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- [00:07]
Mel
You've had a dynamic where money's become freer than free.
- [00:11]
Host
If you talk about a Fed just.
- [00:12]
Mel
Gone nuts, all the central banks going nuts. So it's all acting like safe haven.
- [00:19]
Host
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.
- [00:29]
Mel
I mean, that's part of the bull case for bitcoin.
- [00:32]
Host
If you're not paying attention, you probably should be. Probably should be. Probably should be. Addison, we meet again for a look forward in the year that is 2026. Great to have you back, sir.
- [00:46]
Mel
Great to be back. I've been really looking forward to this one.
- [00:50]
Host
I have as well, especially after the weekend. We wanted to record this before Christmas or between Christmas and New Year's. But you were on a trip and sometimes destiny just works out in certain ways.
- [01:04]
Sponsor/Ad Reader
We have a lot more to talk.
- [01:06]
Host
About today, I would, I would imagine than we did a week ago or two weeks ago even. And that is because of the events happening in Venezuela over the weekend and into this week. The Trump administration going in four hour mission, taking out Maduro and basically waving the flag. We there is a new Monroe Doctrine. We're going to own the Western hemisphere. And I think my favorite meme that's coming out of this is that what is international or rules based order? What is international law? Does it even exist?
- [01:43]
Mel
Exactly. I mean, that's absolutely right. I think the rules based order was essentially a scam put in place by the United States Post World War II to give a structure to enforce what we wanted. That started to fall apart. So we're no longer enforcing it. So it basically means nothing. I think even if you go back to a lot of people talking about de dollarization right now and this just incentivizes people. My take, and I think the consensus take is like what really accelerated it was the seizing of Russian assets post the Ukrainian invasion. My take is that those Russian assets would have never been seized if the powers that be didn't recognize that this whole de dollarization thing was already in play and that the reason it didn't happen before 2022 is because there was still this sense that the dollar, the post Bretton woods system could work. I think by 2022, the powers that be realized it couldn't work. And so it's like, what the hell, let's seize the Russian assets. These countries, the BRICs, everybody, the jig is up on that train's left the station you're not going to accelerate de dollarization by this stuff. That kind of modus operandi is in effect at as high of a volume as I think the powers that be in places like China and Russia feel comfortable with because they don't want to scare or flood the market and then, you know, ruin their own asset value. So I think they're already moving as quickly as possible. So I don't think this speeds it up. I don't think the Russia seizure speeded it up. I think it was in place and the reason we seized the Russia assets was because it was the dollarization play that was already done and, and the rules based order is done. All of this is done. We're in a multipolar world now with three great powers and the decisions that need to be made need to be made based on national security, national interest, economic stability. I mean, these are the driving forces and that is to me what led to this weekend's activities.
- [04:00]
Host
Yeah, and it was really interesting to see what happened in Venezuela over the weekend, particularly after the National Security Strategy was released last month. And the NSS is something that I never really paid attention to, but enough people were making noise about it that I read the whole thing and it made a lot of sense to me. Let's get away from these forever wars in faraway lands across the oceans. Let's focus on the Western hemisphere and create economic partnerships with people throughout Central and South America and then economic partnerships with people abroad where it makes sense. But we really want to bring it home. And I was actually at an event in Dallas last month with a high ranking ex military official who was saying he was like hand waving at it, like, don't worry, nobody takes these national security strategies seriously or they're never really implemented in the way in which they're sort of written. But here we go. Less than a month or two months after they released their National Security strategy and it seems like they're trying to implement it. A new Monroe Doctrine, the Don Row Doctrine as Donald Trump was calling earlier this week.
- [05:08]
Mel
Now I, I think even like taking a step back and looking at it broader. It actually goes back to exactly what we talked about a year ago when we were sitting here post election, prior inauguration and I was saying like raise cash, buy puts, because I think the market's underestimating how bold and kind of unconventional Trump will be. And he's going to do some things. I called it my sour cream and salsa philosophy that he had some negative things that would cool the economy that he wanted to do. And also that he was going to do things that people that thought Trump 2.0 was going to be more or less a revamp of Trump 1.0 were not reading the Room that this, this guy and, and these are not, like, political things. Like, I'm, I'm not a big fan of Trump. I'm not a hater of Trump. I just want to read the room and try to see where markets and things are going. And I think what people misread about him was, like, this guy really sees in his head that he is a historical figure. I mean, I think Gingrich, Newt Gingrich, said something about him being the third greatest president from a historical perspective after Washington and Lincoln and Trump didn't like that. That's the type of ego we are dealing with. And if you think that somebody with that type of an ego is not willing to push things to places that people don't expect, you're not reading the Room. I think this guy is even going to get bolder. Last year I said, look, he's going to do some bold things that are going to freak people out. And there's going to be market turmoil in the first half, but it's going to be a buying opportunity. I actually think the. Actually the exact opposite is at play right now. I think we had three months of basically nothing in equity markets. You can go back to October. We're basically where we were on the S and P. Bitcoin's been, you know, disastrous in the last three months. I messed up that call because I was totally bullish. When it got around 98, I was like, we're going to bounce from here. But I think what's happened is people have now pulled back, and what they're doing is they were a little afraid because of what happened in the last three months, and they're not seeing what's going to happen in the next six months. And that while last year there were people, including, like, Tom Lee, who were, like, very bullish on 2025. Great first half, but watch out for the second half. I was saying, actually watch out for the first half. We're going to have a great second half. And I think the opposite is true this year, where a lot of people are like, 2026 is going to be a great year, but be careful in the first half. But then in the second half, things are going to do better. I'm actually worried about the second half as we get closer to the midterms. I think this first half, and I think everything that's been happening in just the first two trading days of the year are supporting this is that this first and second quarter of this year are going to be incredible. I think great crypto is going to be amazing. I think bitcoin is going to be outperformed gold this year. I mean, we're getting ahead of ourselves with some of these predictions, but I think there's a foundational basis for it that is rooted in what is happening right now, globally, geopolitically. And it has to do with the fact that people are starting to realize the rules of the game are being slightly rewritten. And while there's high risk involved in this, if it kind of threads the needle, and I always talked about there's this needle to thread. Things can work out in a pretty positive way. And so far I think they are. And I think there's a lot of people that are just doom and gloomers out there. I'm always the ex doom and gloomer. I'm like, be optimistic at the end of our last call, even given everything that happened. I looked at the transcript yesterday. I'm like, what did I say at the end of the last call? I'm like, well, we'll probably be sitting here and three months and the S and P will be somewhere around 68, 6900 and, you know, up, you know, 4 or 5% from where it was when we did our last call. And there'll be volatility. And sure enough, here we are, you know, exactly where I said we were. So I think this is still going to go on and we're climbing this wall of worry. People don't want to believe it. They don't want to think this is going to work. They think we're heading for a disaster. They think a financial crash is coming. And I think once those people start to capitulate and say, oh, no, this is all figured out, that is going to be the big sell time. But I don't think we're there yet. I don't think we're even close.
- [09:37]
Host
Well, you mentioned a few things there. Threading the needle. He's going to get bolder. And I think building on what you just said, a lot of our ongoing conversation over the last couple years has been, okay, if he's going to thread the needle, let's think of the positives, what can happen. Let's bring it back to Venezuela and just use this example of what happened over the weekend, what's continuing to unfold now, and basically paint the picture of how this could be extremely positive. For the US from an economic perspective, from a geopolitical strength perspective, and what it means moving forward for the US Economy in the Western Hemisphere.
- [10:13]
Mel
I mean, I think it makes a lot of sense. I think it's very smart. I think it's an asymmetrical risk that was worth taking, and I think it still has yet to play out. So when you take an asymmetrical risk, it's like taking a trade. You're, like, buying futures and you're like, oh, I think we could go down a percent. I'll put my stop there. But I think we're ready to break out for a 5% move. And you're like, okay, I got a 5 to 1x. I think that's the type of trade this was for Trump was like, look, and I know there's some conspiracies out there, that this was actually all prearranged with Maduro, and he wanted a escape route that would allow him to kind of deny giving into the US and they're going to come up with a bunch of, you know, legalities that allow him to get out of there and. Or the case gets. I. I don't know. I'm not even getting into all of those. But what I do think is that the move to secure the Venezuelan resources was a great move. I don't think that this has anything to do with international law or fentanyl. I think, obviously, those are smokescreens. I think this is the realization that Venezuela has probably the greatest concentration of natural resources in our hemisphere and perhaps one of the greatest on the entire planet, which. And that Russia and China were worming their way in to be in control of those resources and that allowing that to happen would be akin to allowing Russia to dominate critical minerals. That it's like, shame on me once, you know, like, fool me once, shame on you. Fool me twice, shame on me. And I think we watch China go around the world and dominate critical minerals and then put us over a barrel when they needed to. And we said, they're getting ready to go into Venezuela and get their hands on that. And in, you know, these shale reserves in the Permian, like, you can look at them like they just, they're. They're going down the ROI you need. Like, if there's a Permian Basin hole opened up and you put all that money in, like, the marginal cost to pump it out is like 10, $15 a barrel. So nobody's going to shut down and open, you know, fracking well right now. But at the price of oil there's not much incentive to open up a bunch of new fracking opportunities because you need like $60 a barrel to break even. So, and, and that's been going down. And you know, there was a great piece that got like 3 1/2 million views from Sky News that basically just spelled out the different types of crude, the light, the medium, the heavy, and talked about how, you know, these fracking wells produce light crude. Light crude comes out of the ground almost clear, almost like a smoothie in some cases. And they have pictures on it on this if you want to see it. But basically it's not the heavy crude. And a lot of people, they're talking about two things. Number one, they're saying Venezuela doesn't have the reserves they claim to have. So they're saying those were jacked up post gfc. I saw an analyst on Bloomberg this morning say Venezuela doesn't really have the reserves they claim to have. They, they claim 300 billion barrels. It's more like a hunt. Only 100 billion. Like 100 billion is nothing. And it's like the US known reserves are like 45 billion. Okay? So even if you go and you cut their estimates by, you know, 2/3, you're still at twice all of the US reserves. Even if it's only 100 billion, then they say it's, well, it's a heavy crude. Well, heavy crude is what used to come from places like California when we actually drilled there. And most of our refineries in the US Are set up to manufacture heavy crude. So even though we produce more oil every year than we use, we have a huge amount of exports of oil and a huge amount of imports. And what do we do? We export the light crude and we import the heavy crude. There's only three countries in the world with large reserves of heavy crude. Canada, Russia, and Venezuela. We're kind of tapping out our exports of Canadian heavy crude. We're obviously not importing heavy crude from Russia. So there's only one other source of heavy crude out there, and it's Venezuela, and that's what we need for our refineries. And you can't just, you know, flip a switch in a refinery and say, okay, so if we need heavy crude, that's what we need is heavy crude, the exact type of oil that's there. They've got 100 billion barrels at the lowest estimate I've ever heard. And at the highest, it's over 300 billion barrels, which is six plus times the U.S. reserves. They've got massive amounts of Gold, they've got critical minerals that we also need. And so I think what the Trump administration did was they said, look, we've got the perfect smokescreen, the fentanyl. The Maduro's already indicted enough of this stuff of going to the Middle East. Venezuela has more reserves than Iran and Iraq combined. We're going to secure these reserves here. This is going to be a total resource grab. Not make apologies for it. I don't think Trump made apologies for it. I think then on Sunday when people like Rubio went on the shows, they tried to make apologies for it. I think Trump was pretty clear on Saturday in that press conference. Like, this is basically about the oil. Yeah.
- [15:56]
Host
And I think people, I don't even know if they forget, I don't even think they even understand from first principles. Before Chavez took over 26 years ago, I mean, what was Exxon, Chevron, BP essentially built the oil and gas infrastructure within Venezuela. And there was this beautiful symbiotic relationship between Western O and G companies and country of Venezuela. And as you mentioned, we have these refineries in the Gulf of America that can refine this heavy crude. And I think it's a win, win, win for everybody around, not only Americans, but Venezuelans as well. They're able to get their dictator out of office. And again, like you said, it's early days. Who knows how this is going to play out. But I think we should try to be optimistic. Like, hopefully there can be an incredibly positive outcome from this in terms of Venezuelans getting their freedom back and reinvigorating that market around the oil and gas industry specifically. And then, so that's the economic side. Then you have the geopolitical side where you basically show up, show up in force and say, hey, China, Russia, this is our part of the world. We're, we're taking control. We're going to own this relationship with Venezuela. And so you, you curb that, you lock down those sea lanes and then the economics plays into the geopolitical as well. Because if you're able to refine and use that crude and keep oil prices relatively low, that's a huge bargaining chip with Russia on the geopolitical stage.
- [17:29]
Mel
Yeah, exactly. And I think, I mean, for me, there's like a couple things that I don't like. Like, I don't like trying to nitpick international law and these things. I think, as I mentioned in the beginning, we're kind of beyond that. But I also think, yes, there are some positive side effects of this for the Venezuelan people and different things. But at the end of the day, I think even if there weren't, it still is a good idea because I think you have to kind of look at the world differently than say 2005, when the US was like a dominant unipolar, like there's now kind of teams, right? And it's kind of like, I think this is a great win for like our team, like the kind of Western European, Japan, certain countries, South America, like, and I think it was important enough that it deserved the risk. And I think that this amount of resources and this oil, if we can secure it, and I think there's still a lot of ifs in there and, and I think it's still to be determined whether or not this big asymmetrical bet is going to pay off. I don't like rah rah stuff. I don't like, oh, the US military is invincible and we can do whatever we want. There are limits to military power. Even though I think we have the greatest military, there are limits. So we've seen that in Iraq and Afghanistan. So this is not a fait to complete deal that this is going to work out. Well, it's still extremely early, but I think the broad strategic viewpoint is more of like, look, we have adversaries around the world that are clearly grabbing resources. China, the Belt and Road Initiative, what they're doing in Africa, what they've been attempting to do in South America. We also still have an economy that is very dependent on petro products. I think in the long run it makes sense to get away from those, not necessarily for environmental reasons, but for independence reasons. It would be great if we could power everything in America from nuclear and solar and wind, not necessarily to save the planet, although that could be a great side benefit. But just because we don't want to keep having to go into the Middle east or needing to do these things in Venezuela. Like ideally, in an ideal world this would be. It'd be like whatever people want to do in South America, let them do. But unfortunately we don't live in an ideal world. We live in the real world. And this real world is still very dependent upon energy. And the US shale boom is not likely to continue, it's not likely to continue to grow. And in fact it might even begin to decline. And we had a kind of regular oil boom with the Rockefeller era and everything, and we became dominant in it. And then that declined and we wound up in the 1970s, we wound up in stagflation, we wound up with gas lines, we wound up in a Big heap of trouble, basically, in a horrible decade. And economically. And I think what people are looking at in the deep state, and I think Trump might even be kind of more like about the fentanyl and the drugs things than people realize. But I think there's also people in the CIA and the deep state and the NSA that are saying, hey, these resources are important. We need to, if not, you know, get control of them, when to at least stop them falling into the total control of China and Russia, which is what was happening. I mean, that is basically what's been going on. I didn't mention this before, but, like, you know, my wife's family is originally from Colombia, but a number of her sisters wound up moving to Venezuela in the 60s. And my wife has cousins and aunts and people that live in Caracas. My wife's aunt was woken up at 2am by the bombing. I mean, they're there. They know what's going on. When my wife heard the news, I mean, she came downstairs like it was Christmas morning. I mean, Venezuelans and people in that region are very, very happy about this. And that's a great side effect. But I don't even think you need to justify it by that. I think you can justify this by what happens if the entire kind of global economic system begins to collapse. And I think you can justify expansion of the Federal Reserve balance sheet to ridiculous amounts to absorb Treasuries. I think you can justify actions like this because we've seen what happens when the world financial system begins to collapse. The biggest one happened in recent memory in the 1930s, and it led to the rise of Hitler, it led to World War II. And I think people that think, oh, well, that's being crazy, and you're making a bunch of leaps here. And I honestly don't. I think in a way, going into Venezuela might wind up saving millions of lives in Africa. And it's like, well, how does that happen? Because if we can keep the economic and the world order going in a way that actually gets gas to pumps and banks don't collapse and the system doesn't collapse, you really drastically lower the chances of a World War 3, of regional conflicts in places like Africa, because it's always the poorest people who are hit hardest, then they start starving. Once people start starving, they're willing. So you want to keep this whole system of like 8 billion people somehow getting food, energy, everything they need to survive. You really want to keep this system going, because if, if it breaks down, it's going to be a big disaster. And I'm not talking about like you know, 5,000 people killed. I'm talking about millions. You know, I'm talking about World War II. I'm talking about like billions of people on the line if the entire world order just collapses into absolute chaos.
- [23:24]
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- [23:27]
Host
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- [24:19]
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- [24:58]
Host
No, especially if we are going to need some monetary stimulus and you're able to lock down more secure and abundant oil. Supplies like that could help in that environment where it's like, hey, we're able to produce oil cheaply, we're keeping the price of oil down, which is a base input of the economy to a great extent. And so you can sort of hedge that, that inflation risk of the monetary inflation risk. And then another thing I want to add on too. I'm, I'm not a big rah rah got into bitcoins. I'm very anti war. But I think another thing, we can maybe end it on this, the Venezuela topic. But like, another thing that really pleased me was like, setting the precedent, and I guess this was the second precedent after Iran in the summer of like, hey, we don't need to boots on the ground, be in these places for weeks, years, decades even. We can get in and out in four hours and accomplish what we want to, which I think is an incredibly strong precedent. Say, hey, if Trump was able to do this, why do we need to going forward? If you get another presence, like, we don't need to get in a forever war if you really want to accomplish this. He was able to do it in four hours. Why can't you?
- [26:09]
Mel
Yeah, it's showing the way they're handling it now is really showing that they learned some lessons and took them to heart. I think, you know, a lot of people, including my, my wife's Ann, she's like, why is the US Kind of talking to this Delsey Rodriguez? Like, she's a total Chavista. Doesn't like her. She's the vice president who took over. And it's like, the US doesn't want to go down there, right? I mean, yes, on the one hand, we want to help the Venezuelans. We want to turn this into a free market economy and democracy, but that's not the primary goal. Rubio stated as much directly in the news shows this past Sunday. The primary goal is, I think, US national energy security, US national interests side goals are the narco trafficking stuff. And then tertiary is like, let's help the Venezuelan people. So I think we want to do that. That's the ultimate goal, is like, let's try to get there. But ultimately at this point, it's like, look, if she's willing to keep the military and the state security apparatus in line, but also play ball with us, okay, you know, and I think what we're doing is we're giving her some time to decide what she wants to do. I think if she doesn't play ball, that the US Is committed. And I think Donald Trump also said this, if we have to put boots on the ground, we will. So they've learned the lessons, they don't want to do this, and I don't think it's a good idea to do it. But again, I like my read on this, is that this is such an important strategic move, much more important, in my opinion, than Iraq or Afghanistan, that I think the decisions has been made at the highest levels that we're willing to take this where we need to take it. And hopefully, and I think this actually is my base case, the people in Venezuela will realize that and realize its resistance is futile, to use a Star Trek term. If we say, okay, I'm going to be the new Maduro and I'm going to give the finger to the U.S. i don't think the U.S. is going to let it die. I think if they realize that, that there is a chance to once again thread this needle without having to put a bunch of Marines on the ground or do that type of operation, which, you know, is great. And I think one of the things, one of the worries I have going forward for longer term is just if that does work out, like you're starting to get some good results from the Trump administration, and you have to also guard against good results, just like you do if you're a trader, you start having a bunch of wins, you have to be careful not to start thinking, you know, everything that's going on. I did a little bit of that this year. I had such a great beginning of the year. I. I made some bigger bets than I probably should have around the third quarter. You see this in world history at, you know, where people have successes, they do what people told them is impossible. They get away with it. Hitler did this. People told them, don't go into Czechoslovakia, you're going to get killed. Don't go into Austria, you'll get killed. Don't go into Poland, you'll get killed. Don't go into France, you'll get killed. He kept doing everything that his advisors and generals told him not to do, and it kept working out great. Eventually he said, I'm going into Russia, right? Soviet Union was their allies in the beginning of World War II. And he said, I'm turning on them. He got killed. Napoleon, same type of situation. So what the Trump administration really needs to guard against is getting too cocky and thinking that, okay, things worked out pretty good in Iran so far. Things working out pretty good here in Venezuela. Let's do Cuba, let's do Mexico. Let's do, like, let's just keep going. And so I think there are risks out there. Like, I'm not like, oh, this is a done deal. Market's gonna skyrocket. Like, there are risks out there. And that's the wall worry. I think Markets are Gonna climb in 2026 is where is this all going? And where does Trump kind of draw the line on what he's able to accomplish?
- [30:04]
Host
Yeah, because on top of all this, you have this tension between domestic and external forces where there's obviously another big headline over the last two weeks, is this Medicaid fraud being laid bare not only in Minnesota, but across the country. And many people asking, why are we even paying taxes? If it's becoming abundantly clear that billions, tens of billions, potentially hundreds of billions, maybe trillions, over the course of many years is simply going to people who aren't working or contributing to the system at all. And there is a palpable sort of anger and a desire for the Trump administration to be more strong willed in terms of their domestic policy. Immigration, specifically.
- [30:50]
Mel
Yeah, I mean, we've, we've got this. I mean, we've got so many balls in the air right now. And I think that that's really what markets are trying to figure out. Like, they're looking at all these things. They're looking at how do we make sense of the job market? And we haven't even talked about AI yet, which is obviously huge and in the background of everything that's going on. So it's like, how is that affecting the job market? How is that affecting the economy? And we're seeing these huge nominal GDP numbers. I think it was like 8% last quarter. We've got almost no employment growth in GDP going through the roof, earnings going through the roof, margins going through the roof. And, and people are like, they're looking at this and they're like, this is not what we've seen before. And I, this, this goes, I think, all the way back. Like, like I said, what we talked about last year is that these are not normal times. The, we're in an era whether we recognize it or not, because maybe we're living through it, it's harder to recognize. But we're going through a very historic area. We're going to, we're going through an area that, you know, 50, 100 years from now, people will look back on and they'll be like, this was an extremely transformative time for the world, for the globe, with a lot of ramifications from technology, from geopolitics, from just everything that's going on. And so it's really kind of astounding, really, when you look at, you know, market behavior. And I, I think it's not surprising to me to see precious metals have the year that they have. I've I've long been a big precious metals bull. I've always said that's where I started. Before even I thought about bitcoin, I was a big precious metal guy. I mean, I literally have like, you know, my hundred ounce bar of silver that I bought for like 1100 bucks, which is now like 8000. You know, like, precious metals are a big part of my investment philosophy. My core position as well as is bitcoin. What's happened with bitcoin in the last quarter has been confounding to me. To me, it's like this was a great opportunity. But when I look back on it, what I think of is that what bitcoin has been responding to in the last three months is bitcoin is not a NASDAQ correlated asset. Bitcoin is not a gold correlated asset. Bitcoin is like a global liquidity correlated asset. And I think there was a pull down in liquidity in the fourth quarter. I think if you look at the September monthly Treasury statement, we actually ran a surplus for the US Government. Then we went into the government shutdown, which, you know, kept funds at bay. We have had, we were still running QT until December. And I think you had this global liquidity drain that essentially collapsed. High momentum things, you know, the quantum names, the nuclear names, and it kind of quashed crypto and bitcoin. And that's just one of three things that happened. The other thing was the October 10th liquidation in crypto, which are market makers. And then you kind of have the digestion of some of the things that were perhaps hoped for in the beginning of the year not coming to fruition. The Clarity act not getting passed. The Strategic wealth fund, where it was talked about. There was a report that was given to the White house, you know, 90 days after Trump signed the executive order. And it talked about the difficulty to create this strategic wealth fund without congressional approval and how they were going to do things through these like really shady defense investment funds. And that's what they've been doing for things like Intel. So a lot of these things that were expected, you know, kind of collapsed. We had a pull down in global liquidity. And when you look at it through that lens, it actually, bitcoin's response makes sense. Like, it, it's not like, oh, the, the four year cycle's here and then that's what happened. Or, oh, bitcoin, it's not the real deal. It, it's, it's not, you know, digital gold after all. And, and that story is done. And it's it's not even. Oh, it's, you know, people don't want to get into it because of quantum. I think there's a lot of those things out there right now about why did bitcoin not have a good fourth quarter and because it had a great third quarter. I mean it was at all time highs in October. So like why, why the last two or three months it hasn't done good. I think that's why and I think it makes sense and I think a lot of those reasons why are changing and that's why, you know, I'm very bullish on, on bitcoin and I don't think that while it's totally possible I'm wrong and it, it makes one more leg lower. I, I just see this as like the year to think about it as last year was a consolidation year and this year it's, it's going to have a excellent return.
- [36:02]
Host
I completely agree. And I was very bullish going into last year too. Obviously with the Trump administration coming in, the ETFs really catching their legs and was a bit disappointed. But I always like to zoom out. And if you zoom out, we did a, between November 21st and October of last year, we did like an 8X. It's like, okay, we can take ridiculous.
- [36:23]
Mel
I mean 23 and 24 were 100% plus years, both of them. I mean, then you have a 6% down year and people are like, oh, I'm worried about bitcoin. It's like, I mean, come on. I mean, I mean, but it's good for everybody. I mean the markets are this way too. The markets give people opportunities like they did in April. I mean you could have bought Nvidia for $89 a share. In 2022, you could have bought Meadow for $89 a share. Markets give opportunities. And the thing is, when those times are there to buy is like there's no narrative out there in the zeitgeist that reinforces buying. And all the narratives out there are negative. And so it's very hard for people to come on, especially if they work at like a Morgan Stanley or somewhere and they come on to CNBC or something. And because all the accepted narratives around bitcoin I think were very negative into the. I think frankly bitcoin wanted to rally in December, but it didn't because it was a victim of tax loss harvesting. I mean, couple of big things with that. Okay. This was an incredible year for almost all assets. So if you were looking for what can I sell? And Take a loss on. And you were somebody who maybe said, oh, I want to get in and invest in IBIT in my portfolio at, you know, 108,000. And now it's Bitcoin's at 88. You're like, let me sell my IBIT and let me harvest that loss and let me offset some of these gains. That's real money. Especially if you're a wealthy person. Like your net taxes are like 40%. Like you could have had $100,000 loss in your IBIT position and you sell it and you basically make $50,000 in tax loss harvesting. Like it was so blatant that you basically saw the calendar flip and crypto and bitcoin take off like a rocket ship because it was, there was so much selling going on at the very end of the year. And then you compound onto that the fact that because bitcoin is not a stock. So I just gave the example of somebody that owned ibit. If you actually own bitcoin, there's no wash sale rule. So I mean, if you own Nvidia and you sell it on December 15 and you buy it back on January 1, the government says, no, you didn't sell it, it was a wash sale. You didn't wait 30 days. In crypto, there's no wash sale rule. People were able to literally sell their Bitcoin on December 31st and buy it back on January 1st and claim that tax loss. Like, that's, that's a market inefficiency, that's a tax related inefficiency. That is real, that was there. And when you look at the crypto moves and we're on January 5th and you look at where a bucket of crypto is at, it's up 20, 30%. If you bought things like ADA or virtual or Arbitran or Solana or whatever. And bitcoin's up a lot too. But a lot of these cryptos are up 10, 15, some of them up 30, 40%. I think virtual protocol, which is like an AI based coin. And I never play in these things, but I was buying them at the end of the year because I'm like, this is the beta. Like, you know, these are just short term trades playing for beta. But like, and it's, it, I, I'm shocked at how well they have done. Like, it's, it's, it's ridiculous. And it, I mean, I don't even know. I mean, if I even just take a quick look, I mean virtual is like ridiculous. This is just a protocol. It's it's up a percent today. It's up year to date or the past week. Oh no, sorry, that was, I was looking at solana. Virtual's up 10.58% today. This past week, 62.9%. Okay. Virtual's protocol crypto tradable on Robinhood, whatever. 62% in five days.
- [40:29]
Host
That's insane.
- [40:30]
Mel
I mean, it's insane. I mean some of these crypto moves are ridiculous. And I'm a total bitcoin believer. I don't believe in these coins for long term trades. But I'm also a trader. I want to make money. And I'm like, where's some of the beta? And I mean people want to talk about silver or gold. This year virtual's up 60 plus percent. This is January 5th. Now is that going to continue? I don't know. I mean at some point I'm going to take some profits in that thing. But right now I'm letting this, I mean you look at solana this like 120 level on Solana, I mean you can go back five years and every time it gets around 120 it starts to bounce. These are like long term levels. And what this is going to do when you start seeing returns like 62% people that are like, oh, I was playing all the beta and silver, wait a minute, I could have been playing this. Then you start getting that momo going. Then you start getting the activity on the exchanges. This is all financial plumbing, right? Then you start saying oh, then, then the trend followers come in and then people of course, you know, you know, there's going to be a moment this year where you know, the financial advisors are going to say, you know what, I've kind of wanted to put my clients into bitcoin, but I was a little scared. But it went down to 80 something. Now it's at 98. You know, maybe now's the time to put a 2% allocation from my clients into it. Let's we can maybe even leg into it. I'll put a 1% Ali and this is going to start to build on it and build on it and build on it. And, and that's why I think, you know, what I've been saying since the beginning of last year was my next target price for Bitcoin was 150. When we hit 150, I'll reevaluate it. I think we're going to 150 in the first half of the year. We need to see what the markets in the world looks like at that point to come up with another thing. But I think on a percentage basis, you know, bitcoin is going to outperform gold this year. And that was my, you know, number one prediction for 2026 is Bitcoin over gold.
- [42:36]
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- [43:16]
Host
Been seeing a lot of YouTube comments. Marty, your skin looks so good. You're looking fit these days. How are you doing it? Well, number one, I'm going to the gym more. Trying to get my swell on. Trying to be a good example for my young sons, a fit, healthy dad. But part of that is having a good regimen, particularly staying hydrated, making sure I have the right electrolytes and salts in my body. That is why I use salt of the earth. I drink probably three of these a day with one packet of salt of the earth. I'm liking the pink lemonade right now. It's my flavor of choice.
- [43:50]
Sponsor/Ad Reader
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- [43:51]
Host
I've added this to my regimen. They have it in these packets as well. Makes it extremely convenient if you're traveling. You want to work out while you're traveling, but you don't want to be carrying a white bag of powder going through tsa. It's very, very nerve wracking at times. You have to explain, hey, it's, it's not what you think it is. It's creatine. I'm trying to get my swell on. Make sure you're staying hydrated. I have become addicted to these. It's made my life a lot better. I can supplement this for coffee in the morning and be energized right away. I can supplement. I can bring the creatine wherever I need to. Just put a couple packets in here before I head to the gym. Bring this to the gym. Drinking out of a glass bottle. Make sure I'm not injecting any microplastics into my body. Go to drinksote.com use the code TFTC and you'll get 15 off anything in the store. That's drinksote.com code TFTC. Now it feels, feels like, and I looked at, I mean I'm not a technical analysis and left side of the bell curve on bitbo. Just looking at the 5 year zoom out and looks like we made a higher low compared to last year. Just like, okay, okay, we settled at 84 on the monthly and it was 78 last year. And we've gone up and down between then, but it feels like we made a very strong base over the last three months. And then the fundamentals are only getting stronger like what we're talking about with Venezuela. This multipolar world, the rules based order going out the window and only heightens the demand for the fundamental value prop of Bitcoin as this neutral reserve asset that can't be controlled by anybody.
- [45:29]
Mel
Yeah, and I follow technicals a lot, but at the end of the day I've seen them so much that even when you get all the signs, sometimes the market just does something else. You can look at it and you study the RSIS and there's a divergence here and the moving averages are here and the trend lines are here. And it's like, you know, I think you have to overlay the technical, I think technicals are very important, but you also have to overlay it with the fundamental story. And I think, as I said, I think the fundamental story last year was coming into the year. There's all these amazing things that are going to happen. Some of them happened, some of them didn't. When some of the amazing ones didn't happen, then you layered on this basically liquidity rug pull from September fiscal surplus and the government shutdown and basically the kind of, let's say profit taking ethos that I think came into the market. You know, like a lot of people that had gotten into the markets in, in April and May saying, hey, you know, I got a great. All these things came in and then all of a sudden you see everything completely flip when the calendar flips. And a lot of people will come on and they'll say there's nothing special about a calendar. You know, on the one hand they're completely right, there's nothing special about a calendar. But on the other hand there is like, it's kind of both like There are tax things that happen, there are financial, plumbing, market inefficiencies that happen. And I think there was a lot of market inefficiencies going on at the end of 2025 that were keeping the bitcoin price suppressed. I think people didn't want to see it go higher. I think there was the tax loss selling all these things. I think a lot of those just got lifted when the calendar flipped. And that's why you're seeing a completely different reaction now. A lot of people will say, yeah, this is just rebalancing, it's the first few days, let's see what happens. And I would just say I completely agree, like, it's only been a few days. I'm not going to start saying this is a long term trend. And that's why, like I said, for some of these crypto plays, I'll probably be, you know, taking profits. If we reach some of the levels that I'm looking at, you know, virtual is around a buck right now. I think 114 or something was what I looked at on the technicals where I wanted to take profits. But basically, like, like these are, these are things that are happening. And then you look at gold. I put out a post right after Venezuela thing happened on Saturday. Like, this is very bullish. Gold, equities, bitcoin and even bonds, and they're all up today. And I think a lot of people when this first happened wouldn't have thought that. And they might have thought gold would be up, but they might not have thought equities or bonds or bitcoin would be up. And I think this is part of the long term strategic plan that Trump has in his mind around interest rates and what it has to do with. And this actually is very rooted in modern monetary theory, which is that the key, one of the key drivers of inflation is oil and energy prices. And that if you keep oil and energy prices low, you open the door for a lot of money printing low interest rates, all this stuff. And I think that even though, like, there's not going to be a bunch of Venezuela oil coming online immediately, from what I've read it might be possible to get a couple hundred, two, three, four hundred thousand barrels a day. Like, you know, fix some of the broken rigs and different things and you can get a little bit. But Venezuela used to produce 4 million barrels a day. Right now they're at under 500,000. To get them back to 4 million, it's going to take years, but you can get a little bit of supply on the market immediately. And then you put that 4 million coming online overhang over the market. And what you begin to do is you begin to control the energy price. And if you control the energy price, you kind of can control inflation. And if you can control inflation, then you open the door for all these other things that I think are going to be necessary, including massive expansion of the Federal Reserve's balance sheet. I think these $40 billion T bill purchases are just the beginning. I think the whole idea of foreign nations buying Treasuries and that's where they go, that's done. And that basically the government is coming up with a plan to allow banks to store Treasuries, to allow the Federal Reserve to expand the balance sheet. And really, the Federal Reserve balance sheet is extremely, extremely low in regards to their holdings of Treasuries. Historically, if you look at it as percentage of outstanding US Treasuries. So if you look at it like, oh, how many Treasuries does the Fed hold? Okay, well, they were at nine, then they went down to like seven, and now they're increasing again. Well, like seven trillion out of a $38 trillion treasury market, that percentage is way low, way low. They could have 10, 12 trillion on their balance sheet just to get to a historical norm of percentage of Treasuries outstanding that they hold. So I think if, then the consensus opinion is if you do that, that's money printing, it's massive inflation disaster. The thought process in the Trump administration is, no, it's not going to be because of AI, deflationary forces, oil, all of this. And then if you look at some of the pundits that are saying, well, Bitcoin is down because it's the greatest smoke detector for liquidity and the liquidity era is over, and therefore, you know, you need to get out of it. What I'm saying is the liquidity area is just beginning and that this, this expansion, this isn't going to happen in one month or two months. Definitely not going to happen under Powell. But over time, the next one, two, three years, we're going to see liquidity expand massively. And that's what's going to be amazing for gold, amazing for Bitcoin, it's going to be good for equities, too.
- [51:30]
Host
Well, building on this, I think another sort of needle to thread here is what is the average American consumer citizen, how are they handling this? As asset prices are screaming and they're not, most aren't participating in it. And what if price inflation does manifest And a big topic of last year and one that you were pretty vocal about was tariffs. And so I think doing a retrospective on Trump's tariff plan, has it been successful? It seems like it has been. It has been massively successful. Are they going to lean into it more and then what does that do to the revenue side of the fiscal side of the equation and the levers they can pull with income tax specifically now?
- [52:15]
Mel
Well, I do, I do think probably in the first quarter, that's probably the biggest known risk out there is that the Supreme Court comes out and in some way curtails the tariff policy, which introduces uncertainty. I do think that's holding people back. That's part of this wall and wall of worry is there's probably a big group of people, institutional size type buyers that want to get more involved in this market, but they're holding back because of that ruling. And I think what they're hoping for is that that ruling comes out, it curtails the tariff policies, causes a sell off. I don't think it's going to be a 20% sell off like we had in the first quarter of, or actually it was the second quarter of last year, but I don't think that's going to happen. But could it be a 5 or 10% sell off, which is basically what we had in November, we had a 5 to 10 sell off, especially on the Nasdaq, I think it went down almost 8% from the highs. So, and Nasdaq's still not at new highs. So I think people, what people are hoping for is we're going to get a tariff surprise from the Supreme Court. Not a surprise because actually most. But see, that's the thing. Most people are expecting it like. So is it really going to be a surprise if the Supreme Court comes out? I don't know. I think it could be almost like a two, three day thing where like the Supreme Court comes out, knocks down tariffs, futures drop 3%, they drop another 3% the next day, they drop another 3% the third day, and we're down 9% highs to lows. And on that third day, it just, you know, hits a bottom like it's a total hammer wick and goes down somewhere and starts going up. And people are like, whoa, this wasn't really something to flip out about. Like, you know, they're going to figure ways to put on tariffs and in the meantime, it's going to actually alleviate some of the uncertainty because now Trump can't do what he did last year, which is just throw out 50% tariffs on random. It could actually be a good thing for markets. So I think a lot of these things that people are worried about, I think they're real things to be worried about that could really cause some issues. But I think a lot of this is noise when you look at it through the perspective of a year. If you're a short term trader and you're like, oh, I'm going to buy a bunch of QQQ call options because I think earnings are going to be good and the earnings do do well. But then a week before the big NASDAQ earning comes out, the Supreme Court comes out and rips the Trump tariffs and the market, you know, goes down 8%. That whole play is not going to work. So I think there's a lot of risks that people want to take right now. They're not taking it because of that overhang. The Venezuelan thing was an overhang. They knew that we had this armada out there in the Caribbean that seems to be lessening. I think that's a lot of the reason why you're seeing a lift today. The other big overhang and it's, I think bigger than Venezuela is what the Supreme Court says. My gut's telling me that what they're going to say is they're going to try to walk a fine line and they're going to curtail his powers a little bit, but they're going to, within their opinions, give him an opening to continue to use tariffs in almost a unilateral way. And that people will recognize, okay, he's going to have to do things maybe a different way, but he's going to be able to do it. And you know, it could be, like I said, a two, three day hiccup that people get freaked out about. And then, you know, the fundamentals get, are the drivers. And the fundamentals are strong gdp, earnings going up, productivity increasing, margins increasing. That's what's driving these equity prices. And I think the liquidity is going to come in and that's going to continue to drive gold and the bitcoin prices.
- [56:02]
Host
Do you think there's an overhang with the fiscal spending again, particularly with this fraud being laid bare? I mean, there's some people throwing out stats that if you were to get rid of 50% of the fraud, you could eliminate income taxes for people making under $200,000. That, that seems like it could be.
- [56:18]
Mel
Much, I think would be very stimulative. Right. Because what, what, what you would do then if you got rid of income taxes for people under 200,000 is those are the people that spend the money that they have. And so, you know, like, I, I just struggle to find a way that this whole card game works out without expansion. Right? I mean, I mean, this is essentially the primary basis of Bitcoin, right? It's like the whole world is set up to expand the money supply, to expand it through inflation, because the whole economic system is built upon this. And therefore an asset that has a fixed cap, that is what it is, can't be printed, has real value that will, over time increase. And so I think if you're betting that, like we're going to ourselves into a deflationary cycle, you're wrong. And I think if we get massive deflationary forces, which some people are predicting, that the response from the federal government and the Federal Reserve will be to work their damnedest to contradict those deflationary forces, which are essentially money printing, asset purchases, all of that. And so, look, I think it's going to be another year of volatility, a lot of volatility, probably more even than last year. But I think at the end it's, it's going to be a good year. Unless. Unless. And this is why in my 2026 predictions, I didn't give a full year s P target. I said my target is we're going to hit 7, 700 sometime in the first half of the year. That first half is going to be really good. I want to see where we're at with that. And I'm also a little concerned about, like I said, the midterm elections. I think what's going to happen right after that is presidential candidates coming out. And the market could look at some of these people that might start running on rolling back deregulation, increasing taxes, more of a socialist agenda. And I think the market, if it anticipates things six to nine months in advance, by the time you get to July or August, you're going to, in six to nine months from there, you're going to have a slew of Democrats out there talking about, you know, rolling back everything that Trump has tried to do these first two years. And so I think the general thought process is like, there's a lot of people being held back right now because they're worried about the Supreme Court ruling. But the Republican administration is going to really try to juice things ahead of the midterms. So the economy is on complete gangbusters by November. I think the economy will be on complete gangbusters by November. But the market itself is going to start anticipating that, okay, the midterms are going to be over. We've got these Democratic politicians out here talking about socialist ideas. Maybe we want to rein in the risk a little bit. And so therefore you see a second half substantial pullback, not just a 5 or 10, but more of a 10 to 15 or even a 20% pullback in the third or fourth quarters.
- [59:34]
Host
So is that incumbent upon Democrats taking ground in the House and the Senate? What if.
- [59:42]
Mel
I think if that happens, it's going to probably push the rally even higher. I think if things work out really well and even if they don't necessarily keep the House and the Senate, but let's just say the Republicans lose the House, but they hang on to the Senate somehow and it seems like there's a good chance that a lot of these policies are doing so well that the far left wing of the Democratic Party becomes marginalized, that maybe the Mandami election and inauguration was like a high watermark for far left policies and that the bulk of the American people are seeing this and the prediction markets start saying most likely president next year in 2029 is JD Vance and that these types of policies are going to continue, then I think you can get things rip roaring again and again. This is kind of why I'm kind of hesitant to give a full year prediction. Because I think number one, it doesn't really do any good to give a 12 month prediction if, you know, right now we're looking at what's going to happen in the next six months and then we can reevaluate it when we get there. But I think that seeing how these things shape up, does the, this whole Venezuela thing collapse on itself and turn into a big kerfuffle? That is horrible. And the economy doesn't do what I think it's going to do and the Republicans get, are going to get killed in November and it becomes clear that it's almost a guarantee that we're going to have a Democratic president in 2029 and market starts getting worried, well then I might start getting worried. Right. I'm not a permeable, I'm not someone that's like there's no way that things can go down. I think they definitely can. I think if they do and they're not going to stay down long. But yeah. Could there be a 30, 40% sell off because of stuff? Absolutely. But right now I just don't see that in any sort of base case that I'm looking at.
- [61:45]
Host
Yeah, let's lean into AI too. I mean We've mentioned it a couple of times, but I, I'm sure you've been using it. We've been leaning into it. I, I've been telling people this behind the scenes, actually. I said it on air on Rabbit Hole recap last week too, with Matt O'.
- [62:01]
Mel
Dell.
- [62:02]
Host
Like, I like Claude's Anthropics, Claude Opus 4.5 and Claude Code. It feels like we're getting close to AGI. Like the stuff that we can build with this, the stuff that we're building with this @TFTC is insane. It's making us extremely productive, allowing us to do much more with very little capex for, for lack of a better term, very little overhead investment in it. And it seems like this could be a massive boon, particularly for people of high agency who are actually willing to play with this stuff and experiment.
- [62:35]
Mel
Yeah, no, I, I, I, I, I don't know. I don't think it's all hype. I mean, I think it's real and I think actually there's a lot more already done. It's just a matter of it being absorbed in society. A lot of people say the bottlenecks energy. No, the bottlenecks memory. No, the bottlenecks compute. I think the bottleneck is human nature right now that there's already so much potential out there with AI. But when you look at like large organizations, like it, it, you know, let's just imagine like your job. You work in, you know, FP and a, like financial processes, you know, and you're, you do a monthly report, you know, closing the books and everything. And you, you kind of look at it and you're like, okay, if I really create an agent and I get all the data in there, like, basically what I spend the last week of every month doing, this thing's going to do automatically. And then it's kind of like, well, do I want to, to do that? Yes, I do. Do I want to share that? Do I want to tell people I'm doing like, I, I think, I think there's a lot of stuff happening just with human nature that like, there's all this productivity going on and companies aren't even completely recognizing it because there's a lot of workers that are just used to work 45 hours a week. Now they're working 25 hours a week and they don't want anyone to know about it. And they're like, look, I used to spend 25 hours putting this report together. Now I spend 25 minutes and nobody really knows. And so I'm going to protect that. So I, I think there's actually so much more potential that's already exists and, and then you do have these bottlenecks like the com. But I think that the, these kind of, you know, speed bumps are good. Like organizations not fully embracing it as much as they can are good. Eventually they're all going to have to, because other organizations are, startups are going to come along embracing it. But I think there's a lot of speed bumps in the road, which is actually a good thing. We talked about this on one of our episodes last year where people have talked about how you need AI to come along at just the right pace. If it comes around too fast, it creates a collapse too slow, it's not enough productivity. I think things are coming along at a good pace. I think it's actually not taking things over overnight, even though that potential is there. But what's happening is if it did take good things over overnight, we'd have too high of layoffs. There's also probably not enough compute out there to really get done everything that would needed to be done if it was embraced as much as its potential now entails. You have the power constraints on it and then you also have the memory constraints on it. Which is one of the reasons why one of my predictions of like sleeper stock was gsit GSI Technologies, which is like an SRAM company. You know, like memory is a big bottleneck on this and you've seen the DRAM companies and the, the microns and everything take off and you know, there's ways to do a lot of the AI computing with a lot less power, a lot less latency, where you have the memory embedded in the chip, which is basically sram, you know, And I'm not a big technical guy, but I, I look into this stuff closely enough because I was, I started looking into it after Nvidia's deal with grok and I was like, why are they doing this and what does GROK do and what do they have? And I think Nvidia recognizes like the GPUs are great, but there's certain energy, there are certain inference tasks that can be done more efficiently with less power with sram, which is static random access memory instead of DRAM dynamic. And you know, I just looked like what's like a SRAM play with a low market cap, you know, that has a potential for like a really big, you know, 5, 10x move basically. And I came up with this GSI Technologies, which is like an SRAM company involved in aerospace only like 158 employees. It's a $250 million market cap. It's trading around six bucks a share. And I'm like thinking about it like a call option could definitely go to zero, could definitely go to 60 bucks in the next. Let's say some company wants to buy it for 2 billion. That's like an 8x move, right? It's so small, it's ridiculous at a $250 million thing. And so far this year it's been doing good. I think it's up 10 or 15% in the first two trading days of the year. But you know, so there are these things out there that I think AI gives opportunities for and you know, there's a lot of risk involved in some of these things. But there's also just this amazing opportunity that AI is presenting. And I do think that it's eventually going to become part and parcel of everything that people do. But I don't think it's going to happen so quick that everything's going to just collapse.
- [67:33]
Host
Yeah, I would co sign that. I think the, the point that there's a ton of human potential that's untapped right now because human nature is such that they want to protect your, your job and not really shake the cart if you will, is definitely out there. But there's going to be forces. I mean just observing, having jumped down the rabbit hole myself, trying to teach myself and how am I teaching myself going online and finding zoomers that are just cracked out, building a bunch of these agent flows and skill markdown files and just highlighting how they're using it to build products and processes. And it seems like there is a portion of the younger generation, particularly Gen Z, that has really latched onto this and see it as a way to actually be successful in the economy since they can't get jobs at regular companies. And I guess that gets to something I think you've been talking about as well is this sort of changing dynamic in the workforce and who's actually going to be successful moving forward.
- [68:37]
Mel
Yeah, I mean definitely. I think a good corollary example of this would be like Robinhood came out and they recognized off of order flow and different things we can actually run a profitable brokerage. And because of that we're going to not charge any commissions on equity trades. And Schwab and everybody's like whoa, whoa, whoa, whoa, whoa, this is our cash cow. Like we could do it too and make money off of it, but they weren't going to rush to do it. Eventually they had to do it, but they didn't rush to do it. And I think that's a little bit of the situation with AI right now is people are recognizing, corporations are recognizing. With AI, I could basically get rid of commissions in this analogy, but they don't want to do it too quick because it's either the individual's bread or butter or the corporation's bread and butter. And so there's a lot of slow playing going on. But eventually market forces went out and eventually Schwab and all the big ones went to zero commissions on equities. And so that's what's going on with AI right now. Everybody knows that this potential is out there. It's just not happening because there are forces at play that incentivize slow rolling.
- [69:56]
Host
No, it's funny, I've been watching one of the strategies is kids will just go out, download a massive unicorn B2B SaaS app or something like that, and just screen record the UX flow, like go in and do everything they can and then feed it to Claude and say, all right, I want you to make, make this app for me. And I'm just going to go out there and undercut the B2B SaaS company while Claude builds this for me in a few days. It's insane what's happening out there right now.
- [70:25]
Mel
It's insane. I mean, all this, the visual stuff, the nano banana, the coding, I mean cloud code. I mean, to be honest with you, like if I could invest in either anthropic or OpenAI right now, I'd do anthropic probably. And I'm a little nervous about them. And that's probably another risk out there, is that I think I said in one of my posts, maybe Brad Gessner, when Altman said, do you want to sell your shares right now? Maybe he should have said yes, because these hyperscalers are a little bit like. And this is part of where I think the market's seeing is it's now time for AI's Helping Out. We've got this commodity bull run going on, we've got all this other stuff going on and then we're starting to see this disseminate out this, this type of margin increasing potential for the other 493 different areas of the, of the global economy. And some of these massive hyperscalers have not been doing too well. I actually think they're going to have a good year because a lot of them are not at good places in the charts. Like Meta's not at a good place in the charts as it comes into the year. Microsoft isn't. And so I think that in a way, because of where their starting position, the Mag 7 is probably going to outperform the SPY this year. But to me that's not where the beta is, that's not where the big gains are going to be. It's not in buying Meta or Microsoft, although I think they're going to have great years because of how they're coming into the year. I think there's these other plays out there. I mentioned GSI Tech, but that's a small one. But I think when you look at some of the bigger companies like a Capital One Financial, one of their biggest cost items is call centers or customer service. Like are they ever going to need to hire anybody again for customer service? And that's one of their biggest expenses. I mean these things are going to really improve profit margins. So I mean all this stuff that's out there, like I said, I think it's just, it could be happening quicker if there's enough compute, enough power and not this organizational speed bumps and individual speed bumps. And it's just, it's going to play out and it's going to be, I think very beneficial in the long run. But it seems to be now playing out at pretty good speed, actually speed the market likes.
- [72:56]
Host
After some technical difficulties, you may notice by Mel's new headphones here. Beautiful headphones. But I think I was, I was just asking. It seems like we're in this inflection point where you have all these things intersecting at once. Whether it's the reshuffling of the geopolitical order, Bitcoin rising even though it had a bad year, I really taking off and feels like we'll be in a transitionary period for at least the next two to three years. But like what's it look like after that? What does the economy look like after that? And I think you've been very optimistic in the past and I'm becoming more optimistic personally by the day. I think it's going to look really good on the other side of all this if we can thread these needles.
- [73:37]
Mel
Yeah, I mean it's, it's definitely sometimes kind of hard to see the light, you know, before the dawn. And I think a lot of times when you kind of look out on that horizon and you see all of the massive issues that are out there and you can make a very compellative narrative, a very compelling case for why markets should collapse or the banking system can no longer continue the way it is. But one thing I've noticed over the last 25 years is you've always been able to make that case. You were able to make that case in 2000, you were able to make that case in 2009, you were able to make that Case in 2020. There's always this kind of impending doom, this wall of worry kind of hanging over markets. And then you take a step back and you say, well, what is this all? Is it really just kind of a human construct, or is there actually some sort of external constraint on it? And there's not really an external constraint. There's not anybody that says the Federal Reserve can't hold $15 trillion on their balance sheet. There's not anybody that's saying you can't issue massive stimulus checks to get the economy going when there's a global pandemic. There are these exits. And I think there's a great tendency to underestimate the ability of policymakers to keep this shell game going. And all the incentives for everybody pretty much are to keep the shell game going. Like, is it in China's interest for the United States to have a financial collapse? Some people might say, yes, it is, but actually it's not. Like, is it in the US Interest for China to collapse? Some people might say, yeah, that would be great. You know, but what happens then? You know, who take, like right now, they're a known entity. They're reasonable. They. They have a nuclear arsenal. Do we really want them to collapse and have everything go into the hands of some madman? I mean, no. Like, actually, the whole balance of power and global status quo right now. I think it's something we can live with. We can live with three great powers. We can live with, you know, the situation we're in. And so I think everybody's incentivized to just keep this thing going. And if every single global power is incentivized to keep this thing going, why do you think it's all going to collapse, is my question.
- [76:18]
Host
The debt spiral. The debt spiral. It's here.
- [76:21]
Mel
Yeah, the debt spiral. Yeah, we're. We're heading to a debt spiral, and nobody's going to be able to get us out of it. And they're not going to get together at Basel, Switzerland, at the bank for International Settlements, and all the central bankers are going to be like, that's not going to happen. They're not going to get together and figure something out and then on a Sunday night come out with this massive stimulus plan that all of a sudden we've Got the biggest bazooka you've ever seen to buy corporate debt. Of course that's going to happen. And so why do you think if all those kind of band aids in the past worked to create a band aid solution and then keep the status quo going, why do you think that now this time is going to be different? This is the time when the band aid solutions aren't going to work. This is the time when it's really going to all come tumbling down. And I think the smart bet is to bet that if we do get into another one of those situations that the band aid solution they come up with will work for at least another four or five, eight years and then they'll come up with another band aid solution the next time there's another risk of system collapse.
- [77:29]
Host
What do you say to people looking at gold and silver prices right now saying that there's a margin call in the paper markets and the banks are in trouble?
- [77:38]
Mel
Yeah, I, I think they're going to have a great year. I mean, I love precious metals. I think the dollar, like I've said, like I think the whole dollarization world and everybody buys Treasury. I think all that is done and I think the assumption that a lot of people make is if it's done, it's going to lead to this collapse. And I don't see that. But I think we're moving to a new world order. We're moving to a non rules based order, a multipolar world, something more akin to say 1900 than 2000. We're moving to a situation which if you look at 1900, it was a gold based order. And I do think that gold is the central monetary asset of the future, as it was the central monetary asset of the past. That doesn't mean that bitcoin can't play a role at some point in the future. But I think at this point, and I've made this point before, because I know there are certain people that like to say bitcoin is superior to gold in every way. And I've always maintained there are aspects of gold that are superior to bitcoin. There are aspects of bitcoin superior to gold. One of the biggest superior aspects to gold is if you look at things through a central bank perspective is its physicality, its ability to be melted down. No ledger, no history of transactions. You can get bars from somewhere, melt it down, create new bars, nobody knows where you got it. There are certain aspects of gold that are benefits and superior to bitcoin for central banks and different large purchasers of gold, and that's why they like gold. But could they expand to silver? Could they expand to bitcoin? Certainly. And I think what bitcoin offers is right now we have this situation, and I think it was Jordy Visser talking about this in his latest video, where the largest holders of wealth right now are still that baby boomer older generation. And once that wealth transfer begins to happen, the younger generations are much more comfortable with digital assets and they'll be much more willing to look at bitcoin in that fashion. It's not happened yet. I think in a sense, I think bitcoin is going through a awkward puberty right now that, you know, when it was born, it had this great growth and it was sustainable. And then like a person, when you hit puberty, you might have a growth spurt, you might have a little year where you don't do much. And you know, all these things that, that happen and with bitcoin right now is it's still trying to find out exactly who it is. Okay, it's not exactly digital gold. It's not exactly the nasdaq. What is it? I think it's becoming its own asset class. And that's a maturation process that is probably going to finish up at the end of the decade. And by the time that happens, I think financial people in the tradfi world will be much more comfortable with what bitcoin is and it becomes even more and more embedded into the way that the economy works. And this is very bullish. It's a $1.8 trillion market cap right now. I mean, all these things are so bullish longer term. But that doesn't mean that every year it's going to go up 50%, you know, and, and I think that doesn't mean it's not going to be the best performing asset over the next five or ten years. I think it will be. But I think it's a matter of this maturation process and people figuring out what is it. And I think it's a liquidity correlated asset. And I think the fact that it's not completely correlated with gold or the NASDAQ or the bond market is huge. Because anybody that puts together portfolios knows the most important asset in that portfolio is the one that's least correlated to the other assets. And if, if bitcoin can carve out a path where it's got its own correlations, I mean, it's, there's no reason not to put it in every portfolio in the world. And if you do that it goes from 1.8 trillion to 18 trillion pretty quickly.
- [81:41]
Host
Well, that's the point I was going to make too. And when you, the digital gold meme is good. Bitcoin's scarce, divisible, fungible, all that and certainly has those properties of gold. But in terms of digital gold and the aspect of it being used as a central bank or nation state reserve asset at scale, I don't think it has liquidity profile quite yet. 1.88 trillion is certainly nothing to scoff at. But when you're talking about reserves at that level, you need tens of trillions, hundreds of trillions eventually. So we're to your point going to that puberty stage where we got to make that order of magnitude jump to the next liquidity stage.
- [82:22]
Mel
And if you look at that and you think, okay, neutral reserve assets need to have that type of a liquidity profile. I think that's why you're seeing gold do what it is. Like it needs an even bigger liquidity profile. In my book Quas, basically gold and silver come in as neutral reserve assets into the central banking system in 2027, once quantum AI kind of takes over the markets. And, and the, the estimates in my fictional book of where gold needed to be to begin, that was 25,000. You know, like just looking at how much wealth is there in the world, I estimated a quadrillion worth of asset. And I said how much does gold need to be to account for a quadrillion worth of assets? And I came up with it needs to be somewhere around $100,000 an ounce. I said, that's just too big of a leap. And in my book, the government offers a program where they start buying gold and they offer 25,000 an ounce because they know that it needs to go to like 100. I think the liquidity that's needed for a neutral reserve asset is so huge that people are underestimating what gold can go to. I think that bitcoin as it begins to play a role in this, you know, non cash flow related neutral asset game, it doesn't need to like, it's still relatively small. I mean, Nvidia's market cap is more than twice as much of all the bitcoin in the world. Like it's, it needs to get a lot bigger than it is. It will. But I think like I said, it's in a puberty stage right now. It's growing and it's going to have a growth spurt at some point and when it does, it's going to skyrocket to 5, 10 trillion. And people are going to be like, oh wow, I need to, like this is, I think, all going to happen. It's just not necessarily happening out as fast or as quickly as people hoped. And all I have to do is look no further than that bar of silver on my desk and, and say I bought that thing 20 years ago for $11 an ounce. It was at, I watched it skyrocket to $50 an ounce in 2011 and then I watched it go right back to $11 an ounce in 2020 and now it's at $80. Like, assets don't always move at the rates that we want them to. And I'm sure everybody would love to see Bitcoin go to 500,000 next year, but I just don't think that's going to happen.
- [84:56]
Host
All right, we've covered a lot. What haven't we covered in preparation for 2026 that you think people should be on the lookout for?
- [85:07]
Mel
I, I, I think we covered it all. I mean, I think my main thing is like don't be too bearish now because of the Supreme Court thing and the geopolitical stuff because the time to make money is when there's that wall of worry. Once everybody, if they hit that point like they did this past year. Rick Reeder came out, best investment environment ever. John Paul Tudor Jones. We're in the beginning stages of a bubble. This is when you, once those people started coming out and people believed the market could do nothing but go up, that's when it went down. And I think people right now, they're out there saying, well, we think the market could have a rough first half and you know all that, this is probably the time to get it. And in the summer and early fall they'll probably be a point where everybody thinks this can't end and hopefully we'll be on together. And I'll refer them to here and I'll say I'm taking profits now because the time to buy was in January, not in July.
- [86:07]
Host
Oh yeah, well, I can't wait for that. Mel, congrats on a very good 2025. Not perfect, but very good. And here's to a very good 2026. It's always fun doing these with you.
- [86:21]
Mel
Yes, I appreciate it and sorry for the technical difficulties, but always a great time and best to you and yours and to everybody that listens. I know I'm a little bit out there sometimes, especially with my ex posts and different things, but you know, I, I just do this because I love to share it. I trade, I invest. I don't have a newsletter or a research arm. I just think that it's a great opportunity to actually develop my views when I have to present them to others and also a good way to keep me humble, keep me on track. And so I really appreciate the opportunity.
- [87:00]
Host
Well, thank you for doing what you do. I've grown to love these conversations more and more as we continue to have more of that. So we'll probably meet beginning of Q2, catch up, see where we are, and then. Then go on from there.
- [87:17]
Mel
That was perfect. All right.
- [87:18]
Host
Peace and love, freaks. Okay, thank you for listening to this episode of tftc. If you've 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.