Is Bitcoin About to Shock Everyone in Q4? | Jordi Visser

The Pomp Podcast

Jordi Visser and the host dismantle traditional macro bearishness by arguing that the US economy has structurally shifted toward high-growth tech sectors, rendering interest

Key takeaways

• Visser argues nominal rates are normalized relative to ~6.5% nominal GDP growth, making traditional bearish macro narratives outdated compared to the post-GFC tech-driven economy.
• OpenAI and Anthropic's combined revenue this year will exceed total software industry revenue, though token costs are deflationary while usage is set to explode due to personal AI agents.

Main topics

• Macroeconomic shifts and interest rate dynamics
• AI model lab revenue vs. token consumption trends

Notable quotes

I actually think it's stupid.

Conclusion

The episode provides a data-driven case for why structural economic shifts and AI-driven agent proliferation are creating a

Transcript preview

Speaker 1 (0:00) I think most of what's driving crypto right now is a combination of new players coming in. This is what a bull market is about. And you're right. FOMO is going to start to kick in very, very soon. I said before, when Bitcoin got above 82,000, that was the confirmation of the bull trend. I think we're in that. The fundamental side is getting stronger and stronger by the day. I think we're at a point where this stuff is about to kind of take off, particularly with what happened today with the. Speaker 2 (0:26) What's going on, guys? Today, we've got a great conversation with Jordy Visser. In this one, we're going to talk about what's going on in the macro world. Why are people so fearful when the data actually says you should be bullish? What's going on in AI? Why is the rise of personal AI assistance very bullish for token consumption? Are the big model labs actually coming under pressure or not? Jordy and I disagree, and then we agree on a big topic that I think you're going to enjoy. And then we talk about crypto, public equities, and what he sees going on in people's portfolios, how the end of the year should go, where we're going next year. And maybe he even gives a little bit of alpha. something he calls the Micron Moment, which I think that all of you will be very interested in. Here's my latest conversation with Jordy Visser. Speaker 1 (1:02) All right, Jordy, it seems like every single person Speaker 2 (1:05) I talk to from the traditional world, they are freaking out about macro factors. They're saying interest rates are going up, oil's at 100, the 10-year keeps going higher. They are so worried that the big crash, the Michael Burry moment is coming. I don't get the sense that you agree. Speaker 1 (1:19) I actually think it's stupid. Speaker 2 (1:22) Podcast over. Speaker 1 (1:25) I mean, I've posted in X a bunch about this this week. I did a subscriber video and I had like 25 slides of why this is just... Add it to the list of Doomer stuff that comes out, tariffs and the war and oil's going to infinity and all of these things. So, this is the way the economy works. Speaker 1 (1:51) We have a very diverse economy in the US. We have a diverse stock market, theoretically. We have 500 names in the S &P 500. Rates mattered a lot before the Great Financial Crisis. They mattered a lot into the Great Financial Crisis because the economy was built on autos, housing. That's why we created things like the leading economic indicators. We have what's called Financial Conditions Index. Everything changed after the Great Financial Crisis. So the first thing about rates are, everyone's like, we're at 20-year highs for rates. Well, let's just go back to what that means. That means, by definition, rates just before the Great Financial Crisis. I'm not sure anyone got the memo, but to save us from the Great Financial Crisis, they had to move rates to zero. And then we stayed at zero for a long time to get us out of the problem. really what's happened to rates is they've normalized. Nominal GDP is 6 and change percent. Historically, 10-year rates should be 200 basis points above. Now, let's say it's about, that changed in 1997, so let's say it just goes to even. We're still cheap relative to nominal GDP. Now, that matters because GDP is growing at 6.5%. Theoretically, If you just take what that is, that means you'd have to have rates above it to where it would be difficult to make money if that's kind of how much money you can make investing-wise, or transaction-wise, business-wise. But that's not the case. So, with inside the S &P 500 are a lot of zombie companies. I mean, I hate to say it, but homebuilders don't make much money these days. Auto companies, Ford, GM. Is that stuff? Speaker 2 (3:31) just interest rate driven? Or do you think that is like a structural change in the market and home builders, as an example, are going to have a tough time for the next 20 years? Speaker 1 (3:41) I think home builders are gonna have a tough time forever. I think the economy is changing. I think demographics are changing. I think the way people view mobilization. Having the flexibility of moving from state to state, country to country, that's been a change with the younger generation for some time. The old, I go to college, I get a job, I buy a house after I, you know, I have kids, and then I stay there for 30, 40 years. That doesn't exist anymore. And so... We don't have enough housing in the country. So do I think there'll be more apartments and things like that? Yeah. Do I think Airbnb will be? Yeah, I think all of those things will happen. But to compare the economy, and this is the best way to do it, and this is what I'm including in this week's video. If you take the revenue for Micron and NVIDIA in 2015, so 11 years ago, and you compare that to Ford, GM and the home builders, you're talking about Ford, GM and the home builders being like. almost 20 times the size of the annual revenue for Micron and NVIDIA. And now you fast forward, Micron and NVIDIA alone have more than the home builders plus Ford and GM. But even worse than that. The expectations of revenue growth for the next year for Nvidia are almost the entire size of the revenue that will be generated. We just have a completely different economy. And so when people roll this stuff out, once it starts with, oh, every time this has happened over the past 50 years, X happens, this is not the same economy. And I'll just, as both being sports fans, they changed the rules in the NFL. You know, you used to be able to use stick them on your hands to, you know. grab, intercept the ball. You could hold on to someone you wouldn't let go. A lot of different rules. You can't touch anyone in the NFL anymore. You can't touch the quarterback. Is it fair to compare stats of the 1970s and 80s to today? Of course not. But somehow or another, macro people that are in their 50s that never touch AI, and that's my big beef, is that if you actually used AI and you saw where things were going, you actually saw the productivity games, you'd recognize that the economy's changed. So that's why whether it's oil, whether it's rates, It's not the same economy as before 2007, and that's because of the iPhone. Speaker 2 (5:53) Are Speaker 1 (5:54) you Speaker 2 (5:54) aware of any measurement that basically looks at sector-based dollar flows? So, like, you know, there's capital flows that people pay attention to macro in terms of liquidity cycles and things like that. But it's a very interesting way to think about, okay, how much aggregate dollars are going towards homebuilders and the revenue and profit that's growing there versus maybe some of these other sectors. And the reason I immediately am intrigued by that is it's not just that, oh, Micron and Nvidia were low and now they're high. It's that they're actually accelerating. And so if you look at this, not as a static thing, but a dynamic trend, they should pull away very aggressively here. And then the question becomes, okay, well, what are the sectors that are getting hammered? You mentioned housing and car manufacturing, but I don't know. I could probably think of very quickly 10 or 12. you know, different types of businesses that are all going to be in somewhat of a static, you know, kind of environment going forward. I mean, there's a huge opportunity to just take capital out of those sectors and rotate them over and almost indiscriminate of names. It is just literally where is the momentum and growth coming from? Speaker 2 (7:01) Like a buffet style approach. I don't think that buying things for less than their worth is ever gonna go out of style But just like buying quote unquote good, strong, cash flowing businesses feels like that type of value investor may have a tough time going forward. Speaker 1 (7:16) So let's go back to 2015. So the other thing that I did is and let's take it back to the iPhone. So when the iPhone, believe it or not, when the iPhone came out, remember, that was at the end of a seven year bear market in technology. So we had the dot-com bubble and it took seven years all the way into the great financial crisis to basically get back to where we were. At that time, technology was about 13 % of the S &P 500. And this is where your question on revenue. And so people understand you can have a lot of revenue in a sector, but if it's not growing, the S &P 500 is not going to value it. But S &P 500 does care about the revenues, but it cares about the growth. And right now, the S &P 500, if you take technology sector, which is going to include software and semis, you add in basically. companies like Netflix and Google and Meta and Amazon and Tesla because they're technology companies, but they're in other sectors. You're up to 56 % of the S &P 500 now, 5.6. So we've already hurt all of these others. This is what gets into the other thing people are talking about. So there's this new highs, new lows, and the breath, the breath is horrible. Okay, let's go through what this means. If seven companies are winning and the tech side is now 56%, whenever tech is dominating, these companies are out, the breath is going to be bad by definition. But if you move rates higher, tech is insensitive to rates. And this is the other mistake people are making. Now, the doomers will tell you that, oh my God, we need capital and this is borrowing money. And I've said repeatedly on everything I speak at, there is absolutely no sensitivity for rates. in the ai trade none you can move it up a lot if compute prices don't come down nvidia it just doesn't matter i mean i know it's hard for people to believe that but the reality is the margins for micron they just released earnings this week 87 there is so much margin in what anthropic does and what open ai does that they're selling compute at prices because people need it It's intelligence. It's incredible. They need it. Speaker 2 (9:30) I may disagree with some of this. Speaker 1 (9:31) Okay, well, let's finish the statement first. So when you look at new highs and new lows and everyone goes, look at all the new lows, you know what the new lows are in? Consumer staples. Utilities, real estate. You know what those names are? They're all interest rate sensitive. They have no benefit from the AI situation because AI is driving rates higher. It's hurting these groups and that's why they're trading at 52-week lows because who wants to own a consumer staples and a utility when they're basically just synthetic bond positions when bond rates are going higher. Speaker 2 (10:03) I agree that the rate sensitive businesses, 100 percent are under pressure, going to be under pressure until things change. Anyone who disagrees with that, I think that that's actually a agreement point between the like doomers and the AI folks is there's a certain part of the economy. If rates go up, they're going to get hurt on tech. The individual businesses, I agree. I do think, though, there is a connection between rates going up and the top in November of 2021. as an example. So the Fed comes out and says, hey, we are going to start raising rates. They don't do it till March of 22, but that pretty much marked the top. Go back to 2000 kind of bubble, right? Same thing. Rates, they kind of forecast, hey, we're going to raise rates. Market turns over. So in a weird way, it doesn't impact the actual businesses, but on an overall, like almost macro basis, when they say they're going to raise rates, usually that has marked some sort of top, which I think is what the doomers are kind of pulling back to. I think your point, it sounds like, is, well, rates are going up right now and the market is going up too, which kind of violates that viewpoint. So put that aside for one second. I went from anthropic open AI, et cetera, being the best businesses in the world, to now I think I'm in the camp of there's an increasing chance that they are going to be way underperformed what people think. And there are three data points I'd love your reaction to. First is token consumption per customer seems to have exploded, and now is starting to turn over in a number of things. We see this in the ramp AI index, spending is down. We also see this in a number of these kind of metrics that look at whether it's open router or whatever, that's coming down. We also know Grok recently released their latest model, and they showed a chart of performance and price. Everything is getting better performance, and price is coming down. So it looks like everything's kind of diving down and to the right. Well, if you take those two numbers, number of tokens processed times price of token, that is ultimately the revenue of the Model Labs. So talking to Dan Ives this week, and I said, look, if those two numbers are both coming down. Speaker 2 (12:08) Anthropic, like the latest charts are just kind of showing slight growth, but to like plateau revenue. And so as businesses realize, like, maybe we need to own more of this ourselves and not just outsource everything to these two companies, it feels like there's some pressure there. Now, the overall market is growing. Maybe there's, like, breadth in AI where, like, the revenue flows. But could there be weakness in the model labs and maybe some pressure of them actually getting public, yet the AI trade more broadly continues? And so, like, you're almost getting, like, a reallocation of where