now. And if we can find a way for
21:07their this to continue for another few
21:09days handling the bad news, we're
21:11getting a very similar scenario to
21:13Bitcoin, which is the global assets are
21:15starting to move higher, and it probably
21:17means all the bad news is built in, and
21:19earnings are still growing, and we're
21:21going into an earnings season right in
21:22front of the midterms.
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22:11Let's get back to the show. Let's get
22:13back to where we're going as crypto goes
22:15through this transition, as more people
22:17buy into this or realize it, wake up to
22:18this idea that uh that this is not a
22:20liquidity trade anymore.
22:22The first phase being an infrastructure,
22:24you use that China ghost uh ghost
22:26analogy. So we have the infrastructure
22:27now built out.
22:29What is going to be the the economic
22:31activity that starts to spring up now
22:32that we have agents that can
22:34you know we have I have myself what 30
22:37agents right here on my screen. One of
22:39them pings me. My emails are cleared
22:40out. This one you know stops the spam
22:42emails. This one tells me my calendar.
22:44This one does this and they're kind of
22:45doing things all night sometimes things
22:47I don't want.
22:48But what what's the economic activity
22:50that starts to uh starts to happen here
22:52now that the infrastructure is built out
22:53specifically as it relates to Bitcoin
22:54and crypto?
22:55>> It's consumer agents. So everything you
22:57mentioned is not a consumer agent. It's
22:59a personal agent. It's doing things to
23:02to save you time.
23:04Um Meta last week released or brought to
23:07the market its personal assistant AI.
23:10Instinct AI is a private company which
23:14was looking to be valued at 2 and 1/2
23:15billion and now they're being valued at
23:1710 billion. We've had Stripe up and down
23:19the consumer payment stack buying
23:21companies or trying to buy companies
23:23including Open Router. Um you have a a
23:27every indication and everything
23:29happening that we're going to have
23:30agents. The whole point about the agent
23:32swarm
23:33which is really important um everyone by
23:36now knows who Leopold Aschenbrenner is.
23:39Um
23:40I don't think everyone has
23:42gone back and read his paper though
23:44which is 165 pages long.
23:47On page 71 of situational awareness, if
23:51you go to the figure that's on that
23:52page,
23:54you will see when we reach the point of
23:56auto
23:58research agents meaning autonomous AI
24:01researchers,
24:03we are hitting
24:05absolutely the parabolic the parabolic
24:07point of AI. That's where everything
24:08starts to speed up. That's where cancer
24:10cures happen. That's where we start
24:12solving all of the great breakthroughs
24:14that are necessary for science
24:17which is why the math problem that was
24:18solved in Navier Stokes is so important.
24:21There's rumors that between them and
24:22Anthropic they've already solved three
24:24of them. So this is now reached a point
24:27that he wrote about and he expected this
24:29to happen in 2027, and I remind people
24:31he wrote this in 2024. So the timeline's
24:34actually going faster, which means
24:37consumer agents, which are far easier
24:39than what we're talking about in this,
24:41are going to start to proliferate. And
24:44this is why having these personal
24:45assistants, because the one thing I
24:47believe about crypto that that
24:50I haven't heard people say
24:52uh and I have been as I've become more
24:54part of it, I've realized that my macro
24:56brain is needed in this space um because
24:59there's a very polarized environment
25:01just like there is in
25:03in equities. Um you have macro managers
25:06and then you have fundamental managers.
25:08Crypto is full of macro people. Those
25:11are the Bitcoin maxis, and then you have
25:12the fundamental people. Those are the
25:14Ethereum and Solana and all the
25:16ecosystem, and never should the two
25:18merge. Well, I've always been a merge
25:20guy. I'm a big believer in the merge. Um
25:23the agents are necessary to allow
25:27any individual at any age to open a
25:30wallet and start being able to transact
25:33over
25:34the blockchain.
25:35Never is a 70-year-old person going to
25:39go through the pain it takes still to
25:41this day to open
25:42the Robin Hood chain wallet. It's not
25:44going to happen. I, someone who uses AI
25:46all day long, tried to get it going
25:48quickly, and it was a pain in the ass,
25:51and I give it credit for delaying are
25:52you say who you say you are. You have to
25:54upload this again, you have to do this,
25:55and I was like, what the hell? So we
25:58need agents. Like consumer agents are
26:00necessary, and if you go read, which if
26:02you watch my video, which I do each
26:04week, one of the things I'm showing this
26:06week is an interview with people using
26:09Instinct AI and just showing what it can
26:12do. It can get you a visa to get into
26:15Brazil. It can all these different
26:18things including paying. And we need to
26:21have the payment service going. We need
26:23it to be tapping all these uh all these
26:25different things. Delta is being accused
26:28as an airline of using AI agents to
26:31inflate the cost of price based on
26:33getting to know the user and what
26:35they're able to pay. So Delta has tried
26:37to use AI agents to guess based on
26:41really good information what the person
26:43is able to pay. And I only found out
26:45about this by someone telling me we have
26:47a problem that I tried to get a Delta
26:49ticket and I came back an hour later the
26:51price was up $130 and it how could that
26:54happen? And I said well clearly there's
26:56an AI agent involved. You need to have
26:57your AI agent go against their AI agent.
27:00Then you'll get the best price because
27:02then it's a fair fight. It's not a fair
27:04fight when you're going through it
27:05because clearly you've given them
27:06information you didn't realize even if
27:08it's just on once you sign in and they
27:10know who you are and know you fly
27:11business or first all the time. So we
27:14need agents and that's why I can't say
27:16this loud enough to people the
27:17fundamental in the macro the way that
27:19they're going to mix together the way
27:20they mixed in the world that I'm more
27:21familiar with is when equity started to
27:24drive everything. The ecosystem needs to
27:26grow to benefit Bitcoin. Bitcoin needed
27:29to come first to allow the ecosystem to
27:31benefit from Bitcoin and that's what had
27:34to happen and that's the chain of
27:35events. But right now it needs to be
27:36carried in my opinion by the ecosystem.
27:39>> Can you can you explain or make the bull
27:42case for why agents will choose Bitcoin
27:45and crypto instead of dollars? Cuz that
27:46was the connection I made pretty quick
27:48and I've heard Brian Armstrong talk
27:49about it a lot. He had a great case for
27:51it when he was on David Sacks's podcast.
27:53I think Coinbase is actually really
27:54early to try and get agents set up and
27:56be able to use wallets and send money.
27:58You need to be able to send 24/7. They
28:01need to be able to send money to each
28:02other, right? Money in different parts
28:04of the world. We all know how hard it is
28:05to get paid if someone lives outside of
28:07the country and the routing and
28:09everything else. So that makes sense.
28:10Then again I've seen some really smart
28:13AI people say well I'll just give my
28:15credit card details to this agent or
28:16I'll do this. So I've seen both cases.
28:19I've actually seen some strong cases be
28:20made that kind of made me doubt like I
28:22don't know maybe they'll use dollars.
28:25Why do you think it's going to be
28:26Bitcoin and stable coins instead though?
28:28>> Well first of all I I think it's
28:29definitely going to be stable coins for
28:31now. I think Bitcoin will be
28:33on uh
28:34like if you're going to wire
28:36a million dollars to someone, um that is
28:40a different wire than if you're going to
28:42wire $100 to someone.
28:44Um $100 you can do it in Venmo. If
28:46you're going to do a million dollars,
28:48you can't do it on Venmo for obvious
28:49reasons. Um so the size of it is going
28:53to be Bitcoin. It'll be something that
28:55people trust and it'll be collateral
28:56that they know they're getting as
28:58opposed to getting something and then
29:00going to It's all about the speed for me
29:02and it's about the um the ability of
29:04using the internet to get the best price
29:07or the lowest price, which means the
29:09least friction. At the end of the day,
29:11the middlemen are always going to be
29:12involved in the dollar. If Visa's
29:14involved,
29:16they've got a business to run. They've
29:17got shareholders. They can't reduce
29:18their costs to zero.
29:20AI will make everything deflationary. AI
29:22agents will make everything
29:23deflationary. It will be a race towards
29:25the cheapest price. That thing I gave
29:26about Delta,
29:29if you're a human being and you go to
29:30the Delta site, the amount of time it
29:32takes you to go there, go through the
29:34process, an AI agent has that done and
29:36has checked 17 other airlines to get the
29:39best price and has driven the price to
29:40zero before you can even get through the
29:42freaking internet. The dollar is no
29:44different. There's no way if you're
29:46traveling to Japan and they go, well, we
29:48need you to pay us in the end. Oh, okay.
29:51And this just goes for anything. If you
29:52want to buy a coffee
29:54in Manhattan, you can buy it with stable
29:56coins. You might have to convert it to
29:57dollars and go right in. The dollar only
30:00needs to be involved right now because
30:02the businesses aren't going through it.
30:03Eventually, what I think will happen is
30:05agents are going to want to deal with
30:06agents. They're not going to want to
30:07deal with the middlemen. And so once
30:09everything becomes agent to agent and
30:11that's where the cost gets the lowest,
30:14then the users will do it. I remember my
30:17stepfather didn't use Uber for like
30:19seven years. And I was sitting there
30:22going, how are you not using Uber, at
30:25least trying it?
30:26That friction is what makes crypto and
30:29the conversation you're saying more
30:31likely to happen. This is why agents
30:33change the whole thing. If you could
30:35just say into your phone, hey, I want
30:37you to get me a reservation at so-and-so
30:39tonight for 7:00. I can only do it
30:42tonight if it's 7:00. What I want you to
30:44do, if that one's not there, book it at
30:46another one, but keep on the waitlist
30:48here and keep trying all day long, maybe
30:50something will cancel. You don't have
30:51time to do that.
30:53An AI agent does, and an AI agent will
30:55keep doing it. So we're arbitraging
30:57everything where we just give it out. So
30:59all of those different things I said,
31:01and that's why the video, if you watch a
31:02video with Instinct AI, it'll start to
31:04make more sense. The agents are just
31:07doing 24/7 anything you want. They never
31:10forget, they just keep going. And even
31:12if it's something it takes a week, stay
31:13on StubHub. I want you to find Nick
31:15tickets for game whatever. I want you to
31:17kind of go through and as soon as one of
31:19them goes on there at a lower price,
31:20just buy it. Whatever the case is, you
31:23can't do that in the real world. And so
31:25people that use agents right away are
31:27going to be saving more money and
31:29they're going to be saving time and
31:30they're going to tell their friends. And
31:31younger people will adopt this first,
31:33but eventually over time those kids will
31:35tell their grandparents, they'll tell
31:36their stepfathers, they'll tell their
31:37fathers and mothers and they'll all
31:38start using it because it's easy to just
31:41say into your phone to do it. And as
31:43everyone said, well, it's very
31:44dangerous. What what And I'm like, well,
31:46that's why I said Venmo, you're only
31:48setting up when you do Venmo you can
31:49only do it a certain amount. That's the
31:51way everything will be in the wallets.
31:52It'll be the maximum you guys have
31:54access to is 100 bucks. The maximum you
31:56have access to is $2,000 whatever it is.
31:58But there'll be some limit on a wallet
32:00that you're using for certain
32:01transactions. And then if you want an
32:03agent to do something better, it'll take
32:05more time. But what people don't
32:07understand is the way people invest in
32:08things is once these fundamentals start
32:10showing up and once 10 people are using
32:13it and that turns into 1,000 and turns
32:15into 10,000, you have to go back and
32:17read the papers that I wrote in May of
32:20last year on inference.
32:21That was during the end of the tariff
32:24thing when stocks were rallying. The
32:26smartest people in the world at hedge
32:28funds that I visited every day wanted to
32:30hear nothing about inference. And I
32:31remember saying, do you even know what
32:33inference is? We don't have time for
32:34this. We're worried about tariffs, we're
32:36worried through I'm I'm
32:37by the time you care about this, Micron
32:39will be up tenfold. The same thing is
32:40going to happen with crypto. What people
32:42have to understand,
32:43this will get, fundamentals will get
32:45rolling so fast because they'll go
32:47exponential because of agents that you
32:50won't have time and by the time you hear
32:52the narrative, this the price has
32:53already moved dramatically.
32:55>> It is wild to me to over I don't know if
32:57it's in the past month or two, the
32:59agents that I've been using, GrokBot
33:01specifically, it used to be kind of
33:03painful sometimes. You you tell it to
33:05check something as you said, do this for
33:07a week and and don't stop. Sometimes it
33:08would do it for a day and give up or
33:09like you would create this task and do
33:11Now it thinks of those before I even
33:13tell it. Like I know we're not on RSI
33:15yet, but somehow they are learning and
33:17remembering everything. I'm not having
33:19to say, hey, remember this markdown file
33:21I sent you. It just knows and then it
33:22talks to the other agent and says, hey
33:23man, this is what Luke just told me. I
33:25can see the text. It's like this is
33:27something weird is is going on.
33:29>> No, no, no. I I mean
33:32I have a bunch of um when GrokBot came
33:35out, I did uh almost a third of the
33:37video I did that week was on the
33:40importance of it as a democratizing
33:42easiness to do, but in a form that
33:44people
33:45liked. It was kind of like a video game.
33:47It was kind of like text messaging. It
33:49was very easy for people to understand.
33:50So I gave people prompts and I'm like,
33:52if you just do this, this will set your
33:54your your chief of staff up and you have
33:56to think about it. So like if I right
33:59now set into GrokBot and went on on on
34:02text message and said, hey uh Jarvis is
34:06my chief of staff, will you do me a
34:08favor and go to the agents that are in
34:09charge of all of my technical portfolio
34:12and get me the the the names that
34:13they've seen over the last three days
34:15that were showing off great technical
34:17patterns and tell me what the stock has
34:18done the last four days. And while we're
34:20talking here, he'll go out to that
34:22agent. The agent will go out, get the
34:23prices, go through the thing, and then
34:25it'll give me the response and it'll
34:27take two minutes, but the key thing is
34:30we're talking and I could do that on
34:31there. And that's what I don't think
34:32people realize is you have to get used
34:34to using agents. GrokBot is a necessity
34:37to get used to using them because it'll
34:40want you to get it'll make you want the
34:42meta personal AI assistant. It'll want
34:44you to get instinct AI on your phone
34:46because once you realize and to do this
34:49this week, I had to transfer my New
34:50Jersey license into a New York license.
34:52It's a very painful process. I used AI
34:55to figure out how to get around the DMV.
34:59And this is a true story, but I
35:00literally went in and the DMV said
35:03there's no appointments for another
35:04month.
35:05And I went into AI and I said they're
35:07telling me there's no appointments for a
35:09month. Can you go into Reddit and
35:11through X and find anyone that has
35:12mentioned this problem and see a
35:14workaround for me to go through it?
35:16It took, I'm kidding you, 30 seconds and
35:19it said yeah, what it says is people
35:21have had success just booking. Now that
35:23you've done the work that got you to
35:25this stage, a lot of people run into the
35:27same problem. Go to this particular one,
35:30just sign up and go in. That was the
35:32[clears throat] day I signed up for the
35:33next day. I went in yesterday. It took
35:3410 minutes and I was gone. People don't
35:36realize that you allow agents to do that
35:38for you. That was not one where I I
35:40allowed an agent to do it, but that's
35:42the way that I use AI now. And the more
35:44that you do that thing where you send it
35:45off to figure it out and it goes to
35:47Reddit and you get to see all of the
35:48information, that kind of stuff is
35:50happening already and I think people
35:51have to start using it to just get their
35:53brains ready to think that way.
35:54>> Sure, sure, sure.
35:56I want to go back to agents and and
35:58transacting in stable coins. My trader
36:00brain kind of can't not try to
36:02investigate this a little bit further.
36:03Who captures the value there when we
36:05have millions or
36:07pretty soon probably hundreds of
36:08millions of agents? I don't I don't even
36:10know if there's a way to accurately
36:11count how many agents we have right now,
36:13but I do know we will get to a point
36:14where there's hundreds of millions of
36:16agents transacting in stable coins. Who
36:18captures the value there? I mean, that's
36:20already a tough question in crypto. Like
36:21how do you
36:22profit or how do you invest in the
36:24proliferation and and the expansion of
36:26stable coins? But as it relates to to
36:29agents using them, is it going to be the
36:30the AI model provide is it the the open
36:33AI and the anthropic of the world? Like
36:35is it who do you think wins there? Where
36:37does the value accrue is actually
36:39probably the better better way to
36:40approach that.
36:41>> So it's It's to go across the stack. So
36:44the model companies that you use,
36:46whatever it is, will benefit. The
36:48compute will benefit. So the
36:50infrastructure side of things. When you
36:52get into the actual agents now doing
36:54things,
36:55let's assume that we fast forward and
36:57everything is being done with stable
36:59coins. And let's just say, well
37:01somewhere within there Stripe is taking
37:02a
37:03a toll collection in there. And then
37:06let's use the Robin Hood chain,
37:07Arbitrum. So you get a layer a layer two
37:11app on top of Ethereum is benefiting.
37:14>> Mhm.
37:14>> My [clears throat] belief is that what
37:16people can't comprehend,
37:19which they've had trouble with, if you
37:21go back to what Google said
37:24in their earnings report in April of
37:27last year,
37:28Sundar Pichai got on stage and he said
37:32our token
37:35on our cloud on on Google Cloud is up
37:38and I I I think it was eight times what
37:40it was from the prior prior year. And it
37:43it had got up to say uh I forget the
37:45exact number, but let's assume it was 9
37:47trillion, okay? Token usage.
37:50And then the next time he went in or the
37:52next time I saw anything, they were
37:54close to a could a quadrillion.
37:57That is why the capex numbers have gone
37:59up so high. When you have volumes
38:02unprecedented,
38:04you don't understand what's going to
38:05happen. There is so much wealth in the
38:08world
38:09that the reason liquidity is irrelevant
38:11for crypto is because
38:14we are using liquidity and it goes right
38:16into dormant assets. And I don't like as
38:19much as I you know, Raul and I talk
38:21about this stuff,
38:23I I just don't think we've ever gotten
38:25to the point that that money goes into
38:27dormant assets. If you take a million
38:30dollars and put it into a building,
38:32nothing happens to it. You can't go to
38:35Starbucks and buy a coffee with your
38:37million dollars in a building. So it
38:39just becomes dead money. Like the
38:41liquidity is now trapped. And so this is
38:43why the global marketplace has about 120
38:46trillion of physical currency, but it
38:48has 900 trillion of asset values. That's
38:51the Ponzi scheme or the fiat system. You
38:53have all this leveraged stuff. So
38:55theoretically in my world the leverage
38:57will eventually head back to one.
39:00And this won't happen like the Great
39:01Depression where they all fall. It will
39:03just happen over time that the fiat
39:05assets won't grow.
39:06So if the total sum of the assets is 902
39:093 trillion and the 3 trillion is crypto,
39:12what will eventually happen is we'll get
39:13back to 200 trillion and over the course
39:16of going from 120 to 200
39:18the fiat assets that are dormant will
39:21now be liquid because they'll be
39:22tokenized. So you can buy a coffee with
39:24a tokenized piece of your building
39:25because it's just a piece of it and
39:27you're transacting in it. And I know
39:29that's hard for people to think, but if
39:30that happens the velocity of money picks
39:33up. Everything starts to accelerate. So
39:35this becomes more about toll collecting
39:38and trust. And economic value to me is
39:41leaving fundamentals of cash flows and
39:44stuff like that and it is going to go
39:46towards that thing. There's toll
39:47collecting which is
39:49are you growing your toll collections?
39:51So Arbitrum right now is benefiting.
39:53Their token's going up because Robin
39:55Hood Chain is seeing volumes. Ethereum's
39:57just sitting there going, well we're not
39:58getting most of it, but you know what?
40:00You guys are built on top of us and
40:01hopefully the Arbitrum competitor will
40:03be built on top of us as well. And so
40:05Ethereum grows by the ecosystem growing.
40:09Think of it as a city where first
40:10there's one person, then there's two
40:12people. The way that they go is they're
40:14collecting taxes on everyone that's
40:16there in the city. And so they become
40:18the house. And everything that's built
40:20on Ethereum, everything that's built on
40:21Solana, they're kind of like a mini
40:23house and they're collecting it. Why
40:24does Ethereum win? Because people trust
40:26it. It's big. It's size. It's something
40:29you believe in. Some people trust
40:30Solana. They want it for the speed, but
40:32I don't think anything's going to stay
40:34with Ethereum the same way Bitcoin can't
40:35be replaced as a store of value. So the
40:38way I see it is it's more about the
40:39velocity of money which is something
40:41that Caitlyn Long has talked about in
40:43public and gone through. I completely
40:45agree with that. We're going to see more
40:46speed, more transactions, more things
40:48happening and the you value GDP is
40:51completely different when it's a speed
40:52and a velocity of money than when it's a
40:54physical one. So we all have to
40:57recognize that the value of assets will
40:59remain, the money will transact
41:01differently, and the value will start to
41:03move into the crypto ecosystem rather
41:05than the fiat assets.
41:07>> I think the the other the third pillar,
41:09I should say, in your in your big thesis
41:11on this transition for crypto, agents uh
41:14or the first step really, AI creating
41:16intelligence agents now allowing us to
41:18take that intelligence and do actions,
41:20have intent, right? This velocity of
41:22money picking up. The third third step,
41:24you touched on it there with Robin Hood
41:25Chain. I've been so impressed by what's
41:27going on with Robin Hood Chain.
41:29Vlad comes out of nowhere, CEO of Robin
41:31Hood, and has somehow executed better
41:34than any other trad fi or traditional
41:37web two company in the crypto world. I
41:39mean, he is just moving militant. It's
41:41like every step they do and they're
41:43they're accelerating this tokenization
41:44of equities in a way that I thought
41:46would take much longer.
41:48What's your view on on how Robin Hood's
41:50doing and and I guess why are why are
41:53tokenized equities so exciting, do you
41:55think? Because I I've seen some people
41:56make the case, oh, you can trade them
41:5724/7. You know, what's the big deal? Why
42:00is Vlad so excited and and why are other
42:01companies, Larry Fink, BlackRock, the
42:03world so excited about this trend?
42:05>> Well, this is an important um question
42:07for people to hear because, you know, I
42:10I wrote a a paper called The Silent IPO
42:12on Bitcoin um
42:15about the ideologues bailing out of
42:17stuff.
42:18And it's because the merging of well, we
42:22we want this new system, but we don't
42:23ever want to merge with the old system.
42:25So we don't want the government
42:26accepting us, we don't want the
42:27president issuing a meme coin, we don't
42:29want Larry Fink, we don't want any of
42:31that. Okay, I get it. So the ideologues
42:33are like, I'm out. I I I did this for
42:35freedom and like, well, unfortunately, I
42:39believe the systems merge and eventually
42:41the new system eats the other system and
42:43we're watching that as we go through
42:45with AI. So I never kind of subscribed
42:48to that. So where Robin Hood is
42:50interesting is at a time where crypto is
42:52in a
42:53uh a bear market where they can't raise
42:56capital from a VC.
42:58Robin Hood has tons of money because
43:01they're in the fiat world. So I think
43:04everyone needs to realize that at some
43:07point in a crypto winter, if you're not
43:09getting any capital running in, then the
43:11entrepreneurs can't really do that much.
43:14And if you can't get people to come in,
43:16then someone needs to pick up the
43:18tokenization side. So I don't think it's
43:20just Robin Hood. I think Hyperliquid was
43:22a was a big thing this year. I think the
43:25ability for Stan Druckenmiller to put,
43:28you know, to to disclose that he owns
43:29Hyperliquid through PER and basically
43:33just highlight that these worlds are
43:35kind of merging and the reason they're
43:37merging is because the one that's
43:38working capital wise is actually
43:40bringing the capital into crypto, not
43:42directly, but it's coming in through the
43:44back door through tokenization. And I
43:46think tokenization leads to more
43:48wallets. It leads to more money coming
43:49in the ecosystem. And as Robin Hood is
43:50showing, they're doing stuff on Ethereum
43:54on Ethereum and they're doing thing in
43:55Arbitrum. So
43:57this is why I created an index to
43:59represent the ecosystem of crypto, which
44:01is a direct overlay to Bitcoin,
44:03which ends up being 40
44:05tokens
44:07in the crypto world making up 10
44:09separate sectors, but there's also six
44:11public companies that are in there
44:12because they're kind of straddled
44:13together. So I want to make sure that
44:15people realize I've never believed that
44:17the ideologues were right. I thought the
44:19systems would merge. I think there's a
44:20better system that comes with with
44:22crypto and AI that will gradually make
44:26the problems of the debt laden fiat
44:29system easier to deal with. And that's
44:31because digital agents and the growth
44:32will come and we need speed, not just
44:35inflation, which is what all the
44:36textbooks tell you. We need to inflate
44:38our way out. No, we need speed. We need
44:40velocity of money. If velocity of money
44:42happens, then all of a sudden you can
44:44actually transfer the debt by having
44:47velocity of money. And that's what I
44:48believe is going to happen. But the only
44:49way that happens is with AI agents and
44:52then the guard rails that can handle the
44:53speed of AI agents and that's where we
44:55are right now and that's why I'm so
44:56optimistic on
44:57what's happening. Robin Hood is good for
44:59the overall crypto system.
45:01>> Gosh, Hyperliquid too. I'm so glad you
45:02mentioned that. It's it's
45:04the leading crypto companies today, I
45:06don't even think people will view them
45:08as a crypto company maybe in a year,
45:10maybe in two years. Like if you look at
45:12Hyperliquid, there is almost as much,
45:14you know, people trading tokenized
45:15equities or oil or whatever it is.
45:18People will look at Hyperliquid like
45:19they look at any other you know major
45:22financial institution. Same as Robin
45:23Hood. You look at Robin Hood's revenues
45:25of quarter two. I think it's probably
45:27the first year this has happened. Their
45:28revenues from crypto products, whether
45:30it be prediction markets, whether it be
45:32people trading on chain, I don't even
45:33think they've published the the Robin
45:35Hood chain revenue in that is already
45:37bigger than what they make from stock
45:39trading. So like is Robin Hood a crypto
45:41company now or is as you said, those two
45:43things are just converging. [snorts]
45:45Gosh, it's exciting.
45:47>> Yeah, it's funny too because I left out
45:48in that whole chain you know, I left out
45:50Uniswap. Like there there's different
45:52parts of the Robin Hood chain in terms
45:54of making money that people have to go
45:57look into to understand the economics
45:59and what's going to happen and I spent a
46:00lot of time on it because I was
46:02fascinated by how
46:04the TradFi analysts were upgrading Robin
46:07Hood but not mentioning crypto. And I
46:09could tell that the reason they weren't
46:12mentioning is because they don't
46:13understand it. And that means that this
46:16process is going to be hard. If Robin
46:18Hood is viewed as a digital asset and
46:19the Morgan Stanley's one of the
46:21companies that upgraded it
46:23now has a digital asset
46:25goal to sell it,
46:27they have to start upgrading some of
46:28these companies when they see it but
46:30they have to be able to talk about it in
46:31a way that their investors will go
46:33through it. So rather than explain to
46:34them what it is, just upgrade the stock,
46:37be known as the Robin Hood person and
46:39you're getting some of the benefits. So
46:41I again, I think the merge is happening
46:43and Hyperliquid is just another way and
46:44it's funny I get
46:46people reaching out to me especially
46:47after this past weekend when it was the
46:49you know humanities we're not going to
46:50make it, we're all going to die, AI's
46:52going to kill all of us.
46:54I had people reaching out to me at 5:30
46:56you know, halftime some of the games on
46:58Sunday, and they're asking me if uh
47:01where the S&P is going to open up, where
47:03I think it'll be down X, blah blah blah,
47:04and I go,
47:06here, let me go to Coinbase.
47:07And [laughter]
47:08they literally said, what do you mean?
47:09I'm like, well, Coinbase has perps on
47:11it. They have spy perps. I'll just go
47:13look for you. And I go, look, it's down
47:1428 basis points. They are going to be
47:16down whatever, 28 basis points, so maybe
47:18$30, $40, whatever. And that's about
47:20where the futures open. How did you know
47:21that? Where what are these perps things?
47:23So I just think that people haven't
47:26recognized that hyperliquid and I
47:28haven't seen or read why Stan did it,
47:31but knowing him well enough and the way
47:32he described how he invested in
47:34Argentina,
47:36my guess is that something happened like
47:38that
47:39where one of his team members, he was
47:41like, where are these oil futures going
47:43to open up? And someone must have said,
47:45well, they're trading right now. He's
47:46like, it's Saturday. They're not
47:48trading.
47:49No, they're trading in hyperliquid. You
47:50can go look at there. And he went,
47:52on what?
47:53Hyperliquid. Oh, we got to buy this. Or
47:55maybe it was after SpaceX. It's like,
47:57where's this IPO going to be? Well,
47:58based on hyperliquid, it's going to open
48:00up around exactly where it opened up. So
48:03when you have events like that where
48:04supply and demand is actually trading in
48:06a market, it's trading outside of the
48:08market hours, and you're someone like
48:09Stan that I think, you know, will
48:12basically say, I don't know how much to
48:14buy. I just know to buy something of
48:15this because it's already doing
48:16something which
48:18can't go the other direction. There's no
48:20way this isn't good to know where prices
48:22are on a Saturday. I can't believe I
48:24lived my whole life waiting for Sunday
48:25open and panicking on [clears throat]
48:27this stuff.
48:28>> Oh man, that happens like once a week on
48:30on Twitter is I see some, you know, some
48:32big analyst or whoever it is, they're
48:34talking about this and then someone will
48:35reply and say, hey man, you can see
48:37right where it's trading. It's it's
48:39still alive. And they go, what? And then
48:40it's okay, that's hyperliquid. It's
48:42another person that buys into
48:43hyperliquid.
48:44Um I'm trying to think past tokenized
48:46equities. That's where the focus is
48:47right now. It's where Robin Hood is
48:48dominating and and people are starting
48:50to see this trend in real time. Trying
48:52to think what comes next. What do you
48:54think is the next evolution of
48:56tokenizing real world real world assets?
48:58Is it the bond market that gets
49:00tokenized? Like, what, what part of that
49:01is exciting to you? Or is it just the
49:03general trend? Like, is there another
49:05asset class that you think will be just
49:08as impactful or that you're kind of
49:09looking to as as maybe the next play?
49:11>> I [snorts] I think private credit is and
49:14the whole private equity space is really
49:15important. Um, I I think private credit
49:19because we have the situation in private
49:21credit right now, we have a lot of
49:23people trapped. So that is a where do we
49:25find liquidity thing? And the fact that
49:28the BDCs trade at a discount means this
49:31is the perfect place for there to be a
49:32major story of like,
49:34okay, if you guys want to get out,
49:36here's where you're going to be able to
49:37get out. You can get out. This is the
49:38market we have right now. People are
49:40willing to buy this stuff down 20% if
49:42you want your money. And
49:44I think that's I really do believe that
49:47there will be a smart group, and it's
49:48probably already going on, that will go
49:50to the insurance companies who need to
49:51buy private credit. And there's a price
49:53for private credit. It's mispriced right
49:55now. But if they could sell these at a
49:5830% discount where they already had
50:00buyers, and think of, you know, the
50:02public problems that Blue Owl and KKR
50:05and Apollo and all these guys have had
50:07with having to mark their books down and
50:09and basically trap money because they
50:11got retail in there, I think that's the
50:14next place where it would really help
50:16out. And I I'm pretty sure Apollo has
50:18kind of looked into this already.
50:21Uh, I think that's going to be the the
50:23big headline place. Tokenized stocks
50:25will be the big thing, but I think that
50:27solves 24/7 trading. That solves um the
50:31ability for people to trade things
50:32around, you know, I want to trade a
50:34Japanese stock, but I don't have access
50:36to the Japanese market. Let me have
50:37access to it so I can trade it. I think
50:39those are important for people who want
50:41to trade. You're basically opening up
50:42gambling on every security in the world
50:44for people who want to do that. But you
50:46could say diversification, you don't
50:48have to do it through ETFs. You can
50:49create anything that you want to create.
50:51And the ETFs are created based on some
50:54old index that then is a structure which
50:57is very archaic. So I do believe that
50:58this disruption will allow people to do
51:00more, but I think liquidity would be the
51:02next thing is how do we solve for these
51:04places that people are trapped in money?
51:06That's real estate, that's private
51:08credit. So we think of stocks and bonds
51:10and collateral, and collateral is
51:11already working. We already have
51:12BlackRock with money market funds. I
51:14think these other places are going to be
51:16very important.
51:17>> The last big idea I want to ask you
51:19about,
51:20because it's it's something I've seen
51:21you write about and it kind of
51:22challenges a mental model that I've been
51:24using, AI and crypto both being at the
51:26frontier, kind of the frontier of risk
51:28assets as well of of people that want to
51:30invest in the frontier. They're either
51:31choosing crypto or they're choosing AI.
51:33I've kind of thought of those as when AI
51:35was really hot, it was kind of stealing
51:36attention, stealing inflows from crypto.
51:39So I was kind of like, well if AI is
51:40doing really well, that's not so good
51:42for crypto. Maybe we cool off. And I
51:44think some of your recent writing has
51:46has flipped that idea on its head or at
51:47least challenged it and made me think
51:49that these are now
51:50kind of like actually driving each other
51:52up, that they're going to kind of
51:53slingshot each other and work together.
51:56Can you touch on that a little bit as to
51:58you did
51:59briefly with how agents are accelerating
52:01crypto adoption and and leading this
52:03economic activity.
52:05But can you touch on that as as
52:07AI, if that trade gets hot, we're going
52:09to go through all these cycles, right?
52:11Once Dario stops telling everyone that
52:13AI is going to kill us all, AI gets hot
52:15again for a month or two and then it's
52:16Sam comes out and says something. Same
52:17thing with Bitcoin and crypto.
52:19Can you talk about how those two work
52:22together and if they do steal attention
52:24or if they're both helping each other?
52:27>> Everyone kind of thinks of AI as
52:30what worked, let's say the last year.
52:33>> Sure.
52:33>> The interesting part was the first wave
52:36of AI was really isolated to Nvidia and
52:39let's say the hyperscalers. And that
52:42started right at ChatGPT and it went for
52:44two years.
52:46Then last year it started to shift
52:48towards the infrastructure.
52:50So at first it was we don't know who's
52:51going to work in AI except for Nvidia
52:53and then we don't know
52:56what part of the stack we should be
52:58buying and then it went into, oh, we
53:00inference is it. Like
53:02they need a lot of tokens. We need to
53:04buy invest in tokens.
53:07That was when we got a um
53:10I mean, let's be honest. I I have an
53:12index that over the course of a year at
53:15least 40 of the names were up over 100%
53:18in a year and many of them were up more
53:21than 200 and 500%.
53:23>> Jeez.
53:24>> So those were crypto type moves. I mean,
53:26that's the you know, five baggers and
53:28stuff. You don't get in equities and you
53:29certainly don't get them in big
53:31companies, but you you got them in the
53:33infrastructure trade.
53:34What Nvidia has shown everyone from a a
53:37company that is continuing to make money
53:39is at some point it ends and you're
53:41going to move slowly.
53:43Earnings are growing and the benefits of
53:45AI are here.
53:48But
53:50the multiples come down in the stock
53:51market and this should be uh
53:55a wake-up call for everyone who owns
53:56equities. Equities are the hope trade.
53:58Equities are the growth trade. Equities
54:00the thing you get into if you want to
54:01get 15 to 20%. You have to to get that
54:05real estate, you have to lever up, but
54:06that depends that rates stay low and it
54:08depends that the real estate prices go
54:09higher and you're able to rent
54:10everything out. That's not happening
54:12anymore. VC's not happening the way it
54:13was. Private equity's not happening the
54:15way it was.
54:16Equities were the last game in town
54:17because bonds blew up a long time ago
54:19and they're still in a bear market. Um
54:22equities are the hope trade. The problem
54:24is three years from now, there's no hope
54:26in my opinion for growth in equity. Now,
54:28public stocks. And that's the problem is
54:31the S&P 500 earnings this year about 30%
54:34year over year and yet the S&P is up
54:36about 12 percent, 11% year to date
54:40through yesterday. So it's on pace for
54:41about 17. So we've had a big multiple
54:43compression year. Multiple means that
54:46the future. It's the total sum of the
54:49present value of the discounted cash
54:50flows. Okay, well great. Why is it not
54:53why are we not in like a dot com bubble
54:55phase where everything's trading at 100
54:56PE if this is AI? The reason is because
54:59the infrastructure names like Micron,
55:00they're trading at a two, three, four
55:02PE. Nvidia is trading at a nine, 10, 11
55:05depending on on what you believe on
55:07Jensen, but I would say off next year's
55:08earnings it's it's single digits now.
55:11This doesn't make any sense.
55:12So these stocks are not going to move
55:15with their earnings growth. It's just
55:16not going to happen. So
55:18they took money away from crypto because
55:21it was easy money that had earnings
55:23supporting it. Now the terminal value is
55:25becoming an issue. And what I mean by
55:27terminal value so people who haven't
55:29seen me talk about this, we just don't
55:31know which companies will be around in
55:33the past three years. So if you take
55:35Nvidia, there's plenty of companies that
55:37could compete with idiot Nvidia at some
55:39point based on better technology, based
55:41on some advancements in AI. When we get
55:44to humanoids, you're going to have
55:45mining companies that are going to use
55:47humanoids which which will disrupt the
55:48companies that have spent all these
55:50money on people. You can't just fire all
55:52the people and replace them with
55:53humanoids, but you can be a company that
55:55buys a piece of land and has no humans
55:57and starts from scratch and actually be
55:59able to compete over a long time. So
56:01this is all going to make the valuing of
56:03all companies very challenging. And so
56:05the reason that I care so much about
56:06crypto at this point is because crypto
56:09is a 3 trillion 4 trillion dollar asset.
56:11Equities are I mean US stocks are 70
56:14trillion dollars.
56:16Crypto in the you know globally is
56:19less than four. Like
56:21we just what's built in guys is that
56:23equities are going to continue to do
56:25well. What's not [laughter] built in is
56:27that AI is going to disrupt that and the
56:28only thing people are going to care
56:30about is the velocity of money. So I
56:32believe in the rise of entrepreneurship.
56:35I believe if I could invest in something
56:36right now, it would be a a a ETF on
56:40every public or private company that is
56:44only making like 200,000 dollars in
56:46revenue. I would want an index of that
56:49which historically those are mom pop
56:51shops, but they didn't do well. But I
56:53believe in the ecosystem of those little
56:55AI native businesses will eat and grow
56:57continuously because they're going to
56:59keep getting into as many businesses as
57:00possible. And maybe some of their
57:02business disrupts 200,000 of Amazon and
57:05200,000 of Google and 200,000 of and
57:07name all the software companies,
57:09but they do 20 of them and they're
57:10making $2 million a year. So it doesn't
57:13seem like much, but when billions of
57:15people around the planet are doing it,
57:17and when people inside Germany decide
57:19that, hey, why do we have Google
57:20searchers 90 plus percent? The US stock
57:23market is 72% of global stocks, and
57:26that's because we own the internet.
57:28Well, AI kind of democratizes
57:31everything. So I think what's going to
57:32happen is crypto will have a growth
57:34story and I don't think stocks are going
57:35to have the same growth story that
57:36they've had in the past.
57:38>> Jordi Visser, thank you very much for
57:40doing this, man. It's been a pleasure.
57:42>> No problem. Same here. Good to see you,
57:43Luke.

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