The Pomp Podcast - The Truth About Why Bitcoin Isn’t Exploding (Yet) | Jordi Visser

Starting point is 00:00:00 What's your read on Bitcoin? And are you giving up? Are you walking away? The reason I shake my head at Bitcoin is because every possible thing to everyone listening that you would want for Bitcoin is happening right now. I think what people should think about is we don't have an IPO for Bitcoin, but this last four months to me feels like sourcing the pricing of the IPO. So I think at some point, Bitcoin becomes a boring asset to people who are looking for three baggers, four baggers, five baggers. It becomes a diversification. So I think this is just a... What's going on, guys? Today, we got a great episode with Jordy Visser. In this conversation, we get into everything you want to hear about. The Fed

Starting point is 00:00:40 interest rate cut, the China trade agreement. We then talk about Bitcoin. Why is everyone so upset? What's going on with the token revolution, tokens in AI and tokens in crypto? And then we finish up talking about Tesla and what's going on with self-driving cars and all of the advancements and AI. This conversation's got tons of insights that you haven't heard before, and Jordy is in rare form dropping it all for you for free on this channel. Now, on this channel, we have 636,000 subscribers, but my goal is to get to 1 million subscribers. Hit the subscribe button so you can get this conversation every single Saturday morning. Here's my latest conversation with Jordy Visser. All right, Jordy, I think we should start with the Fed cut and China trade announcement.

Starting point is 00:01:18 First with the Fed cut, 25 basis points. It doesn't seem like that's a big surprise to anyone, But maybe the commentary around the interest rate cut was actually the more interesting part of this. What was your read on Powell's comments? So I think people, we haven't had any labor data. So when you don't have any data, I kind of agree that it's hard to say for sure if December is going to be a cut. Let's assume that we come back and all of a sudden we've created 400,000 jobs. They're not cutting raise. I don't think that's going to happen, obviously.

Starting point is 00:01:47 But I think that's the reason why. So I don't see it as a big thing. I do think I heard a podcast this morning from the Forward Guidance guys, and they made a really good point about retail, which we talk a lot about. So if retail has been dominating the action and they've been the buyers, they're also massive call option buyers. It's becoming apparent, and these guys brought this up, that the market structure has gotten to the point that I think when we have these events, especially when they all happen in the same week. So you had China, you had the Fed, you had the MAG-7 earnings. I think a lot of call options were purchased on the hope that this would all lead to an immediate move higher.

Starting point is 00:02:28 And when that doesn't happen, they sell out of their call options. The banks need to get out of the delta that they've been using to hedge that. And it ends up as a sell the event thing. So I'm starting to believe that we're going to see more and more of this going forward, that when you have these weeks where there's this known catalyst, it's almost always going to be a sell the news event. So that's the way I would treat. They still have 70% chance of a cut in December because I believe even more strongly than what we've talked about based on the news that's happened with Amazon and with UPS, that people are underestimating the labor market

Starting point is 00:03:03 weakness that is going to be there. Not how bad it's going to be in terms of losses, but just this overhang and the need for companies to reduce people replace them with digital employees i've got more and more signs of that this week so i would treat the fed as just a sell the news event uh china ended up being a sell the news event but when you put them all together the facts are they're cutting rates which is going to help small cap businesses it's going to help everything in terms of lowering rates there's more probably to come if the labor market's there and the china us thing is kind of the end of this whole tariff thing. We won't really hear about it again because we have a truce for at least a year. So one of the things that was interesting to me off the

Starting point is 00:03:43 China agreement is it actually felt like both sides gave way more than I would have expected, right? I kind of thought that both were going to dig their heels and the US would be much less likely to very quickly kind of give these concessions. And then China, I mean, they have pretty much said, look, we'll do the rare or we roll back the rare earth stuff as long as we get this other concessions. And so is it just like getting clarity is actually the most important thing is kind of like the macro, hey, we have uncertainty. Now we have more clarity. And that is what investors are looking for. Or do you think the individual details of this stuff really matters? If the fentanyl related product tariff is 20% versus 10, that's a 50% reduction. That's

Starting point is 00:04:28 a big deal or is it just no we have clarity of where this is all going to let uh kind of settle out and that's that's what we really needed well i think the fact that this happened and there's two events that people have to pay attention to next year that to me are why this is absolutely positively a bullish thing and i'll go to a third point that is the thing i've been talking to people about jordy what would change your mind like you're you you think the ai thing is a certainty what would change your mind and i'll get into that to end so it it is trump is supposed to go to china next year and they've talked about april they've talked about march but the reality is this is stage one meaning they're not going to hammer out some long-term agreement but to get a

Starting point is 00:05:08 truce is a big deal if he's going to go there that's a big deal here's the thing that i would say that they both know which is the reason why i think china went all in on their provocation and then Trump anteed up. We have the midterms next year. If the goal for him was to shake this thing and get the tariffs done this year so that he could have a ramping into the midterms, I think that's really important. And I think that is something that people have to keep in their mind. I think there's a reality that waiting for one year takes us, oh, just before the midterms. By then, we'll already have this stuff out. So I think his goal, and I think the entire administration's goal is to make sure that the farmers are taken care of. Basically, his base

Starting point is 00:05:57 is taken care of. But then also because of the job market that is on the weaker side and the talk of writing checks to people, housing crisis, this is going to be the focus coming out. So for everyone kind of paying attention at this point, I think you could take that between China and the U.S. Now the focus is going to shift from Trump away from these global issues is going to shift on the domestic policy side. That's one side. And then on the other side, I think the fact that China's not invading Taiwan. And again, that's what people have said. What would change your mind? It's the perfect time. You've restricted rare earth. The military munitions are down. It's the perfect time. If you were going to ever invade Taiwan, it doesn't mean they won't do it

Starting point is 00:06:36 at some point in the future, according to every geopolitical expert on the region. But for now, for people that are trading the market, I think taking that off the table and having a truce is a very positive sign because it means the market can fixate on, hey, rates are moving lower, inflation's coming lower, gas at the pump is down to $3, and earnings are growing rapidly, and profit margins are still expanding. Now, one of the things that I find very interesting about domestic policy in particular is this debate of SNAP and the food stamps and this whole thing. And it's one of these rare issues that I think people have an emotional reaction to immediately, right? Because you're dealing with food and people being able to get

Starting point is 00:07:17 access. It's also politicized and seems to be one of the major debating points that people on both sides of the aisle are using as a way to kind of embarrass the other side or use as leverage. But then there's actual like real implications from an economic policy standpoint, because we know that spending is out of control and there's so much that Washington, D.C. is doing in there funding this stuff when you start digging into these types of topics and we'll use this one maybe as an example but more so just like your approach it feels like to me that there's a lot of different things that are true uh the government shutdown is dumb people are grandstanding like all the political soap opera stuff 100 you can critique that both sides of the aisle be adults get

Starting point is 00:07:58 something done at the same time there are people that 100 are in need need help the government you know has these kind of safety net programs to try to to help them whether people like them or not like there's a group of people who very earnestly are like, I need help. There also seems to be a group of people who are taking advantage of these systems. And a lot of people are questioning whether it's their immigration status or, you know, whether it's fraud and abuse or whatever, like all of this is true. As an investor, when you're looking at the stuff in the headlines, right, I go on Wall Street Journal or CNBC or Bloomberg, like this is dominating headlines. Do you just ignore it and say, hey, this is actually has no impact on my investment portfolio

Starting point is 00:08:36 and on you know stock prices or do you think that increasingly this stuff is important to pay attention to because we're kind of trading on sentiment now and there's more of like a vibe economy than there is you know did this company actually increase by 10 or 12 percent you know quarter over quarter so let's use the historical thing these always end the same way it's just a question of time it's not a question of if or so let's leave the government shutdown yeah yeah um So that's the reason why all macro people are like, whatever, like we're not going to default. We're not going to do anything on this. We just print money if we need to. So let's leave that aside. If I was going to pick two things to look at, to say, this always ends the same way going

Starting point is 00:09:17 back over time, it's two things, uh, transfer payments. So everyone who looks at, they hear a number comes out. What is personal income? So personal income right now, year over year is let's say 4.5%. It's somewhere between 4% and 5%. Income growth X transfer payments is only up 1.4%. Transfer payments are compounding at 9% a year. So transfer payments are the thing you're talking about. This is the payments going out to people. And it's growing partly because of demographics, but partly because the government always just keeps adding stuff. And once they add it, they never pull it back or it's very seldom pulled back. So to give you an idea of the numbers, transfer payments are about $5 trillion now. The income that I referenced is about $16 trillion.

Starting point is 00:10:04 So if something's going at one and change percent and something's going at nine, that's kind of like the Bitcoin versus everything else story. The faster it grows, it becomes a bigger portion of the pie for this. That's 25% of the total pie, right? And so you're getting to the point now where as transfer payments keep compounding, God forbid we have another COVID and it resets it much higher. And then it just grows another 9% from there. So that's one side that just continues to grow. It never slows down. On the other side, you have the debt, which has always continued to grow. So if those two things continue to go, this is all grandstanding. This is all just a bunch of BS. They have their constituents. And the good thing about, you know, we're taking, we're saying

Starting point is 00:10:42 it's two parties fighting with each other. But the reality is it's all the people in Congress and all the people in the Senate that have their own constituents. It makes it very difficult for anyone to give in on this because someone inside your district needs this to happen. And so whether you're a Republican or Democrat, it still comes down to the fact that the constituents are voting. And it's the same way that when I got interested in Bitcoin, I was like, well, when the voters actually start voting for things, even though this will disrupt the centralization of the government, the centralization of corporations and the centralization of banks, if the voters vote for it, it's going to happen. Today's episode is brought to you by Figure. They're

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Starting point is 00:12:35 is the de-financialization of New York City. And it's looking at occupations, right? And basically like the percentage of finance jobs in New York is falling. And some of it is because people feel like, Hey, I can still work in the finance industry. I can do it from a different geography. There's remote work. There's access through all these platforms, et cetera. But a big part of it is like, no, the other occupation buckets are growing at such crazy rates. And I forget all the stats and I don't want to misquote it, but it's something, some huge percentage now of New York's workforce is healthcare related and it's growing very rapidly. And so you start to get not just like actual demographic change, right. In terms of the people, but what are the people doing

Starting point is 00:13:16 is rapidly changing as well. And, you know, what I haven't spent enough time on to really understand is now all of a sudden, well, your tax base starts to change. If your tax base changes now that has impact on your local and state economy, right? Which then means maybe you have a bigger strain on the federal government having to plug the hole. And so you just start to understand some of this stuff and you say, you know what? It's not changing my portfolio. It's deepening my conviction in the government's never going to stop printing money, the debasement of the currency. There's certain things that are going to benefit. AI is going to be a thing because people aren't going to want to pay for the humans to do this stuff.

Starting point is 00:13:48 And so I do find that with this kind of getting blown wide open and the Overton window shifting because of all the political change, it now is feeding into the mentality of investors, but the people who are already here buying Bitcoin or gold or looking at AI, they're just getting more and more conviction, which means more capital flowing into these trades, right? Yeah, and remember, if the profit... So I want to say this the right way so that people sitting there, so you've got, let's

Starting point is 00:14:19 say, let's break down three separate parts of the market. You've got the passive investors, which for the most part are going to be the baby boomers that are invested in pension funds or whatever. You've got the active traders, the people we meet in conferences and people that are grateful that they're actively trading and they kind of get the deal. Like, well, if the government's going to keep printing and the market goes up 80% of the time. Then my job is to just play the market until it starts to have one of its 20% correction, one of its corrections, 20% of the time. And they think of it honestly, and I hate to say this to

Starting point is 00:14:48 people, but it's like their card counters. They're only playing the game when the momentum is going higher and they're fully involved and they should be trading it that way. The baby boomers and the passive investors by definition, they're just passive. They're just going along for the rides, the government. So the government's helping both of those groups. The institutional side is different. And they're getting squeezed on all angles because they have to kind of be market neutral. And they're getting hurt by more vol, more of these 20% corrections that are coming. And like I said before, when the internet started from 1991 to the dot-com bubble, we didn't have a 20% correction except for during LTCM. And that went back straight up

Starting point is 00:15:24 immediately and it finished up for the year. So now we're in a world where the market goes higher, but we're having these 20% corrections regularly three of the last six years, which means it's just a different way to deal with it. Very similar to the way Bitcoin was. The reason I was hesitant in terms of answer, I just want to tell people there is a labor force participation rate, which has come down dramatically. And so people understand the wonkiness of what this is. It has come down sharply since the great financial crisis. I want everyone to think, I say this repeatedly, the labor force participation rate could also be called When you have low jobless initial jobless claims, think of it as the need to work rate

Starting point is 00:16:03 because you may want to work, but if you're a two-family household and the husband or wife all of a sudden is like, okay, we don't have a nanny anymore because they were sent back or daycare doesn't have enough people and they've raised the cost too much, I'm going to stay home and take care of the kid. That person leaves the labor force. The labor force participation rate goes down. If you have demographics, it goes down. This has been happening because part of it is that the stock market keeps going higher.

Starting point is 00:16:29 The reason the stock market keeps going higher is because of the efficiency and profit margins that are coming from exponential innovation. This is why at the end, when everyone talks about the governments, on the one side, you have the governments, which are fighting. They're fighting deflation, which is the technology side. As Jeff Booth has said, they're printing money just to offset the deflationary pressures which come. And because the profit margins are going higher, retail is benefiting in terms of trading and

Starting point is 00:16:53 also the baby boomers are benefiting and so you get this weird dynamic that it all feeds through the system and everyone's looking for when this bubble will end when the reality is unless we get inflation i can't come up with another angle and we're not getting inflation yeah it does feel like um the financialization of society in general uh is this tailwind that again i i'm always very scared to say like certain data points don't matter i think they just like you can lessen your dependence on them. And when you start looking at the labor market, really there's two inputs that I think are pretty interesting. Is the person who's sitting at home, who is trading or investing their own money, are they participating in the labor force? Well, according to the

Starting point is 00:17:35 official metrics, no, but they are allocating capital. If they simply created an LLC and they said, now I have an investment firm, you would then count them in the labor force, right? And so in a weird way, they're doing the same thing. It's just whether they have a legal entity or not. And so again, stupid example, but if you extrapolate that out, there's a lot of things from the financialization where that becomes part of it. The second thing is I do think this whole like rise of digital workers, and I've actually maybe over the last couple of weeks changed the way I talk about this. It's not just AI, it's AI and automation, big overlap. But when you see the Amazon saying, Hey, over the next, you know, five years of 600,000 jobs, I think in the software

Starting point is 00:18:14 world, we're like, oh, I see the digital worker. Like I see what this, I would have hired somebody, but now I have this AI agent. In the manufacturing, industrial, and kind of physical economy, you see the physical robot. And so what you're doing is you're getting this explosion of that productivity. And if you change your definition of labor from human labor to labor, actually we have more people and things working in the economy than ever before. that's really bullish but if you look at this old data point that is the methodology hasn't changed and we're just care about the humans you can yell and scream all day long and say you know the world's ending look at the labor thing and so in a weird way is the fed actually in a position where

Starting point is 00:18:55 they can't make a good decision because they're just going to look at the human labor number but they're kind of missing the like productivity boom alongside it well this is the problem with on the one side we have financial conditions which you don't hear about anymore so financial conditions are getting easier. They're lowering rates, stock markets at all-time highs, credit spreads at all-time lows. So they're doing that because of the human labor. So their mandate is to focus on the humans, not to focus on the robots. What will eventually happen? And so we, you know, I started opening up this Pandora's box, which I got a lot of conversations on, on the whole abundance theory. But eventually if the robots are doing more of the work and

Starting point is 00:19:32 the companies are making more of the money, the companies are going to be taxed. So Bernie Sanders already said we got to tax the companies as they use robots. How that gets done in the future, the worse the labor situation gets, the more the voters are going to vote people in that are going to be like Mandani or whatever. As more people are disrupted, everyone can argue about, I'm a capitalist. The problem is capitalism is cannibalizing itself. I can say it again and again and again, but that's what's happening. The faster innovation goes, as Joseph Schumpeter said, you eventually get to the point that socialism becomes the vote for the mass of the people, because if the distribution of wealth gets worse and worse.

Starting point is 00:20:07 So I think we're kind of heading in that. The Fed is in this very difficult position where stocks are going up, financial conditions are easing, and they're cutting rates to make the situation worse. Rather than fight that, the reason that we get together and we talk about these things, I don't wanna keep saying that labor is going to weaken, but the reality is that's what's happening.

Starting point is 00:20:27 That's the data that's going on. Too many people are focused on things that to me, they're mistaken like oh immigration is the reason it's down and the labor pool's shrinking and blah blah blah and it's like every survey that shows the health mentally of people at their job like do they like their job is declining rapidly no matter what it's people are putting reports out that ai is replacing younger people not older people you're really at a point where if you start with the younger people that's the way revolutions start they're the ones that you know they have nothing to show for it and they were sold a bag of goods of well i go to school

Starting point is 00:21:03 I get my diploma and then I get a job and I move up the corporate ladder. If that doesn't exist anymore, then people get really angry and you can see why it'd be just, it's fascinating to be talking about this while the New York city mayor voting is going on. So for people who don't live in New York or aren't paying attention, basically Zoran Mamdani is come out of nowhere. Pretty much.

Starting point is 00:21:21 He's got a kind of openly socialist agenda, lots of young people voting for him. But I think that, you know, Andrew Cuomo, who is the kind of main competitor to him, has done a pretty good job of raising his hand and being like, hey, this is crazy stuff. Like capitalism is important. Safety is important. All these things that I think are kind of the

Starting point is 00:21:41 opposite of the Mamdani agenda. And what we're seeing in early voting is we are on track for this to be the highest voter turnout since 1993, I believe. And a huge reason is because a ton of older people are rushing to go and vote. And so it's not perfect, but the general thought process younger people are voting for Mamdani, older people are voting for Cuomo. And again, it goes back to both things are true. The older people are right that the socialist policies are not going to work. It's going to be detrimental to New York City. This is insane. We should not do this. The younger people are right that the system is hurting them. It's broken. It doesn't work for them. And so they need change. And what we are watching is maybe the first time in a while where

Starting point is 00:22:24 really socialism and capitalism are battling it out in a race where it's not Republican versus Democrat. There's two Democrats that are running, right? And you have a demographic shift where you're getting tons of old people who are showing up. And so that's politics. Put that aside for a second. That stuff's coming to finance. Look at the portfolios. Look at where capital is flowing. Look at the, you know, the boomers who don't want to sell their homes, right? And the young people can't actually access their home. Like, like that's the top of the same mentalities playing out in finance. It's just easier, I think, to identify in politics because there's polls, there's numbers there's voting you know roles whatever in finance a huge reason why they're

Starting point is 00:22:59 going and voting for socialism is because you know they feel like the boomers all got houses and then won't allow for deregulation at the local level to build more supply you said so much there of of things that i believe are the issue and i'm going to use actual examples so on the one side and i think you and i have talked about sweet greens and what they've talked about not having people come in anymore. So we got earnings reports from Chipotle and from McDonald's this week. Both of them referenced the exact same thing. And they keep tremendous analytics on who's buying their product. The cohort that is hurting their business is the people making under a hundred grand. And they specifically both

Starting point is 00:23:43 mentioned that that group is still coming. So it's not like they're getting healthy and they're moving on to something else. They're just coming less. Now, that's one side of the case-shaped economy. The anger that they have. So if you take out a student loan and you're now capped at 100 grand, which is kind of the issue, like if you can't move up because there is an AI that costs next to nothing that's about to take your job, and then you have to leave that job and you have to go get a job because you have to live in New York and you go get a job now making $35,000, $40,000, $50,000 in the service industry doing whatever needs to be while you try to find another job to compete with an AI, it's very challenging. At the same point, my father died

Starting point is 00:24:21 this year. Now, my father is a construction worker. I've talked about it before. He owned no stocks. Okay. And the house was a disaster. Okay. Let's just say he didn't put a lot of money into it over the years. Call that a redneck rich where I come from in North Carolina. I mean, we grew up at one point in the smallest house in the town, and then he eventually bought another house. Okay. Which again, not a big house in an old house, but the house is worth zero. So here's a man who worked his whole life in construction, but because he bought this property all the way in 1983, the value of the house is zero. But when you add the land in he, all the money he made in his life came from owning a home for 40 years and the value of the land

Starting point is 00:25:09 appreciating with inflation, not because of anything he did, but because the people around him were in jobs that wanted him gone because they're all in good wall street jobs or lawyer jobs he was the only one still in a construction worker still working into his 80s but his house had gone up in value so that's how if you're a young person you can understand that like hey that's never going to happen for me i'm not i can't even afford a house he was able to buy a house as a construction worker so we've taken away so many parts that i think this vote which will come down to young people versus old people and how many old people come out to do that whole thing. And to shift it is really demographics and the transfer of wealth from people that

Starting point is 00:25:47 accumulate. Everyone who ended up owning a home, to your point, has wealth that's accumulated because of inflation. I always say boomers had housing. The young people have Satoshi. Yeah. Right. Now, speaking of Bitcoin, people are super frustrated. Today's episode is brought to you by DeFi Development Corp. Global wealth today exceeds $500 trillion, yet crypto still represents less than 1% of that total. DeFi Development Corp, NASDAQ ticker DFDV offers investors a new way to gain exposure to one of the most disruptive technologies of our time, crypto infrastructure. As crypto and Trad5 veterans, the DFDV team is building the first Solana-focused public treasury. They're accumulating soul to give shareholders direct exposure to what they believe is the definitive crypto infrastructure poised to capture a significant share of the $2.4 trillion in revenue generated from global value transfer each year.

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Starting point is 00:27:28 park in the usd interest account you can even opt in to have your interest auto converted to bitcoin it's a simple set it and forget it way to grow your bitcoin easy bitcoin is live right now on ios and android hit pause click the link in the description download the app and start earning while your bitcoin stash grows your capital is at risk crypto markets are highly volatile and this content is informational and not financial advice um i i saw uh will clemente had this great tweet where he basically was like the sentiment in the like crypto group chats is people are like just quitting they're just going and they're looking at other asset classes like everyone is super disappointed it feels like uh it's the only group in the world bitcoin's the number one performing

Starting point is 00:28:07 asset uh class and still people are disappointed right but they're disappointed they why is this thing not going up more gold had its run why is bitcoin not at 200 250 000 what's your read on bitcoin and are you giving up are you walking away no that so a couple things um freeze frame jordy's reaction right there number one um beginning in may and in early july there were a lot of i i want to say rumors flying around but they weren't they weren't just rumors and i'm i'm this is not speculation. Anyone can go look this up. But there were stories about China cracking down again on Bitcoin miners and non-crypto ownership and blah, blah, blah. And it got poo-pooed and everything went on. Since those stories came out, there's been an

Starting point is 00:28:56 overhead of supply that have gone through. And I just want to make sure people realize there's two themes as a traditional finance person that has spent a lot of time trying to take the lens that I learned everything through, which was as a trader, as a macro person. So I think the reason I shake my head at Bitcoin is because every possible thing to everyone listening that you would want for Bitcoin is happening right now. Meaning the government is supporting things. The financial guardrails are shifting. We've got news after news every single day about the financial guardrails becoming more digital economy. It's things that are necessary for the network effects to kick in. All of that has happened. We still see inflows from retail.

Starting point is 00:29:41 We still see the banks now opening it up for people to go through. But there's clearly a bunch of whatever it is, OGs, Bitcoin miners out of China, whoever it is, large amounts. Mike Novogratz publicly said it. If you go back to July, there have been billions and billions of dollars of, let's say, original investors supporting Bitcoin, regardless of how you want to term it. So I'm writing a sub stack. I think what people should think about is we don't have an IPO for Bitcoin, but this last four months to me feels like sourcing the pricing of the IPO where the original investors are getting out of large chunks. Now, why is there ever an IPO for monetization? If someone has 9 billion in Bitcoin, I mean, I think they should diversify

Starting point is 00:30:29 a little bit. If it was related to China, guess what China has now that they haven't had since 2014-15? A bull market in stocks. Guess what else people have? Well, they have the chance to invest in AI. AI is a 10-bagger in many cases. You've been able to do it in the public markets. So I think at some point, Bitcoin becomes a boring asset to people who are looking for three-baggers, four baggers, five baggers. It becomes a diversification. So I think this is just a distribution of a few massive holders. And the weaknesses I have heard about Bitcoin as I've gotten into it from institutions, it's too volatile, not too volatile anymore. We've taken the implied volatility and the actual realized volatility down to 30 and below in

Starting point is 00:31:15 some cases. So the vols come down. OK, what's the next thing? Well, it's too concentrated in ownership. I mean, I've gone through the numbers. When you add Satoshi's wallet, you add the other whales, you're talking about about a third of it has been owned by not many people. I think like 10,000 is the number I heard, regardless of what the right answer is. Every month, the Bitcoin iBit outstanding shares goes up. It's up again this month, even though the price is down. So I think everyone that's depressed has actually become entitled. I think they think it's a risk asset. Oh, there's another one. This is just a risk asset. Okay, well, it's not going up with NASDAQ. So that's good. Lower correlation. Well, it's just digital gold. Well, it's not going up

Starting point is 00:31:53 with gold. So guess what? In portfolio theory for everyone who hasn't bought any yet, I think with your stocks, with your gold, with your bonds, now there's every argument to make. It's lower volatility now, lower correlation with the other traditional asset class, diversification from gold. I think this thing is going to move higher. I was wrong about where I thought we'd be at this point. It's still up for the year. I think once this consolidation is done and we're through the ipo process and the fundamentals take over next year once we get through clarity and the beginning of tokenization and the stories of zell and everything along those lines i think we're going to have an acceleration in it so it does feel like we're now hitting this point of like

Starting point is 00:32:30 uh bitcoin and crypto are eating wall street right so i'll give you a couple of data points obviously bitcoin has become you know infiltrated all these portfolios for many of the reasons you just described we have the uh um you know financial advisors coming out uh uh rick edelman And many of these people, you know, hey, up to 40% allocations, you've got the ETFs, you've got the public companies that are embracing this stuff. You also are seeing, you know, earnings from Coinbase, where they're doing $1.9 billion of revenue, you know, $400 plus million of net income, they've got enough assets on their platform, where they would be a top 10 bank, they've got double the number of assets on their platform compared to a Robin Hood, you then you go and look at stablecoins. I think the stablecoin rush is similar to like the ICO rush back in 2017, not in terms of the products being similar, but just it's sucking all the air out of the room. Everyone's running towards the stablecoin, trying to build them, work at them, fund them, etc. And then you kind of say, wait a second, now the payments. And you look at these payments and it does feel like the Zelle thing.

Starting point is 00:33:30 It does feel like Venmo and PayPal, MasterCard, Visa. They're not going to let this go away. western union just came out and the ceo said stable coins are not a threat it's an opportunity right western union stocks down 50 five years nobody believes that they're going to capture the stable coin thing maybe they will but it feels like crypto has now hit a point where they're not knocking on the door anymore they've kicked that thing wide open and it's game on and so this is all going to become finance you know kind of crypto industry will be dead in 10 years because people just talk about finance but is all that fracturing energy and capital away from

Starting point is 00:34:08 bitcoin right like where bitcoin was like you know i almost think of like bitcoin was the main show maybe you had somebody people stuck around for like the after show but bitcoin was the main show people showed up they watched and they went home now there's like 20 stages and people are looking at all the different stages and Bitcoin has some attention, but not everything. Okay. We're at a very important point where let's leave Bitcoin over here and I'll get to it at the end. We haven't really talked about this, but I want to make sure everyone realizes that when you go into a coffee shop and you take out your credit card and you pay for your coffee and you leave, the coffee shop makes money and that's fair like they they brought you a service but the credit

Starting point is 00:34:57 card company makes money and if you have your money in jp morgan a bank for america or any of the big banks guess what they're also making money and the reason they've made money is because of the float on the money that you have meaning you've got money in there and unless it's in a money market fund they're investing the money you have they're giving you almost no interest if zero. So everyone makes money constantly on the friction. If you're slightly late on a payment or if whatever, okay, now there's a massive penalty charge. If you do a wire, massive penalty. As everyone is hearing the stable coin thing and they're going through this, we are at the beginning of the disruption to the biggest friction there is in all of our life and all

Starting point is 00:35:36 companies' lives. The float on an Uber driver, when they get paid from the time that you pay, who has that money until the Uber driver gets paid in two weeks, three weeks, whatever. everything will be instantaneous you take an uber drive stable coins are paid they get their share the company gets their share all of a sudden all the friction the taxes the vig it's literally just a vig so when you mention coinbase and you mention all this the the financials the banks and all this they are racing with stuff like zell they want to keep control of this vig even if it's a smaller vig they want the vig and so you're going to see this race on all of this stuff and so what it's doing is it's speeding up the process. This is the network effects taking off. So they don't want to

Starting point is 00:36:19 lose to Stripe. Walmart's saying they're going to do it. Shopify is going to do it. Everyone's going to issue a stable coin. Everyone's going to do this. So to your point, there's kind of a bubble feel. It's an ICO feel. It's all going on. But the reality is the government just opened up the regulations and said everyone can participate in this. OK, well, that's going to speed up the process because everyone's racing for the profits that are available. They're not saying I'm going go slow on this anymore. And banks would slow everything. They already lost that fight. And that was a genius act. Before that, they were the ones slowing down the process. So I think people have to remember that with something like Zelle or any of these places, the more money that moves

Starting point is 00:36:55 into stable coin, the analogy I've said to people are there are two casinos. When you go to Vegas, one is this old hundred year casino and the other one's this new shiny casino. Everyone who's been using the old casino they still have nostalgia and memories and they walk into it and it's a dilapidated piece of garbage but it's like i remember when my kid was born and i was playing that slot and everything else all the money's there the chips are there if all of a sudden for some reason they end up in that new shiny one and they test it out and they're like this place is beautiful this is nice smells nice good over here it isn't stale you know how fast the chip stack is going to go from there to there and be converted in once you open it up so i've

Starting point is 00:37:36 always said the adoption for wallets is very difficult well if the adoption for wallets is now presented by the banks who you trust it's over and that's what's going to accelerate over the course of the next year i interviewed the um uh head of consumer and business products at coinbase uh this guy max brandsberg and he has this idea that he talked about that just stuck my head now it's called the defi mullet so the front end is like the easy coinbase experience that you trust in the interface all that and then back end is they're just swapping out tons of the infrastructure into uh the the defy stuff now the banks may not do defy they may still do centralized but it is that interface of whether it's jp morgan or fidelity or whatever and now they're going to

Starting point is 00:38:13 give you exposure to stocks 24 7 you don't care if they're tokenized or not tokenized can i trade on saturday or not yeah right um there's this great piece by ribbit capital they just put out called token revolution uh genius ai tokens crypto tokens what's your reaction so i i listened to this podcast bell curve which someone had recommend um that i listened to and it was really interesting to hear as someone who spends their time with tokens and analyzing what it means for the stock market but then to take it and convert it back to things that like dan ives is involved in this whole world coin thing and just kind of this token is orbs right orbs yeah this tokenization of identity. Okay. There's a token for Anthony, for Jordy. Our identity is

Starting point is 00:39:07 there. They talk about a tokenization for value, all the things you own. So the tokenization of the fiat system, everything that we own becomes tokenized and now it's a token. But then also the tokenization of your healthcare. AI is going to be heavily involved and they need the analytics on your DNA. Everything is, at the end of the day, somewhat based on code. We all have a unique identity. Okay, well, that's where the identity comes from. We all have unique values. We all have unique ownership. That becomes another thing. Think about how smooth the transaction is. So what they were talking about is for AI agents to actually transact on all things with each other, they need these identities. And so this is the merging of AI and crypto through this world of

Starting point is 00:39:49 tokens. And I thought it was an eye-opening thing for me. And I listened to futuristic stuff all week. This one really got me because it hit on the concept of tokens in both worlds. And I think it makes perfect sense to kind of think about them in those ways and think about this merging. Because in the end, the token, the synthetic dollar, the stablecoin, where we're going to be in five years is the volumes of stable coins is going to be so massive. And the valuation of tokens and everything is going to be so big. People need to invest in this. And the way to invest in it is, yes, you can go pick on public equities. You can go pick on Bitcoin miners, which are now showing their convergence with AI. No matter where you look right now, the convergence between AI and

Starting point is 00:40:38 crypto is getting clearer and clearer. And that was the reason why when I was no longer in the every hedge fund i talked to did not have a view on ai and did not have a view on crypto that was from the perspective of it being a macro event they viewed it as a technology well that's handled by xyz we're not doing that here we're doing this it's a big mistake because the world is basically going to be ai and crypto combined and this other casino that is old the only reason it's still alive is literally what i described which is nostalgia it's fighting from the casino to almost like not let the other people get in having this big shiny lights it's all changing rapidly and i think people still need to view that bitcoin at the end becomes the thing of value that appreciates

Starting point is 00:41:23 and where you put your money if you want growth and if you want it to just sit there in stable coins maybe you'll get some interest on it but if you really want to have value you're going to move it over here oh bitcoin is the hurdle rate shocker um all right last thing i want to talk about very quickly is uh adam jonas at morgan stanley has come out and basically said uh he's calling it I think it was the exact language. I'm calling it. Autonomous driving is solved. And he went a step further and he said, we can pull the safety driver.

Starting point is 00:41:48 So those who don't know how the self-driving cars work, many times right now there's a person who still sits there. They're not driving, but they're there in case anything is going to happen. They can intervene. He's saying, get those people out. This is solved. He's not predicting that there will be zero accidents ever, but he thinks that they are going to be so few and far between that now these cars should be driving in major metros with zero safety person. Autonomous driving is solved. Let's move on to the next big problem.

Starting point is 00:42:10 do you think so first of all um i love adam jonas um he had a huge influence on me on my on my um merging of getting rid of recessions as my mindset and me going to silicon valley in 2013 and then speaking to adam jonas not too long after that and hearing his view of what tesla was doing and adam jonas is a very controversial figure in on wall street there's a lot of people that when i say his name they go oh god here we go and that's because of tesla he's been the only person to kind of talk about tesla that i'm aware of in this way that is an auto analyst that's the key thing adam jonas was an auto analyst and right what's that and right yeah and right and tesla is not an auto company and elon musk says that openly so the problem is like most things in the world

Starting point is 00:43:02 we live in it doesn't fit in one of these verticals that people were trained to believe So if you talk to a traditional auto analyst, they focus on the auto side of the business. Last week, we've talked about the importance of Tesla. I did in my video last week, I specifically highlighted this as the moment where I highlighted in yellow. He said he expects there to be no safety driver in Texas. Now, Adam went a little bit further and he said they can already do it now. They're the ones being extra cautious.

Starting point is 00:43:33 The reason that's important is because Texas, the state, is allowing them to do it. What people have to realize, again, and I said it last week and I'll say it, this is the moment because autonomous vehicles, the way that he's designed them with cameras, not with LIDAR. So, again, not with geofencing, going up to the cloud, blah, blah, blah, but actually thinking on their own and making decisions solely by cameras, sending the data of all of the cars he has and training constantly. So the Andre Karpathy interview last week with Dwarkesh Patel, he was one of the architects and the engineers based on this. He talks about AGI being the moment when we actually can have the physics part brought in. Right now we have the textual part. You eventually need to have the visual part in. once you have the visual part it's game over because then humanoids can go so the autonomous thing and what he was talking about and if you guys haven't seen it yet i referenced it before here i referenced it everywhere the robots are coming is a documentary that adam jonas basically did through morgan stanley which is where he works and it came out in june of this year

Starting point is 00:44:41 i highly recommend everyone download it watch it watch it multiple times because that video talks about this being the gateway to this world. What he's saying last week, which I happen to agree with, is the ability for them to do this without the safety driver, where the cost of a robo-taxi will be anywhere from 40% to 70% less than an Uber. How is every city in the country, when the voting is going on in New York City for a socialist approach, not going to be voting for things that are cheaper? we are in a world where we need deflation not inflation deflation costs jobs with the people

Starting point is 00:45:20 that are going through the inflationary problem they want deflationary free things and this was a big thing what you're going to see is what's happening in san francisco i don't know if you you know they set the way most on fire stuff like that but also i don't know if you saw a bunch of people went to the longest dead end in san francisco and they ordered a ton of waymos and so they all showed up and they got stuck right and like they're gonna screw with the cars like that that's ultimately what's gonna happen it's not gonna work uh those people are gonna look stupid in the long run and technology is going to win. I feel for the people who are going to get displaced, but it's technology is a trend. That's what's going to happen. All right. Usually

Starting point is 00:45:53 I ask you where to send people on the internet, but I was thinking about it today. This man comes here every Friday, does a fantastic job. We publish it on Saturday morning and he needs you guys to go to YouTube, search Jordy Visser and go subscribe to his YouTube channel. It's the least that you could do. It's like a thank you for him coming and sharing all his alpha with you guys on every single day. And then on top of that, go to Substack or go to Google. You can just type in Jordy Visser Substack and go and subscribe to that as well. So if you think that he's helped you in any way, made you think differently, helped you think better about your portfolio, anything, the thank you that you can give him is to go subscribe on YouTube and go subscribe

Starting point is 00:46:28 to his Substack. He'll appreciate it. I'll appreciate it. And maybe actually he'll send me a text tomorrow and be like, wow, people actually listened to you. So please go do that stuff. And we'll do this again next week. I'm going to bring you a bagel next week. All right. Thanks, everyone.

The Pomp Podcast - The Truth About Why Bitcoin Isn’t Exploding (Yet) | Jordi Visser

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