← TFTC: A Bitcoin Podcast
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- [00:07]
A
You've had a dynamic where money's become freer than free. If you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for bitcoin. If you're not paying attention, you probably should be. Probably should be. Probably should be.
- [00:36]
B
Jordy Visser, welcome back to the show, sir.
- [00:39]
A
It's good to be back. Marty, how you doing?
- [00:42]
B
Doing well, doing well. Like I was saying, it's a bit colder than I'm used to in the fall, having lived in Texas for the last four years, but getting used to it and very excited for this conversation. As I was saying before we hit record, your weekly show has been a staple of mine for many months now, and I really appreciate you putting it out there.
- [01:03]
A
I love doing it, but I really like it when it helps people. So I love hearing it.
- [01:08]
B
It's great to have you here. I think having been in Bitcoin for 12 years now, sometimes it feels like anything that can be said about bitcoin has been said. But you wrote a piece of a couple of weeks ago that I think was incredibly insightful for a lot of bitcoiners, particularly those who came from a cypherpunk and libertarian background, not really understanding why the bitcoin price is hovering right above 100,000 or 18 months past the halving. We're supposed to be experiencing a parabolic bull run, and many people are scratching their heads wondering what the heck is happening here. You wrote a piece about bitcoin's IPO moment, really anchoring to experiences you've had in traditional markets, saying that this reminds you of the post.com bubble burst sort of atmosphere that was the case for Internet stocks like Google, Amazon, and I think it was incredibly compelling. So I think starting there and jumping off with bitcoin's IPO moment would be great for the audience.
- [02:16]
A
Yeah, I think you hit on a couple things that I haven't spoken about before, but you reminded me first is, I think, to have a fresh look at something that helps with the fact that I really didn't spend an enormous amount of time on the space until the past couple years. And I think my entree into really believing in bitcoin was back in 2020. So I'm. I don't have the history of watching it go from, you know, from 10 to 100,000 for the entire time. But what I do have is a lot of experience with, with the dot com bubble. And for those of, for, for those who haven't heard me talk about this, I mean I was at the heart of it in the prime of my kind of use back then I was running an index book for Morgan Stanley, I was running the ETFs for Morgan Stanley. And that was back exactly at the dot com bubble. So I saw it knock these stocks down. And for those wondering if AI is a bubble or whatever, it's not. There's no way to compare what was going on in 99, 98, 2000. And I've talked about it on my weekly. But the period coming out of the dot com bubble, it took a long time for the NDX to get back or QQQS to get back to all time highs. I mean we're talking well over a decade from the lows to get back to the highs and even longer from the peak. And so over the course of the last six months as I wanted to look at why, the same thing everyone else was frustrated about. Meaning I thought we would have been, you know, at least three times where we are right now, purely based on the network effects that were kicking in, purely based on the government that was supporting it and the fact that I thought everyone would front load kind of the performance into this year. And instead we got the opposite. And so I had to spend time asking what was happening. I had to spend a lot more time going through and talking to people that had been in the space for a long time. But I really spent a most of the time with the people who had transitioned from the traditional finance world to this. And it was through those conversations that it became more and more evident to me that this was very similar to kind of a, as I wrote about it, a silent IPO that bitcoin had just reached a point where there's no reason for someone to own $9 billion of Bitcoin. Like it doesn't. There's no rationale that I would have. In fact the way that I spoke to people about it, I let's assume OGs have sold $100 billion and you sold 9 billion. Okay, how much money do you have in other assets? If you've got 9 billion in this one and if you were starting a portfolio today, would you buy 9 billion of Bitcoin? And the answer is no. You want to diversify no matter what your views are on it it's there. Secondly, this is what happens in IPOs is that you get the original investors who took the most risk. The risk when it was completely not something obvious when you had to fight through the governments and you had to fight through the non believers. I mean even now as someone who's involved in. I can't believe how impossible it is for me to convert anyone in the traditional finance world. So imagine how difficult it is in my mind to think about everyone that had to go through this for the past 15 years when it was small. I think that's really where the reality set into me that all of this selling that's been happening, that's trapped the price, that the decline in volatility reminds me a lot of what happened after finally the dot bomb couple. The dot com bubble reached a point and Google came out as an IPO in 2004 and so did salesforce.com those things have gone off to just massive obviously importance over the world. They had great outperformance. And so I think the thing people should be thinking about is that the next 20 to 25 years in, in bitcoin and I didn't write about this in that paper, but I did in the substack I posted this week. This is about the democratization of the use of crypto as opposed to the ideology around libertarian. You know, as you said, the cypherpunk kind of mentality that existed even with the beginning of the Internet. But eventually if you want an asset and an innovation to grab everyone, which is what's necessary at this point to get it to the sizes that people are talking about, it has to be fully democratized. And to be democratized is not the same as the libertarian movement. There is ETFs that are needed, there are having it in terms of remittances, you need stable coins. All of these things were a necessity. And so I really do think we are in the post.com bubble. And for people that are a little worried about kind of a 10 year process, this thing has been consolidating now for a reasonable amount of time. And I think bitcoin time for bitcoin ends up being much shorter than it does in the developed market or the traditional market. So I fully expect that next year is going to be a big year for not only crypto, but for bitcoin.
- [07:31]
B
And it's really interesting to observe sentiment on X particularly. It's down pretty bad. People are very bearish thinking we're going to turn over and head back down into the 80,000 some people even say in 60,000. But I think a really good point that you made in that piece and that people really need to internalize is that, for lack of a better term, this is bullish distribution, because you're taking the supply of bitcoin, which was previously held in relatively few hands, and distributing that to many more hands who have different time horizons, different needs at different given points in time. And I think one can make a strong argument that this is actually bullish at the end of the day, because you're distributing supply and it's going into the hands of people who probably are going to wait for it to monetize even more before they decide to do something with it.
- [08:25]
A
Yeah. So here's the funny thing about this. I think I've now started. So I do this in the traditional world in terms of thinking about the flows. Retail has had a huge impact on the stock market this year. It's obviously had a huge impact on bitcoin over the years. But the more that I've spent time and I listened to an a16z podcast about their, their state of crypto for 2025, and it was really, really good and people should listen to it. But one of the things they, they kind of hammered across to me is this. I'm breaking kind of the. What will be fueling this distribution over the course of the next 15 years down to three components. One is obviously the institutional adoption, which is we all see increasing, we see it being now brought up in the banks. Everything's just going to continue to grow and, and that's going to continue to happen with just everything with inside the space, in terms of the institutions getting involved, you'll start to get more pension funds involved. You'll start to get that institutional adoption going. But when you break it down, the developed world has a trading mentality with bitcoin. So the sentiment goes up and it goes down. If you're not making money in it, you're looking for something else to make money in. Trading and gambling is a part of this culture. It's a part of the. The group that matters for not only bitcoin, but for a lot of the AI stocks. When you get into the developing world, that's a different story. They own Bitcoin. That ownership in a lot of countries is more dependent on the part that Michael Saylor talks about, which is hiding your money away from the governments, from true debasement, not what we go through in the United States. I really recommend that people go spend some time living in Argentina or Brazil as I did for some of my years, and get to see what true debasement is. What we're going through in the US is not true debasement. The GDP per capita of the US is higher than every other place in the world that owns this much Bitcoin. So I think what we just have to get used to is that the developing worlds treat both stablecoins for remittances and for transactions in a way to have stable value. And then when you get into the potential of actually growing your money, that's where bitcoin fits in, that ownership. And that redistribution is not only only happening with inside bitcoin, it's happening with inside the globe. And this is the argument that got me attracted to bitcoin in the first place. Not because wealthy people in the US would buy it, but because of the transfer of wealth from the demographics in terms of the ownership in the US going to a younger cohort, but then also the entrepreneurs of the world that are going to benefit from the democratization of education, the democratization that comes to our artificial intelligence, but also through banking. And that growth is going to happen every year. And so you'll get the fuel from the developed world in the US and Europe and places that have money with the kids that are trading it. Once we get momentum going again in bitcoin, they'll be involved again. But for the time being, there's a. There's a growing bid underneath which has offset all of the OG selling. And that's why to me, this is a very positive distribution that's going on. To sell 100 billion from a few people, someone has to buy 100 billion. And this is going to a lot of groups of people.
- [11:42]
B
And then on top of that, you add Square's big rollout of merchants, their sellers being able to receive bitcoin payments or just simply automatically convert a portion of their cash flows in the bitcoin on the back end. Obviously the number that's being thrown around 4 million merchants across the U.S. and yeah, let's say a tenth of those actually turn on cash conversions to 10% bitcoin. That could be material in the long run too. And so the infrastructure is getting built out. It's all there. I've never been more bullish, personally.
- [12:18]
A
No, And I really think the Zelle news, when that came out a couple weeks ago, was a big deal. Not because obviously it directly goes to bitcoin, but I don't think people realize how challenging it was for people to even get around the concept of opening or having a digital wallet. So for the baby boomers control close to 90% of the net worth on the planet, at least when you get above the age of 65. And when you go through the demographics of ownership of crypto, you're completely on the other side. So if baby boomers would never get a digital wallet, well, they would use Zelle, they would go through a bank. And if they automatically have a digital wallet, it opens up the potential. And I used to joke with people on DraftKings and FanDuel that the second someone opens an account on there, their life changes dramatically and all of a sudden they start gambling. It's almost impossible for someone to watch a game then and not be involved in it. And I think once a digital wallet comes in and it's almost instantaneous, that you can take excess cash and make a decision on where it goes. You mentioned the commerce side. I'm heavily focused on the tokenization side. I think tokenization is just a natural next step of how you get the massive amounts of volumes going through the economy. And as Caitlin Long said recently, the velocity of money is just going to pick up with all of these advancements.
- [13:46]
B
But it's funny you mentioned Caitlin Long because I was just going to mention I saw a clip of her on a show earlier today saying that the ACH network is going to be completely replaced with stablecoin and token infrastructure by 2030, which is not as long as I would have expected it to take. Only four, a little over four years from now, considering.
- [14:09]
A
And again, the financial guardrails for bitcoin to get to the level it did without already having the financial guardrails set up. It just shows how the governments can stop anything. But money is the last thing that governments want to allow to actually have any kind of innovation involved with it to lose control. And so what Caitlin's talking about, I agree to have it happen five years from now. It's one of the most significant things that's happened in the history of capitalism.
- [14:38]
B
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- [17:00]
A
Yeah, this is something I'm spending. There's two concepts that I spend a lot of time thinking about. It's hard for me to find writings on this. It's hard for me to find people who think this way. Because when I start getting into abundance and just the viewpoint that if stablecoins end up taking most, if gradually the money moves into this world, the leverage in the fiat system comes down and there's this kind of, okay, less leverage, more velocity. And that's what Caitlin was effectively talking about. If you leave the fractional reserve banking system and you move it into crypto, and we actually have kind of a one for one mentality, as opposed to a nine to one or ten to one mentality, there's a process that has to go on. And the second thing is just this concept of time. This is all happening so quickly. And artificial intelligence has the same component of getting rid of leverage. And the leverage that's been in there is not necessarily through money. It's getting rid of the leverage in people, meaning in a business, how many people you need to work in a company. And that process is a form of qe and the fact that earnings per share go higher. I was listening to someone today who said the economy is now very circular, and it is in the United States especially, it's completely financialized. So if everyone, you know, gradually is replaced through demographics, not through job losses. And I want to make sure that people understand this. I do this weekly thing to highlight that there's no hiring going on, but there's a natural attrition in people working in the workforce by the demographics. So if we have a combination of people leaving the labor force because they've made too much money, because the net worth in the country is now $180 trillion, those people don't need to work anymore. So think Jeff Bezos sailing around on his yacht, doesn't need to work anymore. Those people, as they gradually leave through making money, there's no one to replace them. As people get older, there's no one to replace them. As people get transfer payments and they retire, there's no one to replace them. So there's a loss of jobs. That happens about 300,000 a year purely from that. And the way immigration is changing. I mentioned this on a podcast recently. Immigration was a way for governments to try and figure out a way to continue population growth, which was a way to keep GDP going. So no one wanted to end up in the Japan trap, where you start having a shrinking population and you. And you're stuck in deflation. So these countries, whether it was Europe or the US wanted to have more immigration to help the population growth. Well now with artificial intelligence, you're messing with all of that. Companies are able to grow their earnings through operating leverage. And the way that I did the math on it, for every QE dollar that went in to basically take rates to zero, companies were able to issue debt and then go out and buy their own stock. So they would issue debt at close to zero and they buy their stock with an earnings Yield close to 6%. Throughout the 2010 to 2019 period, financial engineering, you had commercial real estate, you had private equity, you started to get private debt, private credit. All of these things that were happening because of the ZIRP QE world, they're not happening anymore, but the economy is still growing. The reason the economy is growing is because of artificial intelligence. It's a combination of the build out that's happening, but it's also a combination that's coming in of, hey, we don't have to hire as many people and you get the operating leverage on top of it, which is more than one for one. So the new QE for keeping crypto going, for keeping the fiat assets going, is actually in this replacement of people and this ability for companies to become more efficient, to grow their numbers. And that will allow crypto to continue to gain strength. Because if the S and p went down 40%, we'd have a problem because then the liquidity is going down and there's nothing going on. So it's the reason why I wrote the paper on it, is that people don't think of artificial intelligence that way. But the reduction of people at a time when we need that because of demographics is actually a very helpful thing for the productivity of the country.
- [21:13]
B
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- [24:01]
A
Yeah, the next five years is not going to be easy. And again, I don't think people are going to just lose jobs. But I do think the concept that people have to understand is they focus on job losses and unemployed. The psychological side is underemployed. You went to school, you got an education, you got a degree, and you were either hoping or believing that you would have a job in that field. Well, not all those fields exist going forward because AI will disrupt many of them. And some of the ones that people spend the most time going to school for, whether it's on the lawyer side, the healthcare side, in terms of doctors, AI will be disrupting every job that we're involved in. Not overnight. It's not for people to get scared of, but the rise is for people who want to be entrepreneurs. And the difference between an entrepreneur and actually working in an office or managing people, you know, you're getting paid by the hour and you get a better balance of life. And so I've said always that, you know, when I was young, my father, who was a construction worker, I mean, he died recently. He had knee problems, he had hearing problems, all as a result of hard labor. A lot of the baby boomers worked in fields, particularly in. In the middle of the country, in. In industries that have hurt them over time. And I think young kids don't want to go into that. I didn't want to go into construction. My father had a good math brain. He. He taught me a lot about handicapping a horse race and thinking about odds and going through all that. So that's what got me into the stock market. That's what got me into Morgan Stanley. That's what eventually got me into crypto. And so I got to live a different life. I chose not to stay in the hedge fund world this year because I wanted a better quality of life where I actually wanted to do three things. One was spend more time kind of analyzing things and doing deep thinking. I'd always written and I had always done these sort of. These videos, but it was mainly for my investors. And I just thought there was a chance to kind of do what I thought was always told that I did well, which was take complex things and explain them. So that was number one. Two is to get more hours back in my life where I could be in Maine all summer and I could be skiing all winter, which is what I want to do. I love nature and I love being outside, and that's what I'm set my life up to be able to do. But the third thing, and probably most importantly which is why I do these things and why I'm. I'm spending more time in artificial intelligence than most people my age. Is I actually wanted to help people get through this point. I had always managed people since the time I was 29. I think people that have worked for me and have known me know me as someone that cares about other individuals and how they can get smarter. I'm not, never been scared of anyone kind of taking my job. The only reason is because I figured if someone took it just like a great sports player, then it would force me to work harder and learn new things and keep going on. So I think we're in a world where it's going to feel bad for people who are going to think things should come to them. They might be entitled, they may have believed something they heard. But once you get through the realization and you're young and you have to fight through it, I do believe that it's human instinct when the pressure is on for people to stand up and figure things out. You've never had a better time to make money because of artificial intelligence. And I think people, if people will be patient with bitcoin and just realize that the advantage for them is that bitcoin is a $2 trillion asset going to 50 trillion, 100 trillion. I don't know what the end game is, but it's not going to stop going up. And whether it comes from a transfer of wealth or whether it comes from people fighting back in kind of this fourth turning revolution where they're looking for alternatives, I still think younger people have a better chance of benefiting from that from older wealthy people.
- [27:55]
B
Some interesting insight into how Gen Z is saying. Long story short, I spoke at Penn last week on a panel at the Penn Republicans Club about bitcoin with with a few other bitcoiners here in Philadelphia. It was great, enticing conversation. The students were very intrigued and asking good questions. One of them actually followed up with me. We hopped on a call last night and he's studying finance, looking to get into investment banking. Asked me like, what should I do after school? And I told him, study bitcoin, study AI. Don't be afraid to mistake, to make mistakes. Don't feel like you need to actually figure out what you want to do for your whole life right out of college. We live in this crazy time and I think it should be adaptable and try to use all this stuff and know as much as possible. But it is, it was a hard question because kids like 2021 going to intern at Goldman, like what should I do? I'm like number one, congrats on that. You're much more successful than I Was at your age in college. But I don't know, it's weird times. You just got to try to keep a grasp on things as they're accelerating forward.
- [29:11]
A
See, the funny thing is, once I left the conferences that I used to go to, which I, I mean, I stopped really going to them probably about seven, eight years ago, and I would just go out to Silicon Valley or go to Singularity University or someplace where I'd be learning. But because of the relationships that I've built in crypto and speaking at conferences, I've had the chance to meet more and more people who have taken control of their finances and kind of figured out this balance between a job, what it is, why you have to do it, how you choose that job, but then how you supplement your income, both through Bitcoin and through financially being aware of trading and things like that. So one of the things that, you know, I made the decision, which I'll start rolling out at the beginning of next year. Since you watch my videos, I spend, I mean, I hate to tell people this, but I probably spend six to seven plus hours a day in one of the LLMs, if not all of them. Before we got on here, I'm writing a paper for, for 22v on CoreWeave. Core Weave reported earnings this morning. Stock was down 15% when we started this. And on the call they said they had insatiable demand. They talked about endless demand for artificial intelligence in their business and they had to lower their CapEx numbers. And the reason they had to lower their CapEx numbers was from bottlenecks. So I've started writing about what this means for the investment side for next year and the way that I think investors are going to have to change their playbook from this year to next year. Everyone thinks when it comes to trading, there's some kind of like, science that you need to have had an advanced degree. And that's not the case. You have all the information you need in artificial intelligence. So what I'm going to do is basically create a video series which will show people how I go from a podcast or an earnings report to down to ideas, how that turns into other ideas. And then if you're sitting at home trying to trade, I think the great thing about going out to these conferences and talking to younger people that have been successful. When I say younger people, it's people generally in their 30s at this point, but also some in their late 20s. And what they've realized is, number one, because the government is debasing everything the stock market goes up 80% of the time. So the odds are in your favor. You don't get those kind of odds at Vegas. You don't get those odds at, at the racetrack. And so it's hedge funds and it's people like that that are cynical because they have more money to lose. But the reality is they have to keep doing it and there's no way to get around it. So if you want to go make some extra money, learn how to trade, put a process in place, find the names that are out there that are doing well before the hedge funds go find them. But even if they do find them, they can't ride them the same way. And so I believe there's a way to go through and use AI to figure out your finances. And that gets back to the point that you made to the kid at Penn. Learning artificial intelligence is actually just using it every day. Once you use it every day and you start getting your brain trained on I wonder if I could do this and that. And the answer is generally yes. I wonder if there's any new things that AI can do that I could build today. Yes. The answer is always yes. And if it's not today, it'll be tomorrow. And the more that you spend time, and I've seen it with my own son who's a sophomore in college, his ability to pick up things and build things now is off the charts and it's solely by using it every day. So the people that are listening out there that have kids that are at the age now that maybe they're in high school, I would really get your kids to spend the time on it. And of course, when watch my video on Sunday and they can, they can see how I'm using it, at least learn a couple things right now.
- [32:56]
B
Well, I think I know the answer to this series of questions, but I think it's important for the audience to, to hear it straight from you. But what would you say to the skeptics who say these LLMs, they hallucinate, they're not reliable yet. ChatGPT just have to stop giving medical and legal advice. And yes, it seems like all is well and good and that demand is insatiable. But if you pull up the chart of the inter dealings between Microsoft, OpenAI, Nvidia, Coreweave where it may be, it seems like it's just an Enron, like round robin.
- [33:30]
A
I mean, the answer, it'll be funny if I give the answer that you actually thought was in your head. My father, when I was very young and when I'm going to say I was 5. So I grew up Catholic. My mother sang in the choir. My kids went to Catholic school. My father was an atheist. And my father believed in nothing. And I mean, when I mean nothing. He believed in nothing. And one thing he said to me that I've used in almost every speech I've given in public is he said to me, do not believe a single thing any human being says to you. It is not a fact. It is someone's opinion. So when you get back to hallucination, LLMs are far more accurate than human beings are. I have yet to meet a human being that doesn't tell me a story. Story about something that I don't go back and fact check. And when I go fact check a human, I go fact check. In LLMs, if an LLM gives me an answer, I'll take it into another LLM and check and ask if there's anything that's wrong in there. They've gotten way past the hallucination point. If you do, if you, you know, pay for the highest service, if you thinking where it slows it down, you're going to get less and less. But it would be a mistake for anyone who's accumulating knowledge, because when I ask you, where do you accumulate knowledge from? Well, LLMs accumulate knowledge from the same place that human beings do. We all learn from something. Our formative years are just like a training model in terms of an LLM. So I just think the people that have focused their attention on looking for negatives, the analogy I've given is you don't want to wait too long. And the way that you hear that is if you have a serious medical condition and the doctor says you should take this drug, and you ask, well, what are the side effects? All the things you mentioned are the side effects with that AI. I'm telling people if they don't use AI today, they are basically killing themselves in the work world. They will have no chance of catching up. This is not a tool that you can all of a sudden just jump on and go through it. It takes reps. It's just like cooking and using a knife or anything else. If you want to get very, very good at it, you have to use it all the time. And all I hear when people talk about the negatives are excuses as to why they don't want to use it.
- [35:54]
B
And what about the sort of inner dealing between these companies?
- [35:59]
A
I mean, it wouldn't be happening if there were more companies that had the money to actually do the build out. But part of the issue is the concentration. I mean, we hear all the time about how concentrated the market is. If the market wasn't concentrated, bitcoin wouldn't be at the level it is. Like, this is very circular for people to hear from me, but the reason that I ended up believing in bitcoin is not for the reasons that everyone talks about. Every time I hear someone on one of these shows say, well, the dollar is going to weaken and that's why bitcoin is going to go up. I made a reference which I've never talked about on one of these podcasts. In fact, you'll be the first one to go. But because I wrote about it in my substack. Michael Milken is one of the smartest people that I've had the privilege to sit in a room with and have a conversation with and brainstorm. And he and I were in his, in his library in California and we were having a long macro conversation about the future and debating. And I kept harping on the fact that I thought the dollar was going to weaken. And this was back in 2019 ish. And I always remember that he basically looked at me and he finally kind of raised his voice. He said, you're not getting it. The dollar is not a currency. The dollar is a belief. And if you opened up the borders to everyone on the planet and they had one day to come inside the border and be a citizen that day, we'd have 7 billion people in America tomorrow. And there was truth in what he said. And it made me believe at that point that all of the stories that I heard about bitcoin, the debasing and all this, it's all true meaning it is causing people to lose money gradually over time through inflation, relative to the power of buying stuff. We can see it with the socialist revolt that's happening. This is not something new. This has been going on. But where bitcoin has benefited from this is the reason the white paper came in in the first place. Governments have been doing this for a long time. It is meant to, to keep the debt going and to keep avoiding pain. And the longer you go for avoiding pain, the more that you create the issue. So I don't believe bitcoin strength is about $, about the $ weakening. I don't believe it's about the debt. At the end of the day, I believe it's about exponential innovation. And exponential innovation is upon us right now. So AI and the whole growth and everything that's happening with these circular deals, they're all part of the concentration that's happening. There's seven companies winning, there's 493 companies losing. There's 10% of people in the country that are wealthy and then there's 90% that are struggling in some form to make ends meet. 70% of the country lives paycheck to paycheck. So this is not an economy or anything that is there. So if only the wealthy people are exchanging things, everyone should remember. I forget how many hundreds of millions of bitcoin holders there are at this point, But I think 10,000 own about 33%. So even Bitcoin is concentrated in terms of its wealth. So to have distribution, you need to have something that isn't happening. But the good thing is the circular deals are representation of why bitcoin will continue to accelerate and go higher. Because I don't believe any of those companies at the end of the day are worth the money that they're going. This is a spending frenzy which gives every individual AI, but those companies are not going to get the revenues that they should get from it, in my opinion. I do not believe they're in the end going to go. And I think when I was on your show the last time, the hot take moment that I had just talked about, which you wanted to talk about, was my belief that basically there'll be no public companies beginning in 2030, that all of them will basically be destroyed in some way, shape or fashion by entrepreneurs and private companies. And I still believe that's the case. It's because AI is gobbling up everything and capitalism is consuming itself.
- [39:52]
B
You mentioned the fact that we're on this exponential growth curve. And it's crazy to think and believe that we're on the very. We're still at the bottom of the curve. And to date over the last three years, the sort of AI applications that have been the most popular obviously are the LLMs with the chat and deep research. We're slowly but surely, or even not slowly but quickly moving to the agentic phase. But you've been talking a lot about moving from the digital to the physical world with robotics. And I think if I'm putting it correctly, the way you view it, it's that we can't even fathom the type of order of magnitude jumps that productivity is going to take when it goes from behind our computer screens and our phone screens and into the physical world.
- [40:46]
A
Yeah, it's a concept that I think is lost on if you believe AI is a bubble Now, I don't know what you're going to think when there's Humanoids actually, I mean, actually doing the work and what's happening to companies. And I think you're starting to see this year will be the year in 2026 that people are forced to focus on it, partly because of Elon Musk and Tesla and just the reality of Robo Taxis. You know, he's planning to have the safety driver outside of the car by the end of this year in Texas, in Austin. And Texas has already given him the ability to do this throughout the state. Once that starts, I mean, the world changes overnight. That success for him in terms of having the first humanoid, because it's a humanoid on wheels interacting with human beings. And this is different than Waymo because this is actually with a car that is using vision, so it's interacting with the physical world as opposed to interacting with satellites or geo fencing like Waymo is. It's a very different thing. And it will lead to an acceleration in Humanoids. We'll see Optimus released next year and probably factories and places and he's talking about a reasonable amount of build out next year and the following year. So to your point, yeah, I don't think the productivity numbers could possibly be something that people can comprehend. This will have an impact to elections. So for people who don't realize, I mean, the midterms are coming up next year, then you'll have obviously presidential election two years after that. The labor situation in just Humanoids and Robo taxis. I mean, there's 3 million people that work in the U.S. with inside automobiles. So you've got 3 million drivers. When you combine both Uber and just truck drivers and everything that goes on, that disruption starts next year. So you had strikes when Uber was moving into cities from the taxis and those were going on. So I think it's going to be a year to your point where productivity boom is a good thing, but not in the K shaped economy when you have so many people that are already suffering. And this is just going to add to at least the anxiety, if not the jobs.
- [43:07]
B
Yeah, because you think about Uber doordash, they've popularly become the second jobs that people depend on. They'll work during the day for an hourly wage and then try to make some extra money by driving Uber. And that second option, which is the first option for many people as well, is about to be undercut because I saw people sharing screenshots of the price of a Robo taxi versus Uber earlier this week and it's, it's going to be undeniable as a consumer. It's going to like do I want to pay $25 or $5?
- [43:38]
A
Yeah. And I don't think you can avoid it in, you know, if you get into the whole red state, blue state and you think that they're going to regulate this in blue states. Your point is the one I've made repeatedly, which is if we've got an inflation problem in cities and the affordability is the issue, you can't have, you can't have driverless robo taxis be 60, 70% less than, than an Uber inside New York City and not have, you know, the young people basically demanded that, that it be there. You're going to have a lot of issues. I this is, that's why I say the next five years are going to be an adjustment period that's going to be very, very challenging for people to deal with these headwinds that are coming. When it comes to anxiety over labor.
- [44:28]
B
Shifting gears and thinking order of operations here, you mentioned earlier there's no such thing as a dead GPU right now. This is what Nvidia, OpenAI, Google, Meta, Claude Anthropic are saying. However, there are dead GPUs. Those are the ones that can't be plugged in because the energy isn't there. How do we this is think of order of operations to get to these end states that we're discussing here, we need way more energy capacity. In your mind, what is the current state of the energies built outside of things?
- [45:03]
A
I mean core, we've highlighted some of it today. Now theirs wasn't directly related to energy, it was to PowerShells. But the power shells are from the REITs and the build out places.
- [45:17]
B
Epic.
- [45:18]
A
It's going to be a problem. I don't think it's going to be a catastrophe. I do think that the issue for next year is going because of the tariffs that went on this year. You have a lot of delays in terms of people not buying stuff. You've got transformer build out issues. If there's one thing about the tariffs that isn't appreciated by investors yet, it's the delays that you're mentioning. So Oracle's mentioned delays, Gernote Vernova has mentioned delays. They've talked about transformers and, and gas turbines are a problem. So I think to your point that the chips are there, the build out will continue, it will be global. So it's not just in the U.S. and if we don't have the power here, will be using the chips in other places. I do think next year is a year that you want to be long energy and I think you want to be long things that are related to manufacturing, kind of build out related to it. I've talked about PMI which are very important for the market as a whole. I think they're going to do well. And one thing for people listening who are, who are trading, this bottleneck problem has a lot more implications for, for a part of the market that's done extremely well. So I mentioned large cap names but also core weaves that are names that have done well with the trading community this year that are probably going to have some issues. Well I think you're going to have similar issues that are going to pop up for things like the nuclear names, uranium, everything on that front. And it's not because anything has changed in terms of nuclear is going to be a need. But I think what investors, particularly in the institutional side are going to be rewarding is earnings growth where revisions are not going down. And the problem is if core weave is having to lower their numbers significantly. We're talking about capex guide down 40%. If Oracle's saying they have capacity constraints, their stock has fallen from that 30% update that was historic. They've given back the entire gain. Now I think you're just, people have to start to shift gears and I think it's going to be a little bit more of a boring year. And to your point, I think energy, energy, energy is going to be the focal point for next year.
- [47:40]
B
Yeah, and that's the thing that surprised me. I've been in bitcoin mining professionally for six years now and the meme within the mining industry has been capacity, capacity, capacity, build out, build out, build out. And it feels like there's been an over indexing on capacity expansion which is happening at a good clip in certain parts of the country, Texas specifically. But it seems like while we're building out all this capacity, people have neglected transmission. And I know FERC dropped a report a couple of weeks ago basically highlighting okay, we can expand the capacity but we need to focus on transmission as well. Which is something that many people have missed.
- [48:21]
A
Yeah, it's a big part of it. I mean that's the issue is that the actual ability to take it from where it is and get it to, to the data centers is another issue. And those capacity issues are going to be there all next year. And a lot of these companies, particularly when you get into the bitcoin miners and Oracle as well, they're using a lot of debt to fund this. And so the problem you run into is these are long term situations. It's not just about earnings now, it's not just about what's coming now. There's a bit of it, if not a lot of it that's on specific and time is the issue. If it takes a year longer for the project to get to where it is, that's a very dangerous situation in this type of world. And one of the reasons is, and I was saying this to someone today when talking about some of the altcoins and getting into a discussion and I briefly brought this up with you. This concept of time is really important when thinking about investments. That's what made it ironic when they were floating around a 50 year mortgage thing. It's like, okay, so let's get this thing. I'm talking about how a day is like what used to be a month and how a year is what used to be a decade. And we're going to issue 50 year mortgages, which to me are like five times. So these are like 250 year mortgages. In a time, the time for a company to actually meet the numbers that they're going to have is much shorter. And so when you're taking out debt to fuel something, you're making a bet that there won't be a better solution to the problem with inside the next year and a half. And I think that is a very dangerous thing in this. There's so many dollars that are being spent that are a bubble. Lots of this stuff. People are taking debt and some of these companies will not actually be able to build out the stuff that they add. I'm not going to say it's going to be like Chinese ghost cities, but I'm going to say there's going to be a lot of data center build outs that don't get finished that you know, they'll find a better solution that doesn't involve the transmission lines and the whole buildup. That's going to take a lot of time. So I just think that when people go through this they have to think about time. And every year the investments to me that are going to be the best are the ones that you can guarantee. Okay, I think this company is going to take their earnings from 5 to 8 this year. Not a company that has their earnings at 5 and they're going to ratchet them down to 4.8 this year, but they're going to be 10 next year. I don't think the market's going to reward people like companies like that. I think there's going to be a lot of them that are having the backlog and the constraints that you're referencing.
- [51:01]
B
Do you think this time issue was underlying what OpenAI did last week when they sort of implicitly asked for a backstop from the US Government?
- [51:13]
A
Yeah, it was taken a little bit out of context. I saw the, I saw the transcript of the words and stuff and I think she just made a really bad decision on a word. Everyone now on X and social media just jumps on anything that people say like it's gospel. The numbers are huge. There's no way around it. If I had to pick a company that was the most likely in mind, I'll do a little early Kentucky Derby AI bubble fest and just give my favorite at this point, I think OpenAI shows all the signs of, of a company that's just desperate to do something for. I don't even want to say ego, but it's a little scary to me that when you have it just his responses to questions the past history had with kind of the mutiny that was going on, the fact that Masa San is involved and he hasn't always been the best judge of when timing on things. I just get the impression that OpenAI may be the company that's biting off more than they can chew. And I understand they're doing what any company would do in their position, which is they have 800 million users they've dominated and you don't want to lose those users. So you have to find a way to monetize them. And to do that, he needs more compute and more power. He needs to be able to release more applications to get the revenues. But the reality is, I think the issues that are popping up with OpenAI just show how big of a risk they're taking and how on edge the company leaders are.
- [52:54]
B
Yeah, his comments on the BG Squared podcast were a bit perplexed. A lot of hubris in the response.
- [53:02]
A
To Brad There I was at a dinner last week in Boston with just say, a lot of portfolio managers that manage a lot of money and we spend a decent amount of time on Sam Altman's response to Brad Gerstner's question. And these guys are trained in reading management and it was not a good look for anyone at the table in terms of the way he responded and then how he left later. And I like you listen to the whole podcast, but we had a long conversation on it. So I think this, this feeling of, you know, these kids are running a and I say kids because Sam Walton's not an old guy, $1.4 trillion of, of needs to spend. That's a big number to give to someone who hasn't proven to run a business before. So I just think there'll be plenty of bad investments with inside there. But that doesn't change the, the fact that AI itself is not a bubble and the benefits that are going to come more like on the productivity side, I just think people should shift their attention more to productivity side and probably less to this speculative build outside.
- [54:16]
B
Who do you think is best positioned?
- [54:20]
A
I mean on the LLM side, I think, I think Google. I like, I like the way Demis Hassabis talks. I like the Google products on this. I, I think Gemini is the best model. So I, I think they have the resources. They're the only one that has a competitor to Nvidia's GPUs, so the only one that doesn't depend on the GPUs. So if I had to guess, I, I would, I would, I would say Google, I think Tesla's best set up for the next stage in the physical side. And I actually think that that's probably the most valuable that exists. If I had to say one thing, the reason in video is in the position. It is. And this is for everyone who just wants to hear my take on Tesla. Nvidia put themselves in a, in a position where they have the scale capable of delivering the GPUs and they have a moat around their business. If anyone wants to kind of measure a true AI situation, if Nvidia started to go down, that would say to me that we have a problem in AI investments because the stock is way too cheap for the moat that they have on their business. It's just way too cheap for the total revenues that are coming in the next five years or the total CapEx spend and what percent they get of that and how it's almost unthinkable for anyone else to use them for any of their data center buildouts because they've been doing it for so long. They can do the size their clusters have worked in, the size that they are. It just, it doesn't make sense. But Tesla and Elon Musk, he's had this vision for, I mean, he laid this out 20 years ago, he's built the scale. I mean, I always joke with people, I'm like, have you ever seen the Gigafactory in Nevada and just like looked at the size and realized how many football fields you could be playing in that thing? And it's, you know, one of the Fifth, I don't know, top five largest buildings on the planet. That's like China style stuff. And he built this out a long time ago to make sure that he'd have the batteries, all of the stuff that he has in Texas that he's built out. He just has a huge advantage on the autonomy side going forward that I don't think anybody can compete with. And so if you believe that TAM on Robotaxis and you believe the TAM on, on Humanoids, that's coming soon, I don't see anyone that can compete with them. So Google on the LLM side for me. But I would say Tesla is the biggest upside of any company by far.
- [56:55]
B
I'm sure pretty confident that you saw the trillion dollar package and then his response to I forget which representative it was saying this should never exist. But I think it was actually extremely important that he gave a response. He did, but people look at the trillion dollar sort of bonus package if they hit certain KPIs and say that's crazy. But building on what we were saying earlier, if they can actually go out and successfully execute on Robotaxi and Optimus, the TAM for those things is going to be enormous. And it may sound crazy to people, but a trillion dollar options package is actually justified if you can execute on it again.
- [57:40]
A
The shareholders voted. Those are his bosses. They could have kicked him out. I mean, Sam Altman was close to that situation and then seems like Microsoft forced him to be back. I don't like the democracy we live in. It's the country we live in. I mean, people got to have their vote, they got to have their say. And in the end he got over 70% of the votes. It's their company. People don't have to own the stock. And trust me, the people that don't agree with the trillion dollar package, they don't own the stock. So there's a lot of people I can, I've been shocked. In fact, I say this all the time. I'll say it again, Tesla is very close in market cap to bitcoin. Bitcoin and Tesla are like two siblings. The investment world on the traditional finance world does not believe in bitcoin. They do not believe in Tesla. It's a fascinating combination, but those two things to me work hand in hand together. I believe they are the two best assets to own next year and they are ones that have the same thing. There's no story for bitcoin to convince people in the traditional finance world that it will ever work. And in the same way people can't believe Tesla.
- [58:57]
B
Well, Bitcoin I can sort of see more of. It's like, okay, it's as foreign digital currency. Does one thing, digital gold, sort of boring. Governments will never let it happen. And it's hard to see the wins that bitcoin has had unless you're holding it and using it and watching him build out. But I feel like Tesla is way more tangible. And not only Tesla, but you look at Xai X SpaceX, everything he's been able to execute on over the last two decades, and it's like, how could you not acknowledge that there is something here?
- [59:31]
A
Yeah, I guess I agree. But there's two things that you're leaving at. One is the valuation between the two is the same to them. Meaning when you throw valuation, and it's like, if Tesla was trading at $5 a share, then people would be interested. They don't like it because of the valuation size. The second thing is, and this is, you know, I mean, this is kind of a hard thing for people to hear, but in the traditional finance world, if you've been successful enough to have an opinion that people care about on Tesla, you probably went to a really good school and you probably have a pretty big ego. And at some point you said Tesla's a scam or Elon Musk is a scam. So you're also asking people to change their mind. And I'm just telling you, from working around people like that for my entire career, it's not their specialty to admit they're wrong.
- [60:24]
B
Yeah. Well, as it pertains to that specific politician, we'll end on this topic because I think it's important to bring up. It seems clear to me. And I've written, I've wrote a newsletter about it last week. The United States, the political atmosphere as such, everybody's being driven to the polar ends. You have, obviously, with Mamdani, the Democratic socialists in New York. And then you have people who don't think Trump is being as right wing enough and are looking for a strong man to fix the economic issues. When I look forward, I think of impediments to this sort of advancement in technology driven by AI, the advancement of bitcoin. The one thing outside of energy that I can think stopping is just social incohesion in the United States. So this hits a boiling point. And that's why I mentioned I was happy that Elon stuck up for himself in that thread by, quote, tweeting that politician, because I think he put it out in simple terms like, hey, we're supposed to live in a capitalist democratic society. If you want good things, the people that bring you the good things need to be rewarded. And that message is being completely lost these days as people, due to the effects of the K shaped economy, are looking for solutions that can help alleviate their financial pain. Listen.
- [61:56]
A
I've talked a lot about this in other podcasts, but I'll bring it up here. If people haven't spent time with Joseph Schumpeter going to LLMs and just ask for a two page write up on the summary of his views on creative destruction. He called this entire thing and he said eventually capitalism will consume itself and socialism will rise and there will be unrest. And the only thing he didn't write about is the creative destruction eventually getting to the democratization of intelligence which will lower all prices to zero. And that's kind of the end game for me, is that that's why when I talk about abundance, it's something I believe in. And part of it's from going to Singularity University as often as I did when it mattered the most, when I was trying to answer a question of how are we going to continue to grow if population is not going to grow? And if we're coming out of the great financial crisis with all this debt, there's no way the pensions, the liabilities that we have, Social Security, these are problems that are honestly unfixable. That's why there's always kind of a debt scare that comes in. So I had to come to a solution of what is the end game, because I know one thing. The human race continues on. We're not going to have if there's less people in poverty than ever before, and if life extension is going to start to accelerate, how does that solve itself? And that was what brought me to Bitcoin at the end, is a belief that as things become free, as we get to the point that the cost of all goods and making all things in 15 years, 20 years, not in five years, but down the road, that will normalize things and politics and things like that. Governments don't fix problems. Their job's to keep from the chaos from ensuing. They don't fix anything. They never have. At any time I've heard a leader could come to change things. I needed some guiding principle that made me believe that it was good to be optimistic. I mean, I have a hat on that says half full. I'm a really optimistic person who's happy, who loves life. Like I said, I love nature, I love Maine, I love skiing, I love all of that. I needed an end game that actually made me feel that it wouldn't end with a nuclear bomb in a war or with people killing themselves out in the street. And I do believe that that's going to come from artificial intelligence, that that's going to come from super intelligence. So I've kind of left it, Marty, where I always say bitcoin is the purest AI, investment or trade. People always respond the same way. I don't get it. I don't see the connection. And I go, I've been told that my entire life. I sometimes maybe overthink things. I get a little too deep on some things. But the reality is, if you really think about what bitcoin represents, if you think about what the Internet represents, if you think about what mobile represents, they all represent a growth and decentralization and democratization, not with inside the wealthy place, but the globe. And that's why I wrote the paper that I did this week about living in Brazil and seeing true poverty and living with it and going to weddings with people that were there in the favelas and actually seeing it. It's a very different situation outside of here. And I think the democratization of intelligence is going to lead to a better world for everybody. It's just going to take some time. And during that time, people better learn AI and learn how to embrace it and use it, because that's the key to getting happy, is to make sure that you have some optimistic side to.
- [65:39]
B
Well, let's end it on an optimistic note. Jordy, thank you for your time and thank you for doing what you do. And like I said, it's been part of my weekly routine. The Sunday morning before church, watching the videos, if they're out before 10:30 mass and going and reflecting on them. So thank you.
- [65:57]
A
I appreciate that, Marty. I like to be before God. So it was good. You get to go spend your time in church, I get to get you all teed up, get you in a happy mood, and then you can go off and get some enlightenment as opposed to just some market information.
- [66:14]
B
Well, thank you and hope you enjoy your day. We'll do this again at some point.
- [66:18]
A
I look forward to it. Thanks.
- [66:19]
B
All right. Peace and love, freaks. Okay, thank you for listening to this episode of tftc. If you made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there also, wherever you're listening, whether that's YouTube, Apple, Spotify. Make sure you like and subscribe to the show, and if you can leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad free, make sure you download the Fountain podcasting app. You can go to Fountain FM to find that $5 a month get you every episode a day early ad free helps. The show gives you incredible value, so please consider subscribing via Fountain as well. Thank you for your time and until next time.