Hivemind: Can Bitcoin Reclaim $80k, State of The Market & The AI Trade

Transcript

Nothing said on the hivemind is a recommendation to buy or sell securities or tokens. This podcast is strictly for informational purposes only and any views expressed by anyone on the show are solely our own opinions, not financial advice. >> [music] >> Hello everybody. Welcome back to another episode of the hivemind podcast. I am your host Cedrus. I'm head of research at Delphi.

Um we've got Jose back who's been out for a while. Of course Jose is uh head of Delphi Labs. Um and then we got Yan who's a venture partner and Jason who is head of markets at Delphi Research. So we're recording this on Wednesday, March 3rd, 10:30 a.m. Um Bitcoin is at 73k. Um so we'll probably top tick this but like it's the first the last couple days it's been pretty strong and even on like the down days it was kind of chopping mostly as stocks sold off a lot. Um so

and this is with all the the war stuff going on. You know, of course uh US launched a strike on the 28th which was last which was on Saturday, I believe. Um so we're like a few days into that now. Uh but yeah, you've seen pretty good. Hasn't just been Bitcoin either. You've seen a bunch of alts across the board do well. It's been pretty broad in general uh at least regards to like the majors and stuff. So yeah, I don't know how our people feeling about uh the market right now. Um sure, I guess I'll start. Uh sorry, my cat is just freaking out running on the the thing over there.

Um Yeah, no. I mean, I'm I'm happy with the I'm happy with the with the reaction crypto's had, right? Like generally speaking, um if you had like a a day like yesterday in in equities where we were down, I don't know, like 1 and 1/2 to 2%, um generally Bitcoin and and crypto is just died, right? Like you know, minus 5%, minus 7%. And it's kind of like the first time in the last couple months you've seen crypto kind of have a good reaction to to bad weekend news and then kind of hold strong while equities decided to not do do too well at the, you know, at the open of of the week and stuff. Um

so, like all of the like, I guess, qualitative signs you would want to see for like, you know, some kind of appetite returning back um is there. So, I you know, it's it's definitely constructive like market structure-wise, you're breaking some some some important levels. So, you want to, you know, see that hold and not immediately just retrace in the next day or so. Um I did read something this morning that came across my like little brief that I have set up. Actually, this one came through Telegram from Scott. But, um you're starting to see like kind of kind of like these, you know, correction technical signals start triggering. Not like they're not saying

that like the equity market or whatever is like going to, you know, pull back or or go through like a mini correction. It's just saying that it's seeing some, you know, stresses in credit and and and vol spreads and things like that. Um Uh so, it's just kind of like an early warning of like, "Hey, like, you know, if if these shocks, you know, persist for, you know, a a you know, prolonged period of time as opposed to maybe like a week or two, like you could start to see some um some stresses manifest in in equity markets um and this this these types of signals I guess like they're they're they're better when there isn't like an external shock like

an Iran war type thing. It's like better when it's all like internal market stresses signaling these things. So like that's why you kind of want to wait and see how how this conflict sort sort of plays out over the next week. But like I don't know. I'm seems like equity, seems like crypto, seems like everything's kind of just like not really giving too much of a [ __ ] after a day or so. >> kind of destroyed. Like uh Chinese stock market and Asian markets generally took a hit. But yeah, US seems to be >> Truck and Miller's cooked.

Yeah Korea Korea was down like 10% I'm sure he bought in at a good entry and obviously yeah, he still wanted to ghost. But no, it is pretty funny. Like shortly after that it did like double circuit breaker. I mean the Korean market is is up like two and a half X or something over the last uh like year 18 months something like that. The Koreans no matter which financial market the Koreans just like they just buy. Yeah. Yeah, I mean it's interesting there I think Korea and Japan are two of the only economies that that really benefit from like everything that's happening in AI uh just because of how they're positioned in terms of like memory and and and

like just high-tech components that go into the AI stuff. >> [clears throat] >> Yeah, but they don't have the energy, right? And that's why uh well, Korea I guess. I think Korea gets what all its exports like most of it from Qatar I think and that isn't that like the reason why Korea's sold off over the last day? Yeah, I've no idea honestly. I'm pretty sure that's why but yeah, I don't don't quote me on that. >> [laughter] >> Yeah, I've no [clears throat] idea. >> [snorts] >> So yeah, I don't know. I've I definitely took some some longs um over the weekend when I started to see what the the reaction was to everything and you know, I'm just kind of watching. I don't know. I'm I'm

cautiously optimistic, but um even even without that like you know, short-term stress signals starting to to kind of pop off, equities were losing momentum for for a while. So it's still something I'm I'm generally keeping an eye on. VIX is elevated. So like if we get like a VIX blowout like an actual one like I'd probably just like shove most of the cash I have into uh into risk assets cuz I think like the general backdrop still is is relatively strong. Um so if we got some kind of you know, opportunity like that, I would I would [ __ ] shove probably.

>> It's just It's just crazy how many stocks have got killed and the index is only like 2% off. >> Yeah, right. Yeah, and and that's kind of like what that that correction signal thing I was talking about. It kind of like measures like stresses in in credit spreads and volatility with respect to where the market is trading and since the market's trading effectively, you know, within a percent or two of all-time high, um they they tend to be, you know, pretty strong signals um when when they do start popping off. So something I'm keeping an eye on and we'll probably write about um in the next day or so.

Yeah, it it is unique though in in that um you know, they they the the amount that they drove the market is is so massive and their slowdown isn't necessarily a function of like slowing GDP and and uh growth and and there being kind of economic weakness, but rather just the the sustainability of the spend and and the you know, maybe we need to be discounting future cash flows a bit more if if like there are delays and and um you know, the basically the the the debt schedule doesn't align with revenues and and all the leverage that was built up to to kind of fund this build out. So, people kind of got worried and and just the unknown unknowns of of AI. Um

So, that they're like you you do have this dynamic where, you know, you do have the the leaders falling, but you also have a setup where you don't necessarily need there doesn't need to be this massive follow-through uh all the way through the market. Because it seems pretty contained to those names for specific reasons. Yeah. I guess um Yeah, and I guess unlike the Iran war specifically, this has been something that we've been talking about for at least like 2 years now.

Um so, if it does if we do get a resolution relatively quickly, you got to expect that to be a pretty big uh tailwind. And I feel like that's kind of why Bitcoin has been reacting the way it has. Not that like war is good but that people see a potential end to this. Um But yeah, I guess we'll see how the next like week or two goes. Um >> the effectiveness of the campaign has been nuts. I think the other element is is you know, there's always a concern around the the the closing of the Strait of Hormuz and um Trump came out and basically said they're going to be patrolling it and trying to create create as little disruption as possible,

but it's still a pretty delicate balance and any disruption is definitely going to kind of reverberate through the global economy. But I I I think that's probably helping it a bit where it's not this that I think that the tails tail scenarios have kind of come in a bit. Yeah. Um >> [sighs] >> do you want to keep talking about markets or I know Jose you want to talk about AI, maybe we want to just like go talk about AI from here? I think >> There's some value in in like crypto AI tokens that have done well, too, if we wanted to stay on the the markets topic or we can pivot.

Yeah, yeah. I mean, I think it's mostly it's mostly Venice and uh Near, right? Grass. Grass, right? So, virtual virtual right, yeah. So, Venice is because Venice is like um it's like this private model, and then people have been using it with Open Claw right? Um and so, that's why it's kind of got bid. And then they have like a dual token model where if you buy DM, uh it equals like $1 compute a day.

I think that one from like $100 to like 680. And then like you stake it, and then you get the the compute, I guess, that you need. Um and then VVV, I I guess, is the token that gets all the income and everything. Uh I wasn't really paying attention that much attention to Venice over like the past year. I know it launched like over a year ago. It It launched right at the basically pico top of AI agent season. Um it was like a pretty good airdrop for most people that were like using base and had a lot of these agent tokens and everything.

Um I also think like Did you see the uh I'm not sure how it's done since then, but the Open Claw found like the Open Claw founder hates like he hates crypto. Like and I think he like specifically like blocked Venice or maybe just took it >> specifically It was listed as the primary and and go-to. And so, that created, you know, obviously a lot of excitement. There's a couple things. So, there was the privacy narrative and that were which were really driving um the the price action. And then you had kind of fud on on both sides where people are coming out and trying saying it actually isn't private. And and so, there's there's quite a bit of back and

forth. I don't really know where it's settled out, but it's I guess it's worth noting that the people that are coming out against it are are kind of building competing products. But yeah, that that that part hasn't really been resolved. And then the uh the open claw element, he just basically removed it as the default, but just listed it as one of the many options, basically. Um and his argument was base was just that he wanted to remain neutral. Uh is a Twitter comment the the open claw founder made. And so the idea was just to to not bias any individual one and and rather just leave it to the user, which I think is pretty fair and and um isn't it's it's like a downgrade in terms of the narrative for the token, but it's not necessarily a

net a just a pure negative in that scenario. Yeah, the DM stuff is interesting, right? If it's a a dollar of of compute a day, you know, at 120 um dollars, it pays for itself in in 4 months. And then well, obviously as it really balloons, it it makes that payback period quite a bit longer. Um And then you you basically deposit VVV and and mint DM uh that allows you to mint it. So you can buy it directly or or mint it. Um And so there's there's an interesting kind of relationship there where as demand for free usage goes up, it's it uh you know, you basically it's easier to mint it

than it is to buy it. Um And so that that like that drives demand for VVV and kind of creates a a a loop. How do you How do you Wait, wait, how do you mint it though? It's like I'm assuming it's not like every VVV has like a certain amount they can mint in their life. It's like you need to stake VVV for a certain amount of time or something. Yeah, you stake it and then the minting function is a is based on the supply of DM. So as the amount of they they target a specific amount and as the quantity goes up you mint less and less and then as the quantity of it comes

down, you're able to mint more. So, it's this dynamic mint rate um that's based on kind of uh the amount of DM that exists. Okay. And then what's the incentive for like burning DM? Uh I think to unlock your VVV, basically. Oh, okay. Oh, okay. So, your VVV, I see. Your VVV is like locked. So, yeah. So, I you could like mint it and then sell it.

But then it rips. And then you're kind of like, "Oh, [ __ ] It's going to cost me way too much to get back my VVV." Yeah, I mean, it definitely has a bit of a natural ceiling because of the payback period, right? Like at that point, you just rather pay for the compute directly. Yeah. Okay. Yeah, I've seen a lot of people using it. We have like an open claw chat with a bunch of people at Delphi. See a lot of people have been using it recently, which is cool. It's like I don't know, it's actually AI in crypto is definitely I like everyone soured on it over the past year or so.

Uh cuz agents like pumped and dumped, but it's still obviously kind of like the area that makes the most sense. Um even like I was talking like with regards and we'll stay on this topic, but just cuz we're on it, like this whole solar founder era right? Where you've never for the first time really, it feels like you can have a solar founder credit product that's like 10 mil, 100 mil ARR, right? >> Yeah. And that's like >> seen that though. We haven't. We haven't, but that's also perfect like that's really literally perfect for some of these like like Meta DAO, Soar, um I think there's like a tokenized equity one like these platforms where those those kind of founders are not

venture backable, right? Um maybe maybe but like for the most part they're not venture backable. They like it's one guy, it changes too quick all this stuff. They don't need to raise a ton of money. Like it really does seem like this is like capital formation has always been crypto's killer use case and it's like I mean I know we've been saying stuff like this forever but it sometimes stuff just takes time and it really feels like this is such a big opportunity for crypto. Yeah, I really like um did any of you guys read the 2025 like Ribbit report on tokenization? Yeah, the token report.

Yeah. I really liked it cuz uh it was like quite elegant the way it basically described it it was a report on tokenization which covered both AI tokenization so like LLM word tokens and then also crypto tokenization. And the way it defined tokenization was tokenization is making the world legible to for computers. Which I think is like very true and [clears throat] very like elegantly applies to both kind of right like LLM word tokens make the world like literally legible to to AI models, right? And then crypto tokenization I think makes um like capital to some extent uh like legible for computers. And in the case

of crypto I kind of change it to making the world legible to computers to make it legible to capital. And I think it's like an interesting way to think about it and to think about when it makes sense to to tokenize. Um yeah, cuz we kind of seen it with crypto, right? Like meme coins kind of make this this like culture or belief or or attention or whatever uh suddenly tradeable because they make it legible, right? They turn [clears throat] like uh a dog meme into something that's discrete priceable transferable you know, enforceable, and now you can bet on it. And then, like governance tokens, you kind of make power over an open source system like legible, and and now you can bet on

it, right? Like you can control the parameters of an open source system or or get fees from it or whatever. And I think you can go down the list. Um Yeah, I I I just think and I think AI tokens to some extent uh Yeah, I I I think like agents are are like a reflection of this and His he wrote that post and I think A16Z has a good one, too, of just like how these rails were actually made for machines rather than rather than humans. And I do think if an AI wants to be uh truly sort of sovereign, like it just makes a lot like you you can deploy a smart contract without needing an API key or without interacting with any centralized services, right? Like all you need is to have a wallet and like a a server to

some extent. And you're already seeing these like emerging behaviors with like open claw agents. So, I do think the thing we were all bullish on a year and a half ago or whatever is going to is going to happen, but I think it hasn't happened yet. Like you kind of know That's one thing I've kind of learned in in venture. I think you you kind of know when something has reached the like like the the it's happening, right? Like you you you haven't had like the Open AI, the ChatGPT moment for this, I don't think.

Um and I don't know what it will be, like like what the use case is that actually drives this this stuff. Like it's hard to hard to say hard to say right now, but I do think it's going to happen and there going to be interesting plays. But I'm not sure if you have any ideas on what it might look like since you probably got your claws in a bunch of a bunch of this AI stuff. Uh Um No, honestly, I have no idea what the crypto what the first like crypto AI use cases will be like cuz I I think agents can use crypto rails, you know, already.

Well, I mean Venice is like that's something. It's interesting. But but I don't I don't get what the private Do you guys Did you guys look at where the privacy comes from? >> I don't know where the privacy comes from no. Yeah, there's like different definitions of it if it's a mixer, if it's some degree of obfuscation. They they chat they they mentioned way back in early 2025 where they were trying to do uh to encrypt the the kind of the prompts and the outputs. I don't but I don't know if they've gotten there yet.

Yeah. I don't know what the where the pri cuz the only reason to use this is privacy, right? Like cuz Curse is not just a model aggregator. Like they have their own models that that do a bunch of interesting stuff. Um Well, I mean like the token model is like something kind of interesting like owning the the like VVV I'm assuming owns gets like revenue share from people paying for compute. I mean that's that's I don't know that's cool and it's open source, right? So, but yeah, I know what you're saying.

There has It there needs to be a fundamental reason still to use VVV. And and it's also like it's still not on chain, right? It's like you buy this stuff on on chain, but then there's a centralized service that that you're relying on to like you know, host the the models and honor the this conversion and stuff. So, I don't know. It doesn't Yeah, I guess no one really cares. Once these things start going up. Yeah, I don't necessarily know that it needs to be on chain though. I think that like the the point like crypto helping AI here is for really like the capital formation and then like that whole side of it.

I don't know if like things are going to be directly on chain outside of like the token and like the the economics of that and everything. I also think like USDAI is is is pretty interesting on that on that front where um basically We're investors by the way. Yeah, asset-backed loans, right? And so you create um liquidity for these assets where otherwise it's locked. So the ability to kind of borrow against your hardware to unlock additional liquidity.

I don't know. Near is also like I think what they're building is pretty interesting. And I think people I I saw a lot of people hating on them on the timeline for like how often they they change their narrative or whatever going back to algo stablecoins back in the day when they had their Near USD. I think that's just like what you're supposed to do to try and find product-market fit as an L1, you know? And I think with the AI stuff like uh they've always been thinking they've been they've been building this for like years, you know? Like the the the same narrative of like use your own AI and what you need in terms of the stack to do that, privacy and stuff like this.

And I know uh you know, I I I having spoken to Illia like he definitely has a lot of opportunities to not be doing like a lot of founders in crypto slow rug or or or or just just literally rug with a lot less opportunity cost than what Illia has being he's like super deep into AI and one of the you know, one of the authors on the on the original Transformers paper. And he's like consistently just kept shipping on Near, kept building cool stuff. So I don't know. He's he's definitely one of the most credible like well, he's definitely the most credible crypto AI founder in in in the space, I think. Like uh And yeah, like a lot of the stuff he's doing makes a lot of sense, right?

And you're kind of seeing it now. Like you do want and if this TE stuff works, I do think there's going to be like some some some pretty serious demand for it. Um yeah. So No, yeah, like I agree. I don't think that I mean, I used to make fun of all their pivots, too. Especially when they did near DA. I was like, "Okay, come on, guys." But um it does kind of highlight that they're able to like ship like actual products pretty quickly and they're pretty adaptable and like um it like near intense, okay? They he basically got pilled on intense by uh Adrian and Anoma and was like, "Oh, this is actually pretty cool. Let's do this." And now near intense does like all the Zcash

volume, does a bunch of other stuff. And so they continue just to get shots on goal. And then once they get products that work, like near intense, now they're doing other stuff, too, right? And like they keep doing this, they can build a pretty big suite. Um I have been impressed with like I've never really held near I felt it like a couple times in the past and it never worked out. Um but like I do respect their they're all like technologists, too. And I do respect not actually launching like multiple tokens for all these products and everything, right? And continuing to do it under the near umbrella and trying stuff. And their new thing is this uh it's like iron claw, right? So what is it like open claw with

TEs, right? Is that essentially what it is? >> private And that's a good That's another good shot on goal, right? Like And even now we just with intense, like they're they're they're now slightly deflationary um cuz they they burn a portion of the intense revenue. And and they have some emissions for network security and they're actually slightly inflationary, which like is pretty unheard of for an L1 that's not kind of predicated on token transfers.

It's like a business model in in the L1. >> [snorts] >> Yeah, it's definitely worth looking into them deeper. I know I saw I saw a bunch of Tao guys on the timeline angry that people are trying to make near AI. >> [laughter] >> The I play. But I mean That might be why they are so hated though, right? It's cuz they've just like jumped in on narratives and then the existing ones are just like, hey man, stay in your lane. Yeah, like no, even like intents, like Anoma was so early to intents and they were right about that becoming such like a dominant way of using blockchains.

But then near just came and was like, oh, we're going to do all these things. >> now. Volume and they took it and it's like you know, as an Anoma investor, it's kind of like, damn, that sucks cuz like Yeah. They were they that would be that's such a Anoma's whole thing was always privacy and intents and everything and it's like being the Zcash trading layer is like the main >> with Anoma actually? What's what's Anoma up to? They're launching they they launched uh they they're launching their router on uh a bunch of the EVM chains and Solana.

I'm not sure when yet, but then you'll be able to do like all the cross chain intents and everything across all those all those chains and then so it will be a competitor to near intents. Um and then they also like Anoma's always been big on the privacy, right? I'm not sure I'm like trading trading privacy, not just like trading Zcash, right? Um So, they'll definitely be a competitor to near to near intents. Um I know that they were also working on some in-house products that I'm not sure the status of um right now, but uh Yeah, they're still I mean they're still yeah, they're still launching a bunch of their stuff

soon. Jose, how are you uh uh I know you mentioned this before we we started and while we're kind of still on the, you know, AI topic of things, how are you uh positioned nowadays? I know uh you've made some moves over the last couple months. Um and as somebody who uh doesn't have enough AI exposure, this is kind of a selfish question here. So, please spill the beans. Yeah. Um I mean, in in in initially it was I was pretty overweight like the basically just the hyper like I I I I can't think we talked about it actually on this on this podcast a bunch of times. I was just basically overweight the hyperscalers.

Uh both the US ones and the Chinese ones. So, like Nvidia, Microsoft, you know, Google, Meta, this this kind of thing and then Baba, Baidu, Tencent and few of those names. Um I think over the last few months I kind of started seeing like I don't know I used Copilot the other day and it's it's it's like shockingly terrible. Like I use it cuz actually my my one of my uh uncles is like that's his experience with AI and I was like, "Dude, that Yeah, this this Yeah." And and I just think that that in general the the hyperscalers have kind of like other than Google have failed to execute on AI like at the model or application layer, right?

They're just owning the compute like you know, they don't have like and and it and it's kind of like all their businesses I'm I'm I'm not sure like for instance like office is still going to be a thing in a AI era. Like are you still going to do PowerPoint and and like literally AI can just code you up a a presentation in HTML as a website, right? Um and like Word and and all and all this stuff I just don't know that these things will will will still be like going concerns. Um and I feel like they just end up and then the same with like Amazon. Like I'm I'm sure you keep you're going to keep uh ordering things on Amazon, you know, I think like agents are just going to order directly and and have access to

like all this information. Um so then it's like they're basically have or like compute businesses, right? Like that's the the biggest thing that keeps accelerating and I think it will keep accelerating cuz they they they basically have like own most of the of the compute. Um but at some point if if the application and model companies are making all the money, they own the user, they're just going to like vertically integrate up the compute stack, you know, kind of like what what uh what um Grok is doing with with SpaceX. Like you'd imagine they just they just own the compute themselves. And so I think it'll it'll the mar- margins will go down like quite a lot on the on the cloud businesses over time. I don't think

it'll happen yet. Like I think over the next 12 months you're still going to see like revenue accelerating and stuff like that. But at some point I think the market starts repricing them um where they're not these like monopolies of, you know, the these massive like monopoly businesses that have in software, but actually just like hardware businesses with not much differentiation, like very price sensitive. Um and and like yeah, so and and I also think a lot of stuff's going to happen on prem, too, with AI. Like not just with with uh you know, pe- people are going to run like these open-source models locally, too. So yeah, all in all I'm just kind of like not as like initially it was it was like these guys have the talent, they have the data, they have the capital, they have the distribution.

It just seems like they're going to crush everyone. But now the model companies have out-executed them so badly. Um I'm seeing so much stuff in private markets that's that's going after like all the different parts of their business. Um that it just feels like you have to kind of go up the stack to some extent. And so the way I'm playing it is just um you know, by all like if you look at Epoch AI or whatever, it seems like the next big bottleneck is is going to be like energy. And I'm like very AGI pills, so I think we're going to have like compute build out for 5 years. I don't think that slows down anytime soon. And so just thinking about all the things that that need to be that need to to happen for us to have this this compute build out that would you know that I think is

going to happen. So like one of them is is energy, right? Like the gas turbine companies like I have like Siemens Energy and I have a you know a company called Bloom and a few others where it's just like they basically produce gas turbines. Their their revenue is like inflecting. They have massive wait lists and like gas turbines are the way to scale energy just because you don't rely on the grid. You can actually like produce it yourself. Um and and then I have a constellation energy a bunch of others. Then I think the the infrastructure companies are interesting are interesting too. Like Constellation Energy would be would be in there. I think some people would would go long Coreweave and things like that or like some of the suppliers like the cable for instance. I don't know people

have done that. Like the electrical cable that you need to build out this this stuff. Um and then just like commodities needed for for chips and electrification. The biggest one's obviously copper, but then like rare earths and and and and minerals as well. Um and then yeah, I have some other stuff. I have some I have a lot of gold. Um and I have some defense like especially European defense cuz I think that's like up only from here. Like after what Trump's been doing, I think it's kind of yeah, Europe no matter what they they would they they think they have to rearm. They've committed like 800 billion euros by 2030 in rearmament. So I'm just yeah, I'm I think this stuff yeah, it's it's sort of not as exciting as crypto. I don't think it's going to

have as big upside as as crypto, but it seems like yeah, it's just the only way I could play that that makes sense to play like the the public market stuff at least for me for me right now. Yeah, and then I'm I'm still very bullish on on China too, so I'm expand like we're I'm about to go there for for a few weeks, so um going to be meeting with a lot of uh like founders and and actually some some public company CEOs and trying to figure out like how to play it how to play that cuz I think it's really interesting what's happening there.

Um yeah. That's basically how I'm thinking about it, but curious how how others are are playing it if you are. No, that was that was great. Um I'm still trying like I said at the at the beginning that was a a fairly selfish question as I'm I'm trying to put together all of all of the moving parts. Obviously, I think the Europe defense allocation makes a lot of sense. Um whether or not, right? That's that's what Trump wanted or not, who cares, right? Like that's what they have to do given everything that's happened, so uh it makes a lot of sense. Uh yeah, I mean uh I need to uh

look into a lot of the energy and and other AI adjacent type things you were you were mentioning as out of the hyperscalers because last year I really didn't do a good job uh of of getting a ton of exposure during the tariff tantrum. And honestly, that was probably my biggest um [ __ ] up last year for sure. Um so I'm trying to play catch up and trying to figure out like what the what the ideal like I don't know thesis or allocation looks like today uh without any of that foundational portfolio positions from last year. Um gold also has been something I've been buying a lot of as well. Um just kind of collecting different little gold bar things. Um

And yeah, just actual physical gold, not like GLD or any of that [ __ ] like actual gold. Um Yeah, and then crypto like I I'm actually fairly bullish Bitcoin. Like I I bought um like I said, I bought some over the weekend. Um I I think I think if things kind of keep going the way they're going, Bitcoin specifically makes a makes a another kind of resurgence with with institutional capital. Um So, yeah. I don't know.

Similar. I just don't have the AI sleeve or allocation yet really and it's kind of killing me inside. >> [clears throat] >> I definitely think international will continue to do well. Like you also hear in people like international I'm like a lazy stock investor. I just go on the global index basically cuz I got no time to like I I spent too much time in crypto. I'm not going to delude myself into thinking that I can like play all this. But, um like international is now been outperforming for like close to a year and a half and people are taking it more seriously, you know?

Um and the more it's kind of like the longer it's like kind of Lindy in a sense where like the longer international continues to do well, the more and more people are going to start allocating to it, which will like in turn cause it to do well. And like if the dollar is going to also just get weaker over the next few years, um that again just boost international returns from like the currency gains, right? So, and then to your point like the defense spending they I remember there was like March or April of last year when Germany, I think it was, came up with that massive like defense spending announcement and that basically since then has like set off a lot. Um Yeah, the

index has two-Xed the the European defense index. >> Trump's also forcing it saying everyone needs to up to 5%. Uh for NATO spend. I think it's going to happen. Uh it also creates a lot of private market like uh opportunities, too, cuz like yeah, private privates and defense are just like inflecting revenue like crazy right now. What do you What do you mean in the privates? Like what what do you What do you kind of talking about? >> basically. Yeah. Um or like a lot of them are are just inflecting like like crazy.

Uh we've also been spending a bunch of time with like some of the Ukraine drone startups, like super interesting stuff happening >> Yeah, drones drone seem like a pretty good. Like I don't know what multiples they trade at. Um so obviously valuation matters, but that's like such an obvious defense sector that is kind of just up only in terms of like usage, right? In general, I've been trying to simplify it. Like the way I think about my portfolio is I think there are like three important trends happening in the world in my mind. The first one is like AGI is coming. To me, that's like the dominant trend, like the thing that's most important happening in the world cuz I think it's going to drive the most change, the most capital, the most

everything, and it has a bunch of offshoots. The second one is the world is moving from from like unipolar to multipolar, I think, with, you know, the rise of China, uh you know, what Trump's doing, forcing Europe to rearm, and and and just become more independent, like all this kind of thing. And then the third is like currency debasement and debt and just like fiat going to zero. And I basically think like I want to have a portfolio that and like I'm basically trying to construct an index that that is like levered on those three those three trends rather than just a world index, if that makes sense.

Um that's how I think about it. Like just And so, yeah, I think Bitcoin and and crypto has has a has a place there. And then I think the other stuff I was talking about is has a has a place there. And I do think private markets, so like the stuff that venture investors in in invest in and and to some extent private equity is going to have a crazy like few years to just because of the amount of like displacement and innovation that's happening and then and it's so hard to to pivot an existing company to adjust to it. Like we we've kind of even seen it at at Delphi to a to a smaller degree. Like we've been trying to obviously over the last few years we've been trying to get more and more active in AI and and you know, get everyone

clued up on this stuff and it's it's hard, right? Like it's it's hard to get people to to research these things to use the new tools to to to learn something completely new and outside of your comfort zone and that's and we're like our you know, we're like 70 people or something, right? And if you think about like a thousand or or few thousand or tens of thousand company it's I just it'll be such a hard task to to get it to to pivot. I I I think some companies are just cooked like India for instance has a 300 billion dollar I was researching this the other day. It's a 300 billion dollar IT outsourcing sector. Yeah. And that that that to me just seems it's like it's 8% of the economy, you know, and that that to me just seems like it's

it's going to get like it's going to get decimated, right? Like you you just don't >> And quickly. Yeah, like it just happens. Yeah. The crazy thing is Q4 it was up like 8%, you know, so these things just happen like and like Google search revenue is still up like you know, so these things just happen slower than you think when you're at the edge, but like still it just seems inevitable that so even I was looking at Leopold Ashbrenner's portfolio. He like he shorted Infosys this this quarter which is like the biggest India IT outsourcing company. Like I think that's a really interesting. I think like in general it's like the return of active management and like hedge funds and like people who are who have their finger on the pulse right now in public markets are just going to print. Like long short

I think is going to have like a resurgence, you know, before you could just like with passive and stuff it was just everything was up only. You just got cooked on shorts. I think you're going to be able to make a killing on long short and just like analysis and and and and all that [ __ ] again in this in this transition. Oh, yeah, definitely this is like the active manager uh era. I think it's really I think it's really I we said at the beginning like a lot of stocks are getting hammered, but the index is close to all-time highs. Like you have seen all like all this rotation. It is very I think it's a I think most people are kind of excited by the prospect of this new market environment that we just haven't had for like 10 years or so, right? I think your

point of like companies using AI and all this um like we've definitely noticed an increase over the past probably like just like 2 3 months. Like a lot of people internally are using open claw now. People are like vibe coding their own things. And uh you know, Aneel's been really pushing a lot of uh AI stuff internally and like we still feel behind, but then it's like think if you think about a lot of the the the banks and like financial firms, they're still not even allowed to use ChatGPT for like compliance reasons, you know?

And so there is a part that the usage is like accelerating, but then there is another part that is just lagging. Um mostly just due to like legal or like compliance or just slow-moving corporations. Yeah, those compliance things are are kind of both features and bugs, right? They're like on one hand they will slow them down, but on the other they are are one of the moats in AI that that can kind of insulate those businesses to some degree. Not all of them, but certainly some.

Regulatory moats and and and kind of compliance issues. And so like it it does on one hand stop them from using it, but on the other hand it it is a a barrier against their disruption. Yeah, I think fintech and like bio and just hardware are the things that are like more defended just cuz they have like regulatory moats and then just like hardware moats as well, at least for now, but yeah, it's just coming after It's just crazy how fast things change too. Like everybody was [ __ ] on Apple for the past like year about how they were just so behind in AI and everything.

>> [laughter] >> And now I've seen [clears throat] tons of people talking about Apple as like a really good hardware But it's like that Homelander meme where where he killed the guy and everyone's celebrating. It's just like Apple is spending zero on hyperscale build out and it turns out to be the right thing just to sit on all that cash. Well, cuz it's like I think it was the part with the Anthropic CEO who basically talked about like all these people committing to compute. It's like if your estimate is off by even like 5%, you can totally bankrupt your business, right? >> I didn't follow that maths. I need to go chat to I Basically the amount of leverage you need to put on relative to the amount of revenue you generate from all that build out.

But why? Because you're you're you're pre-committing in advance base is like a debt covenant or something? And you're just levering up as well. Like it's not a problem now, but it is a problem later on as as you get more levered. You're you're just that you know, you're sensitive >> just raising equity, right? They're just raising equity. No, a bunch pivoted to debt. Yeah, let's say like you commit to two trillion of compute and then you only make like 800 billion. That's like a massive shortfall. >> Yeah. Yeah, it started with Larry I'm I'm blanking on Larry Ellison's uh Oracle? Oracle. They were like one of the early ones that that pivoted. And that was when you had the first big tantrum.

But that is on Oracle, right? That's the that's the thing. Like it's not they're taking the credit risk for for ChatGPT, for OpenAI, not not OpenAI itself. Yeah, but it it it it relates to a bunch of these other builders where it's like if if you don't the revenue doesn't just doesn't flow through to the the that you think it will. Cuz it is all kind of intertwined. Mhm. Yeah. Yeah, I guess so. Yeah, the models are looking are looking great now, hey? Like people weren't sure whether these things would be good businesses. They're looking They're looking like they might be the Sometimes I think they might be the only businesses, like the only software businesses at least left, like yeah.

I'm not totally convinced that software just goes to zero. I don't think so either. Yeah. Like a lot of these See, the thing about it, like these software companies are going to be using AI to make their software better, too, right? And then you get these contracts locked in. There's definitely There's definitely a lot of There's going to be a lot of like compression, and there's definitely a lot more competition now, but uh I don't know. I'm not totally convinced that like all these software companies It's kind of just been an overreaction, like Claude puts out a bot for this, this sector's dead. Claude puts out a bot for this, all this sector's dead.

>> the SaaS index was down like 80% at one point. It was like [ __ ] crazy. I was like, man, if if Yeah, just like that. One of that time. If you had good agents, if you had like some Yeah, if you're like a hedge fund, you can go look at the individual names and see cuz some of them are going to probably get better with AI, right? Like more profitable, they have the relationships, they can have like agents on top. Like even what Salesforce is doing with their like sales agents, I think it's pretty interesting. You know, if they can literally become a Salesforce. Yeah, it's two things though, right? Like you're You see this name down X percent and you think, oh, no way it's that bad. But the problem is you have both like earnings take a hit and and you have multiple compression of

your >> And so it's just like you get hit on both, and then it's like, all right, maybe this is the right price for it in reality. Yeah. Yeah, I don't know. I was thinking like enterprise software is probably a little bit safer than most of the other [ __ ] mainly because I don't know. They'll probably I don't know. Enterprises aren't going to use vibe-coded [ __ ] right? Like at least not for a a long time. Aren't, but it's like it's an option at least, right? Like it's They can Like some of They can budget internally to say how how how how much would it take you to build this? And then when they're and and also there's like two things. When you renew, they're like, "Okay, we're going to increase the price by Normally, SAS companies will just like this year we'll

increase the price 5% or whatever and and they can just be like, "Listen, no. Like, we can't we know we can build this internally for this much. You know, you're going to actually like take the price down by this much." And then the other thing is just if you need less developers to do to to to deliver your product, then you're just buying less seats, right? For these like SAS things they're they're levered to seats, like and so I think if all these companies get smaller, it's just like reflexive, right? On the on the on on the downside. Um So, yeah, I I haven't taken any stabs at I don't have time honestly to to look at the SAS companies and like try and figure out which ones are cheap. Like, I'd love to find a manager that's that specialize in this cuz I think they'll

make a killing, but I I don't have the the time for it to be taking punts at Salesforce or whatever. Yeah, I feel like I'm just the dumb money in that scenario. Kind of just taking a stab and probably the dumb money in most of these scenarios. That's why I'm forcing my thinking to you guys. Yeah. But, it's it's it's it's exciting and and like terrifying too. Uh sometimes. Yeah. It it feels like energy is a really good spot though. Like, just cuz you you have like such cap It feels like your downside is very capped on even the most expensive things in energy aren't trading that crazy.

Like, maybe Constellation energy That's not really an energy company. It's more like a infrastructure, but they're not really trading that crazy. Um and it just seems like you're going to have a persistent bid from from this build-out. I don't know. Yeah. And the bunch of the You see Leopold bought a bunch of the Bitcoin miners? Yeah, he's repurposing them, right? Yeah. Yeah. Thought that was interesting. Which makes sense. Just you have the bones.

Maybe the galaxy will get a bid. Duncan's galaxy going back from the dead. It's up today. It's up 12% just with everything else. Is this true that uh MicroStrategy has a uh MNAV premium again? They've had one for a couple days, I thought. Yeah. >> Oh, really? I thought they did. >> That's good cuz it got down to I didn't I didn't fact I guess this is the pump. I was going to say where did he get money from? This dude's a wizard with just finding money in the banana stand.

There's always money. Crazy. Yeah, I think Bitcoin is like very like looks good. I bought I've been buying Bitcoin like last few weeks, months. It's the only thing I've been buying, honestly. Like I I like >> gold's taking a hit, right? I think part of it's there's like a a bunch of of apparently uh Korean funds that were with exposure to Korean markets that that had margin calls and and had to sell gold as a result. I think that was part of the the source of the drawdown.

>> Um but yeah, now now you look at Bitcoin as a percentage of gold and and it just you start doing some moon math and then it tracks again. It looks great again. It looks cheap again, yeah. It's nice. Um yeah. And I think if Bitcoin does well, everything else will probably get a get a catch-up bid. I I still Yeah. I still I basically still have the same thesis on crypto I did previously. Uh hopefully something in AI gets product market fit, but it's unclear to me what that'll be.

Yeah, hopefully that I I mean and there's a world where I I like I I'm fully bought in bought into the world that that or to the scenario where it does it just makes too much sense. I think we'll definitely have some like insane moments of like an AI agent trading or like playing Polymarket or something like this. Um being like self-hosted on a on a T or something and just like, you know, you're just watching this thing like make money on chain. The real goat. Cuz I've also been just speaking to to some uh I've been just trying to speak to some more hedge funds to to again try and get this exposure and a lot of them are using LLMs to trade already.

Which In what way? Like what do you mean? So the one the one uh one of the ones I spoke to that they basically just plug in all their data um so to to the to the LLMs and and then they're like literally refreshing it every every 20 or 30 seconds and uh it's actually generating like uh so this is this is a systematic hedge fund, not even a like a discretionary one, more of like a quant uh and it's it's generating like tradeable insights like based on their context and the and all the data they have access to and stuff like that.

>> giving it like past trades and then like parameters or things that they want it to find. >> Yeah. Yeah, I think live prices, volumes, like correlations and I I don't know enough about quant to to really know what go what goes into making the the soup, but yeah, a lot of that stuff um they're doing. Which I think is That makes a lot of sense. I think it makes a lot a lot of sense to focus on quant stuff first. I feel like discretionary's a bit harder to do, but >> Oh. it's probably I would almost argue that it's like more incrementally valuable for discretionary because the quant funds are already very algorithmically driven. Right? And so it's just like slapping another algorithm on top of their existing ones.

Oh, yeah, yeah. It would it would make Yeah. Yeah. Whereas like on the discretionary side, it's just like helping you process this information faster than you'd previously do it through an analyst and and and spreadsheets and all of that. I'm sure that's happening like on all of them, for sure. I heard Goldman's also like not hiring junior analysts this year. I don't know where I read that, and it's like they're just telling all the all the partners like just figure it out. So, a lot of sectors. That's being a new grad now sucks. Yeah.

>> Yeah. Like that's the area where like if you're a lot younger, like you're still in elementary school or like high school, whatever, things will be so much different. And then obviously people who have established careers right now are in a decent spot, but it's the entry-level jobs that are getting cut. Um which is definitely seems like that's the biggest risk to the economy. Maybe brings us to the Citrini thing, not to belabor it, but I'm curious where you guys sit on that. I think my my biggest takeaway from the Citrini thing is that the authors up front said how this was like very low probability and was kind of like this exercise in just

thinking about another scenario just to like think about it, so like people are aware. And everyone like really [ __ ] hated them for doing that, right? Like people do not want to even read or think about the bear case, even if up front they're like, "Hey, this is mostly for like you know, illustrative purposes, like a nice piece of writing. Um it's well researched and everything, but it's not like what we necessarily think uh is like most likely to happen." Even with all those disclaimers like you had First of all, it impacted the market, which is insane. Second of all, you had rebuttals from like Citadel like >> Yeah.

>> the econ like the economist, like all these publications, like everybody felt like they had to come out and say why it was wrong, which is like kind of a little bit um unnerving, I guess, right? That like everybody had to come out and and say why it's wrong. >> based on the amount of attention it got. I mean, what he said in there wasn't necessarily new, right? It's kind of what everyone's been thinking about as the not everyone, but like people have been thinking about the bear case. I think he just packaged it really well and into a digestible way for everyone to really kind of see the the various kind of how various areas are are going all going to be affected and kind of all

basically at the same time. Um but yeah, he mentioned you're right, it's an edge case bear case. I think the the biggest counter is there there were no bullish elements discussed. Right? And and like it's not it just can't be all bearish. There's there's got to obviously there's going to be there's like a an offsetting gain in productivity and growth and and all of this stuff and so um I think it was it was a good piece to trigger a bunch of people. It's well-written, well-researched, but I I like I I yeah, I assign a pretty low probability to it. Not not because I don't think that some of that stuff is isn't going to happen, but I just think there are a lot of bullish elements that come along with some of that stuff happening.

And then even in like the biggest edge case, I think you you probably get some some doomsday scenarios where, you know, governments will intervene before Yeah. some of this stuff gets really bad in a world where we're ignoring the the bullish side or you just get like mass printing or something. Yeah. Yeah, I I I think the the majority of the argument is like whether you believe that um it will be like every other technology where it's like a complement to labor, right? And like eventually you find new jobs that people do and they can do more and it's and increases productivity and stuff like this. Which I think it well, I think it'll increase productivity regardless, but are there any jobs basically?

Like what there were with all other technological revolutions or do you think like these jobs are gone for good? Um I I I'm like and that's that's kind of what Citadel's rebuttal was Like, you know, smarter words, but I think the TLDR and for me I'm I'm like a citrine short-term and Citadel like long-term, basically. And that's I think in the short medium-term like the path dependency when I just look at some of my some of my cousins or or like people I know here here in Portugal who graduated like with a business degree with with good grades and went to work at like Deloitte or somewhere or one of the consultants one of the and and I I just think those jobs are cooked and extremely hard to to get back, you know? And and I and I

think there's going to be a period of time where you just have these people like unable to to get new jobs. And at the same time, the rich getting richer and richer and richer like in in private markets and in public markets. And I think that can has historically been, you know, not a not a great combination for like social um like social tensions. And so and I think in the long-term it'll be fine. Like everything will be really cheap. We'll have abundance. I'm in I'm a full AGI pilled person. Um uh and people will also find new things to do. But the short-to-medium term I think can be pretty ugly. Like cuz I really don't it feels different than the previous ones where like this thing can just is so much

better than me at most things, you know? And and and it's much cheaper than me. Like I have to eat and and be housed and and like I have health issues, you know? Like this thing is just is just the cost of inference. And it's only going to go down and it's the worst it'll ever be. Like Yeah. >> You've seen it pick up quite a bit already, right? Like it's it's it actually, you know, running some of these agents on an annual basis isn't, you know, 1/100 the the cost of the employee for some of the stuff. Um so it's like there is somewhat of a floor cuz it just takes so long for the energy build-out to happen, you know, that's that that is going to be the bottleneck and for better for worse, that that slow build-out will kind of I think

act to temper the growth, but also probably ease the the volatility of the transition. I don't know what people are going to do though. I like it I I think in in previous transitions, you know, industrial revolution, you were doing labor in in one form, but now you're just kind of still doing labor, but in in a different setting and and and increased output. Um and then the next generation shifted to to more white-collar work as tech revolution happened. I like I I don't know what what where the like this glut of unemployed kind of, you know, uh early-stage white-collar workers are going to do.

Um I mean, the social unrest has definitely been increasing. Like you've seen data centers get like >> was like my big takeaway when I was reading this. Number one, right? Like if Citrine's right and it kind of goes down this path, there's no way number one the government doesn't try to slow it down in some way, shape, or form. And number two, there's no way people don't People aren't just going to like sit there and let all of their careers and livelihoods and everything and all of their ability to provide for their families just like they're not going to just there will be a ton of, you know, civil social type of unrest before it gets to the point where Citrine's, you know, thesis fully plays out in my opinion.

And then to Jan's point, like if you go back to the industrial revolution, like steam engines and [ __ ] like yeah, somebody who rides a horse or a you know, what is like a horse and buggy might not have been able to like fathom what like a car and like a highway system might be, but like it's really not that big of a retraining, right? Like you're still driving something. Like it's still like in the same universe of of things. Uh whereas like now like I don't know, maybe it just goes like the way of like, you know, what trading floors used to be. You had like dozens or hundreds of people on trading floors with phones and [ __ ] Nowadays you you like a couple people with a lot of computers and may maybe it's just >> problem is when you have that

everywhere, right? It's It's one thing if it's in one area and they they can do something else, right? >> Yeah. Now you have quants taking over that role, but it's another it happens in multiple places. >> Everywhere at least very quickly, yeah. I'm all like Yeah. And you've seen Elon talk about kind of you know the you'll have UBI. I think he that's a narrative he has to shill obviously because he needs to be glass half full to to really accomplish what he wants to do, but I'm pretty bearish on when all that plays out when when just like no you know people just can't become artists because they have nothing to do and and that's going to make them happy. Oh man, I I saw I've seen this video. Instagram is so bad for like AI slop these days, but I saw this

video and they were interviewing like Musk, Altman, Bezos and they're all kind of like these fat guys and it's like and then the theme of this is like you know when everybody lost their jobs, people started like not working, not being active, they didn't know what to do. Uh and so now we develop blah blah blah and it's like all these people really fit on bikes and they're just like powering >> [laughter] >> AI. It's like this is what the normal people are like looking at and thinking about, right? I got to jump.

Guys, sorry to relay to a call, but uh one thing I've been I got a I went to Egypt the other year and like Cairo there's like 23 million people in Cairo. And that's one thing I often think about when I'm when I'm like what are all the people going to do after AGI? I'm like what are they doing now in Cairo, you know? There's like 23 million people there. There's no real industry. There's no real like uh like big companies that that have headquarters there. And so it's like they're mostly doing like as far as I can tell like informal jobs and like selling on on stuff on the streets and and all this kind of stuff, but it seems though they just like work. People are people are living, you know.

Um, so I mean obviously you don't want the the the whole world to He's in New York. Yeah, how often do you go to Cairo? Yeah, the the New York's the New York slums. You think the New York slums are coming? >> [laughter] >> Everyone just pivots to tourism. I looked out my window trying to picture Cairo. >> [laughter] >> I got I'm not sure that'll fly over here. It's very hard to go back in standard of living. The Cairoization of the world. Yeah. But yeah guys, this is this is fun.

Yeah, we'll just wrap it in general. Yeah, this is a good episode. Um, I feel I don't know. I feel like we're a bit more optimistic. Uh, the Bitcoin was actually flat during this podcast. That's like a major win. Yeah, that might be the most bullish thing. Yeah, that's the most bullish. It might actually be up like 200 bucks. So. Uh, yeah, thanks everybody for joining. Uh, and we'll be back in a couple weeks. Hopefully with uh, 80K plus Bitcoin. Thanks everybody. Why so bearish? >> [music]