现在该重新买入加密资产了吗？

I think 2 things happened. First, Treasury Secretary Scott Bessent intervened in the currency markets with the yen to try to keep rates low, and there was also intervention on SPY. Gold peaked when Kevin Warsh was nominated to be FOMC chairman. So, that was the peak. Bessent intervened; this was the bottom, and commodities in general—which we know are sensitive to inflation—started to rise.

This includes gold, silver, copper, gold and copper mining companies, and digital assets. Then there were Trump's comments about Bitcoin about a week ago, and that helped accelerate its growth significantly. Against this background, everyone found themselves in the wrong positions. Proponents of the 4-year cycle were also wrong. This created a short squeeze that accelerated the dynamics. This is what created the current situation.

I'm DeFi Dad. Today on the show is Ram Ahluwalia, founder of Lumida. Ram, thank you for joining us. How are you?

I'm doing great. Thank you both for inviting me. I'm looking forward to it.

Ram, it's great that you're here. I've been following you for a while now and reading Lumida. I think I even signed my father up for your Sunday newsletter. I try not to miss it.

Today, we want to use your experience to discuss many different things. First, we want to introduce you and tell our listeners about your background. We want to talk about this crazy movement in crypto. I think people have been lulled to sleep and forgotten what this beast is really capable of.

1. Ram’s background on Wall Street

We want to talk about the Bessent shenanigans and Druckenmiller's recent article on AI, what's happening with AI capital spending right now, and, more broadly, the macroeconomic picture we find ourselves in. Maybe we can start with a little bit of your biography. I don't know if our listeners know much about you, so just give us a quick background on who you are, Ram.

Of course. I grew up as an investor and a builder. I spent 20 years on Wall Street, first at Merrill Lynch and then at Bank of America, and I developed an approach to different asset classes. It all started with banking, lending, and loans: How does this mechanism work?

After the 2008 crisis, when everything in the world exploded, I started buying those same subprime securitizations from those movies. That's how I was introduced to investing, which goes against conventional wisdom. Then I created a small startup and sold it to Cross River, an infrastructure fintech bank. I built a crypto destination in Cross River. Our clients were companies like Coinbase and Stripe because I believed in the idea of decentralized technology and self-sovereignty.

Through that, I saw many different asset classes, and you begin to understand how they interact with each other.

2. What is Lumida?

Why don't we talk about Lumida? I want to discuss broader market topics with you, but what you're building is clearly related to the main trends of integrating AI into finance, whether it's DeFi or traditional finance. Tell us more about what you're building there.

Of course. When I left Cross River, I started interviewing wealth managers and saying, “I'm interested in investing. I want access to deals. I don't want a 60/40 portfolio. I don't want formulaic solutions. I don't want conflicts of interest.”

I also have a tax problem. Help minimize capital gains tax. Help minimize income tax. Help structure this properly for my family. There were also trusts and inheritances. How am I supposed to think about all this? It's just one big math problem. So how do you put it all together into a coherent system? That's exactly what Lumida did.

We support owners and creators. This is the era of creators, especially with the advent of AI. We live by what we do. We do what we live for. We have an AI application called Lumida Invest. You can find it at lumidainvest.com. It's available in the App Store or on Android.

You can enter any ticker. There's a crypto page there. This is a very powerful analytical system with real-time news. You can track your portfolio, and there's real-time research in the feed. So, yes, Lumida is an investment in the future. We are techno-optimists, and we use technology to disrupt traditional wealth management.

3. Why Is crypto pumping right now?

I want to move on to this crazy crypto movement that we're all seeing. What do you think is going on under the hood, Ram? Why are markets growing so rapidly? We see Bitcoin ripping, ETH ripping, HYPE ripping. In general, any assets that have, I believe, real fundamental value have risen rapidly. What's your opinion on what we're currently seeing in the crypto market?

I'll say it right away: I hold long positions in Hyperliquid assets. Apparently, the entire crypto market is on the rise right now.

I think 2 things happened. First, Treasury Secretary Scott Bessent intervened in the currency markets with the yen to try to keep rates low, and you also got that intervention through reverse repos. Gold peaked when Kevin Warsh was nominated to be FOMC chairman. So, that was the peak. Bessent stepped in; that was the bottom, and commodities in general, which we know are sensitive to inflation, started to rise.

This includes gold, silver, copper, gold and copper mining companies, and digital assets. Then there were Trump's comments about Bitcoin about a week ago, and this helped give it powerful acceleration. Against this background, it turned out that all the players were on the wrong side of the market. Proponents of the 4-year cycle were also on the wrong side. This created a short squeeze that accelerated the dynamics. This is what created the current situation.

Gensler, it's time for me to go. Gensler left, but the new SEC chairman took action when Congress failed to do so. So, it created structure in the absence of a law providing clarity. This was another impetus that helped dramatically change these assets.

Perhaps the last thing on the contrarian side is that Saylor sold at the very bottom. There's always a “body” popping up somewhere. When Leia pulled Ash and Brenner received a margin call from the banks, it was the bottom for semiconductors.

There must be some sacrifice. Saylor became this bloody victim when he sold Bitcoin at the bottom. You can't come up with anything special. So, this fits into the big picture.

4. Did the bear market bottom earlier than expected?

Ram, it seems like you're saying the market has bottomed out. I'm curious because there was a consensus that, just a few weeks ago, we should go lower. There was that classic prediction that the market would bottom out well below where we were.

But given the recent bull market, I think we're moving forward in the cycle in terms of expectations for Bitcoin to reach new highs and for other correlated assets in the market to do the same. What do you think about this? Is it logical to assume that the bottom was reached earlier? Is this like a shorter bear market?

This is a great question. One of the very constructive observations is that the consensus was that Bitcoin would bottom at $40,000. I remember the Strait of Hormuz conflict. The consensus back then was that the S&P would fall 400 points lower than it actually did.

Markets love to catch people off guard and then force them to catch up. This has exactly those signs. There's a lot of short covering here, which does not cancel the rally. Any bottom actually starts with short covering.

The market pulse is strong. Isn't that right? We see that volumes are starting to taper off, so it's worth keeping an eye on, but there's strong evidence of a bottom forming. When everyone comes back, you'll see more volatility. You'll see another pullback. But this is impressive momentum.

Bitcoin is a momentum asset. When it accelerates, it continues to move, unlike many other assets that are characterized by mean reversion. The month-ahead statistics for these kinds of Bitcoin moves are constructive.

What other factors show the best results, and what shows the worst?

It all started with these macroeconomic triggers. So, the behavior of these politicians still matters.

5. Can ETH outperform this cycle?

So, besides Bitcoin, the second-largest crypto asset in the world is ETH. It seems like there are some positive factors, like Tom Lee, Bitmain, and also Sharp Link. If you look at the ETH-to-Bitcoin ratio, it is finally starting to show an upward trend. In any case, do you see a reversal in sentiment? Do you think ETH will be able to consistently outperform this cycle?

Yes, ETH is riding the same market wave as Bitcoin right now, just like any other asset. This is a first-approximation view of the situation, and it is largely short-covering. People are on the wrong side and are trying to get in, which creates momentum that attracts more buyers and, in turn, puts pressure on the shorts.

This dynamic continues until the short positions are closed and they say, “Dude, I’m getting out. I can’t take this pain anymore.” This is what happens every time. So, have we reached this point yet? Look at the liquidations. I will monitor the liquidations.

I’m currently on one of those sites, CoinMarketCap. Liquidations for these crypto assets still remain high. They are starting to approach the level of extreme greed, but we are not there yet.

Sustainability is a more complicated issue, isn’t it?

This is a tactical rally. This is a tactical move because people are at a disadvantage. They are trying to take a stand, right? Therefore, sustainable growth requires true product innovation, regulatory clarity, and the implementation of on-chain solutions.

I think the issue of stability is still open, as a lot of competition has emerged, like Canton Network. The Wall Street banks are already here. They adopt technology, and they have distribution channels.

I think a lot of the tokenization efforts that I’ve been talking about for years—as a big proponent of tokenization, explaining how Ethereum and DeFi are a good fit for that—target the world’s most liquid and competitive markets, such as U.S. securities. U.S. equity markets are the most efficient in the world. They trade in fractions of a cent there.

I think that’s part of the deal, too. This is more of a rally to the mean than an innovation that can deliver sustainable growth in the long term. I would like to see more innovation for this, but I don’t see it yet.

6. Everyone’s offsides in this market, even the bulls

Your comments about people being on the wrong side of the market are obviously manifested through massive short squeezes and market sentiment. This reminds me of a case where a Cointelegraph intern—I don’t know if you remember—posted right before the Bitcoin ETF was going to be approved. This Cointelegraph intern’s account wrote something like, “Oh, it’s been approved.”

But it really wasn’t, and it caused a massive pump. It showed how unprepared the market was for the approval of a Bitcoin ETF. Last week was very much like that. There was this confusion in the market—like, “Oh, okay.” People forgot what Will Clemente was talking about regarding the testosterone levels in this market and the animal instincts coming back so quickly.

You can rewind 3 weeks or a month, and there was this complete pessimism and hopelessness in this space. Everyone was saying it was the end, and then everything changed in an instant. Nobody has enough assets, even if you’re optimistic. That’s how unprepared you are, because if you’re a fan of 4-year cycles or seasonality, you’re wrong, too.

7. Why Ram’s bullish on HYPE and DeFi

So even the longs aren’t ready, right? Nobody has as many assets as they want to have. So, yes, that’s what’s happening right now. With that in mind, would you advise your Lumida readers to look at cryptocurrency again? I’m curious what you believe in the most. You mentioned Hyperliquid, but what other areas or specific projects, if any, are you interested in?

I like Hyperliquid. It’s the clearest tool in this category because there’s a fundamental basis: the buybacks. Second, there’s their deal with Circle and Coinbase. Third, there are strategic partners in this category, including equity investments. Fourth, their trading platform has product-market fit in this ecosystem. Fifth, they’re leaders in their field.

Those are the characteristics to look for. I don’t think the world fully understands Hyperliquid, so I think it’s the purer tool in this category.

I’m a big believer in decentralized money creating accountability for governments. I believe in the concept of DeFi, which is the ability to transfer funds without intermediaries. These are big concepts. On a civilizational level, it is the ability to have trustless intermediation.

The problem is that the CLARITY Act doesn’t create the conditions for that, and that would benefit protocols like Ethereum. Hyperliquid benefits from the current conditions, so it fits more criteria than other assets, to me.

8. Uncertainty about what follows if CLARITY passes

Why wouldn’t Ethereum benefit from the CLARITY Act? When I look at the volume of stablecoins operating on the Ethereum network, it seems like there’s validation of that choice. Revolut is launching a stablecoin backed by the euro and has announced that it will do so on Ethereum. I understand that other banks have done pilots on other blockchains, like Solana, but the lion’s share is still on Ethereum.

Yes, that’s fair. Last summer, I wrote that the best way to bet on stablecoin adoption is on Ethereum, because that’s where they are. Both Ethereum and Solana would benefit from the CLARITY Act’s clarity, unlike Bitcoin.

So decentralized money will not benefit from any regulation of, say, security tokens.

That’s true. But we still have to wait until that happens, and even then, there’s still a lot to come, right? The SEC is no longer taking unwarranted legal action against entrepreneurs in this category.

The CLARITY Act won’t change the fact that more implementation is needed. There’s a need for utility. There’s also a need for less competition. We’re seeing all these first- and second-tier blockchains proliferating and competing for attention, so it’s just more complicated.

That’s the history of capitalism. Profitable niches and new innovations attract competition. When the Wright brothers invented the airplane in 1905, we Americans already had McDonnell Douglas in 1917 during World War I. They weren’t built by the Wright brothers. They were built by competitors who took advantage of the opportunity.

You see similar dynamics here, too. The assets that have had the best returns over the last 10 years rarely, if ever, do that again in the next 10 years. Those are extremely rare. The way I see it is that if we see a change in other things in the market, I will certainly reconsider my view.

9. Pros and cons of BTC as a momentum trade

Ram, given the idea that assets that have outperformed expectations over the last 10 years rarely do that in the next 10, does that make you a bear on Bitcoin? You’re not playing for Bitcoin to go up? You wouldn’t advise Bitcoin to clients?

It’s a tradable asset right now. It’s more about trading, right? The trend right now is up, just to be clear. The trend is up. The momentum is there. Hold the asset as long as the trend holds.

Someone might ask, “How do you define a trend?” It could be a 14-day moving average. It could be a 21-day moving average. As long as you’re on the right side of that trend, you’ve got everything. It’s going to be okay.

You might experience some volatility during market noise, but overall, you’ll be on the right side of the trend. If you want less risk of false positives, you can use a longer time frame. That’s the right approach.

There are some very valid questions about Bitcoin, such as quantum computing. That’s a very valid point. We may not have seen the most valuable digital currency yet. It could be a quantum digital currency that we can’t even imagine yet.

The other part is that stablecoins are creating competition for Bitcoin as a store of value. People are accepting payments in Tether for international transactions. Tether is infiltrating the U.S. banking system. It has found a way to get regulators to understand this asset. They just finished their audits.

That makes it more complicated. Bitcoin also didn’t live up to the returns that were promised in the previous cycle, compared to other Bitcoin cycles. You have an opportunity cost because of that.

People say, “Wow, if I want a momentum asset, I compare it to, say, Nvidia, right? Or the S&P, the QQQ, or semiconductors.” Momentum assets are like LeBron James, right? They have to put up a triple-double every night. Otherwise, you have to find a new player.

The general manager will say, “If you’re not averaging a triple-double, you’re overpaying, and you have to find another asset.” That’s the blessing and the curse of a momentum asset.

Ram, to wrap up this part of the conversation, I want to ask about something that matters to your trades or investments: how long do you hold these assets on average? It sounds like you’re trading momentum assets like Bitcoin, and you would probably hold Ether if it were in a steady uptrend, like you described.

I’ve been holding Hyperliquid for a few months now. We sold some, and then, by a lucky coincidence, we came back a week before Bessent came out and started doing interviews, which was great. But we didn’t have any digital-currency investments before that.

We got out of the position when Bitcoin dropped below $100,000. But I have autonomous miners that use this gas, put it through turbines and mine Bitcoin for $30,000 to $40,000, and the cheapest power producers there are cheaper than, say, Irons Power in Colorado.

So I have market exposure because of that. That’s my whole stake in that space. That was my approach to positioning in Bitcoin. It’s what you should have done in 2022. In 2022, miners were cheap.

This is a different type of miner that I work with through New West Data. They’re in Alberta, Canada. They operate on the Crusoe model, if you remember the first-generation Crusoe model before they switched to AI.

They partner with well owners who have excess natural gas, and it’s illegal to burn it in Canada. It’s not like Texas; it’s not like Landman, if you’ve seen that show. They put turbines in there. These turbines generate energy by burning natural gas, and they power these Bitcoin miners. So I still have access to the market because of that, and I like the concept because I’m getting in at a lower base price compared to the market spot price.

Yeah, I really like that. I haven’t heard of many miners mining Bitcoin at that price. The $30,000 to $40,000 range sounds incredible to me.

Well, energy. It’s natural gas that has no other purpose because there’s no infrastructure to transport it. You can’t ship it, you can’t condense it, and you can’t load it on a truck. So the wells are shutting in, and that’s the only use that gas can have. Now, the actual real cost is the maintenance and operation of the generators, as well as the expected economic depreciation of the generators. So there are some costs. But the energy costs are low because it’s essentially unused natural gas.

10. Bessent’s bond market intervention and its impact

I love this topic. It’s a great topic. I’ve put a lot of my capital into this, so I’m always implicitly “long” Bitcoin because of something like that. I want to change the subject a little bit. You mentioned Bessent’s intervention a little bit earlier, and I want to dig into that because his last remarks reminded me of Neel Kashkari’s famous 60 Minutes interview, where he said that we have unlimited money in the Federal Reserve.

Then everyone criticized Janet Yellen for some of the things she did in the bond market. It seems like Bessent figured out that he had to do it and then speed it up. And then we have this article by Stanley Druckenmiller on artificial intelligence, and it looks like he’s criticizing his former protégé. It seems to me like it’s some kind of good-cop-versus-bad-cop game between Warsh, Druckenmiller, and Bessent. I don’t know if that’s true, but I wonder—you must be following this a lot more than I am. What do you think about what’s going on and what Bessent is doing? Is he between a rock and a hard place right now?

I think your introductory review was absolutely spot on. The criticism of Janet Yellen was about the way she financed the U.S. government with short-term Treasury bills. She didn’t take the opportunity to change the maturity of the debt when long-term rates were at 1% or 1.5%, even though she should have. That criticism is absolutely valid. If you can borrow at 1.5%, you should. You should have 50-year or 100-year bonds.

So Bessent is now funded by short rates, and that means that Warsh needs to be on the same team with him. They need to build trust in the bond market. Scott Bessent is the top bond seller in the country. He’s the best bond and sovereign-debt seller the world has ever known. That’s his mission.

The lack of alignment between Warsh, Bessent, and Druckenmiller is surprising, given all the relationships you mentioned, because they’re Druckenmiller protégés, right? Warsh said he wants to see the market react to economic data, not have the FOMC interpret that data and then force the market to react. I like that. I really like that approach. He also wants to add accountability to the Federal Reserve. I really like that, too.

But the problem is that Bessent doesn’t take that approach. There’s a mismatch between Warsh’s stated approach and the actions of Bessent, who is now intervening in the market. Bessent’s intervention didn’t make much sense to me either. And I—look, I was, maybe I am, I don’t know, a fan of Bessent. He’s a very capable, thoughtful, strategic thinker.

But the market didn’t need that. We looked at rate-sensitive assets like developers, utilities, and solar. They’re all rate-sensitive. When the 10-year goes up, they go down. When the 10-year goes down, they go up. And they stopped going down with a small movement in the 10-year. So we said, “Oh, that’s interesting. The market has already priced in the rate hike. These assets are cheap.” The market didn’t need the bailout.

If you look at the 2008 crisis, I was literally living on Wall Street at the time. I worked at Merrill, one of the centers of that crisis. One of the mistakes the federal government made was the way it communicated to the markets; it didn’t instill confidence. These interventions probably actually caused a decline in confidence. A mismatch between 2 or 3 of them is not a good thing.

11. Expectations for Warsh’s Jackson Hole speech

So, Ram, I’ll get back to what I really want to ask you about. I have a lot of leveraged assets in my portfolio right now, and the Jackson Hole summit is coming up. I’m wondering: Is what Warsh is going to say going to blow me away? Should I get rid of these positions? Should I hold them? I’m not asking you to give me financial advice, but maybe, in general, do you have any expectations about what might come out of this Jackson Hole summit after what we’ve seen in the media? What are some things that you’ll be looking at to guide us?

This is a significant event. As Kevin Warsh brings together the world’s central bankers at Jackson Hole, he’s going to lay out his approach. I expect he’s going to repeat what he said at his first FOMC conference. You’re going to hear a lot about task forces for this or that. That’s the first. You’re also going to hear less about the Fed trying to interpret market data. Let the markets interpret it. That’s the second.

Third, he’s probably going to say that AI is leading to productivity gains, so the Fed doesn’t need to be as aggressive. At the same time, fourth, he’s going to say that the Fed has been on guard while inflation has been higher for a long time and has been above target for more than 5 years. So those last 2 points are the balancing act that Warsh has to do.

Right? He’s saying, “Hey, I’m tough on inflation.” What’s important is that it provides lower bond yields. But the market doesn’t believe it. That’s why 10-year bonds have high yields. The market says to Warsh, “Warsh, we see that this is nonsense. You’re not going to cut—you’re not going to tighten policy to suppress inflation.” So we’ll see what he does.

Usually, macroeconomic days—I would call this one of those days—are usually bullish. Like the nonfarm payrolls event, they’re usually bullish because people are risk-off the day before. People are afraid of what they’re going to say; their amygdala is reacting, and they’re trying to get risk assets out of the game. But I wouldn’t base a position on assumptions about what he’s going to say or not say. It could be like an FOMC meeting day, which, as you all know, has a lot of volatility. So prices are going to go up and down, pretty much both ways, to confuse everybody.

12. How could markets respond to Warsh

So, Ram, if we were to translate the possible outcomes into how they might affect risk assets like ETH, Bitcoin, and the hype assets, and the currency hedges—which are maybe Bitcoin, some other crypto assets that we hold, and gold—what do you think about that? I’m trying to figure out if Warsh is going to raise rates by the end of the year, and whether that’s going to be seen as a positive or a negative by the market.

Could Warsh unexpectedly raise rates at some point, or could he unexpectedly lower them? Anyway, I’m trying to figure out: How is the market going to perceive this in general for our risk assets?

Great question. I don’t expect Warsh to raise rates. I don’t expect Warsh to cut rates. He can’t. With the 10-year at 4.7%, and with the risk of it going up to 5%, he can’t. If he cuts rates, the 10-year will fall and the cost of borrowing will go up. Right? So he’s not going to—I think he’s going to stay put.

This is a great chart to analyze. This is SPY versus gold, the S&P 500 versus gold. You can see here that gold peaked earlier this year and was in bull mode until Bessent intervened in the market, and since then, commodities have been outperforming the S&P 500. Got it? That’s silver, that’s gold. Of course, oil has been part of that as well. So I would advise you to keep an eye on that.

Isn’t that right? That’s probably what Druckenmiller does, right? He’s looking at 300 charts until 5 o’clock in the morning. The key relationship I would like to look at is between commodities and the stock indexes. Right now, I think you should be increasing the proportion of commodities in your portfolio, given what we’re seeing. Wait until the market tells you to change your positioning.

13. Why the AI CapEx bears are wrong

Ram, maybe we’ll touch on the AI capex cycle as well. As I mentioned at the beginning, I read the Sunday newsletter. You, like me, have been tracking this whole thing extremely well. You also mentioned that poor Leopold was a victim of Canaan Citadel. But that deal seemed to get a little bit screwed up, so where are we now on this? Are we in a multiyear phase, and this is just a short-term deviation? What are your thoughts on where we are now?

Yes, great question. Give me a minute to open the notes where it says that. In terms of the hyperscaler trends and AI capex, we still have many years to go. We still have many years of growth ahead of us.

I wrote this newsletter—thanks for the reminder—on June 21 of this year. I said that Nvidia and Microsoft this year are like Google last year. Google was an undervalued, high-quality asset. Microsoft was 40% cheaper then than it is now, and Nvidia was probably around $190.

Nvidia reported today, and the stock is up 7%. So the answer is yes. It’s a multistage trend. It’s a classic “wall of worry.” I love it—walls of worry. I like to be optimistic against the grain. It’s the best.

What do I mean? People are worried that everything is falling apart. They’re talking about the cyclicality of funding, whether capital spending is stable, and whether Microsoft or Nvidia only have 2 or 3 customers. And isn’t that just a bubble?

After Nvidia’s report, its P/E ratio today is 18. That’s cheaper than the S&P 500. It’s not a bubble. Analysts are now raising their revenue growth forecasts from 40% to 70%. Here’s another fact: Meta is building data centers in Louisiana that are the size of 1,700 football fields. Those data centers will have chips—a lot of chips.

This is one of those obvious trends to get ahead of. And that’s where people get it wrong. It’s true that Microsoft, Nvidia, Amazon, and Google have big concentration risks in cutting-edge labs like Anthropic, OpenAI, and xAI. But each of them represents millions of customers and end-user demand.

Ramp, which has transaction data from millions of small businesses, showed that 40% of its customers are using AI tools like Claude Cowork. This is a real end-market implementation. So I’m grateful that we can buy these assets that others think are in a bubble, but they’re not. That’s when you should be buying.

Nvidia is one of my top picks, as is Taiwan Semiconductor. And there are others, like Western Digital. That’s another take on the AI story, right?

In 2023, we saw the ChatGPT moment. It was pretty cool. We got a chatbot. It was amazing. It was a “wow” moment, like the browser. Then Claude Cowork came along.

The difference is that Claude Cowork can do the work. It can create the work materials. It can help reduce your legal fees. It can prepare a presentation. It can write an investment note. It can give you a stock description. It can create descriptions of job openings. It can check resumes.

It’s a much bigger impact on productivity than GPT—a much bigger impact. That’s why Anthropic has outpaced OpenAI in revenue and growth. You see? That’s why they’re worth more. They’re going public at a potential valuation of $2 trillion.

The third thing we have now is Grokbot. Grokbot works like Claude, but it’s continuous and autonomous. It’s always listening and ready to respond. That’s another level up. Now you have a workforce that’s always active and never sleeping.

Most of what we’ve seen so far has been at the infrastructure level: APIs, compute power, and semiconductors. Now, this month, we’re really moving into the application level. Today we announced a startup called Instinct that raised $350 million at a valuation of several billion. It’s a personal AI assistant.

Google Spark is testing a personal AI assistant right now. Most of us don’t have one yet. It’s incredible. These applications will ignite the curiosity and imagination of consumers and small businesses, which will drive even more adoption.

These are exciting times. We’re 3 years into this, and people are worried about the bubble. There are capacity constraints. Taiwan Semiconductor won’t be able to produce enough GPUs fast enough. There are also resource constraints that prevent the bubble from forming. So it’s not going to be a cakewalk or a simple success.

Oh my God. Honestly, everything you just said is so much information. I’m going to have to listen to it again later and watch this podcast myself. But yes, there were a lot of valuable insights there, and I think you were right about Nvidia’s recent earnings report, where the P/E ratio is about 18.

That’s low for such a cutting-edge technology giant, and it’s lower than the S&P 500, which is a funny statistic. I feel like it really underscores that the stock is relatively cheap right now.

I think there’s still a huge gap between the users of this AI technology and the nonusers. A lot of people who could be power users are saying, “I’m still using the free version.” They haven’t even dug deep enough to see what these tools can actually do.

I personally think that only a very small percentage of people know what this technology can do. So there’s also a certain divide in general opinion. It’s like, “Hey, have you even tried using this?” You know what I mean?

Even DeFi Dad, I think we’re pretty active in this, but we’re still not where we want to be. Maybe with technology, it’s always going to feel that way, but I feel that way. I feel that way, and we’re trying to test everything that comes out.

I saw a Grok video on YouTube. How do we get involved? You’re right: I think we need more adoption. The revenue growth in this space is just astronomical. They’re talking about $90 billion in revenue between OpenAI and Anthropic, and it’s growing. So adoption is growing.

I also mentioned the Ramp stats. Here’s another interesting fact: there’s more money being spent on GLPs now than on AI. So you’re right—the adoption could be even better. But GLP-1s, like peptides, also extend life. There’s never been a better time to be alive than now. It’s extraordinary.

Consumer confidence numbers are down, while the S&P is at the 99th percentile for earnings growth. Expected earnings growth is 25% year over year. The question is, can hyperscalers keep spending?

The answer is yes, because they are getting a return on capital. Google’s earnings are up 80% year over year. Why are they growing so much? Because a year or 2 ago, they made a decision to invest in capital expenditures. They said, “We’re going to give up free cash flow today. We’re going to give it to Nvidia, Broadcom, TSM, and the entire supply chain in exchange for future free cash flow.”

14. Nvidia is the lender of last resort

They said, “I’m going to spend this now to get a lot more in the future.” We’re seeing a return on that initial investment. I expect that to continue, because who wouldn’t pay $5,000 a year for a personal assistant that actually works? Of course people will pay.

Ram, another thing I’ve seen—maybe it was you, or it was something you quoted from Gavin Baker—is Nvidia being called the “Federal Reserve of AI.” I thought that was a very apt phrase, and I’m wondering if you can elaborate on the role Nvidia plays in the market as a powerful force.

Gavin Baker called them the Federal Reserve 3 days later. Gavin Baker is great. He’s fantastic. This may be the only time I’ve ever been ahead of him by a few days.

Here’s the story of Nvidia: 75% profitability. Why? Because they provide so much value and can dictate the price. According to Jensen, the total cost of ownership of Nvidia chipsets is so good that even if a competitor were giving away its chips for free, it would be better to use Nvidia.

This concept of total cost of ownership is important. Total cost includes the cost of connectivity that goes through the data centers, the cost of performance, training, and inference. Inference performance per gigawatt is actually the main metric.

The idea of the lender of last resort is this: Nvidia has such a strong balance sheet because of its market position. It’s in a unique position to underwrite and provide lines of credit to hyperscalers that are trying to build data centers.

If you’re going to build a data center, it’s going to take a lot of money. You can finance it with equity or debt. Hyperscalers want to avoid dilution as much as possible. Google issued stock and bonds. Amazon also issued stock and bonds. They all do that.

Nvidia says, “Hey, I can provide a line of credit with some of the world’s largest private equity firms, like Blackstone.” Blackstone is no joke. They know what they’re doing. They know how to assess risk. They know the amortization schedules of GPUs.

They’re using their balance sheet to put more capital into that category. They can do that because they have free cash flow. What are they going to do with that free cash flow? They’re not going to buy Treasury bonds that barely cover inflation. They’re doing that by providing senior credit financing.

They’re not taking on the first-loss risk. They’re enabling other firms to buy Nvidia products, which is like seller financing, right? When Boeing sells an airplane, it offers seller financing because it’s hard to buy a big Boeing 777. They say, “You can pay me over 10 years.”

Nvidia is doing the same thing and making money both ways: on the contract and then on the financing. It’s just good business. These are not bogus deals. They’re a reflection of Nvidia’s market position and market power.

15. Would Ram rather invest in AI or crypto right now?

Ram, there was this tweet a few years ago. It seems to be from Jason Calacanis, if I’m pronouncing his name correctly, from the All-In podcast or The Investor. He tweeted something like, “If you’re in crypto, you should go into AI.”

Now we’re starting to see a return to digital assets. It seems like we have a complete tailwind right now. But that doesn’t mean that AI has to disappear for crypto or digital assets to win.

You’re pretty much in both camps as an investor, I think. Do you think one should be prioritized for ownership? Do you think you should be more aggressive in AI or in crypto?

That’s a great question. With crypto, my take is: if there’s a trend, stay in the trend. The trend is your friend. That’s it. Pretty simple, right?

Between the two, I would prioritize AI. It’s a transformative force. We’re still in the early stages of adoption, and there’s a capital investment cycle that’s going to last a few years. A lot of the assets are priced pretty attractively.

It’s not just Nvidia. There’s Taiwan Semiconductor, Western Digital, and lots of ways to make money from it.

So I think it’s worth putting financial and human capital into AI: learning the technology, getting into AI companies and related companies, repurposing small businesses for AI, or using agents. I think it’s 1997. That’s what I would focus on. We’re on the cusp of renting intelligence on demand. There’s not much that can match that in terms of getting work done and achieving specific goals, right?

The best elixir for the economy is productivity growth. We’ll see it in surplus. We’re already seeing productivity gains. So if you’re a creator, if you’re an owner, and you can re-engineer yourself or your processes around AI, the world is yours. These big, unwieldy bureaucracies can’t implement AI as quickly as small teams.

16. The pitch for Lumida

Ram, I think it would be unfair not to learn a little bit more about Lumida. I think what I’m asking is right at the intersection of your interests. Maybe you can tell us a little bit more about how investors can use Lumida, who your typical clients are, or just give a quick presentation for those who are interested.

Lumida is an SEC-registered investment adviser. We work with creators and business owners. Sometimes they only have a couple million dollars. Sometimes they’re founders who are out of business or getting ready to sell. Sometimes they're contractors in small construction businesses. If you look at our investor page, you'll see some of our clients. Among them are investors in the Ethereum ICO who have significant wealth. 12-figure wealth. We give them a kind of roadmap. We call ourselves wealth architects.

We sit down with the client and ask, “What are your goals? What are you trying to achieve? Are you saving for retirement? Are you planning for your kids’ education? What is your risk tolerance? What is your time horizon? What is your liquidity need?” Then we go back and decide what asset allocation makes sense. It’s an allocation across different asset classes, which includes stocks. It could also be alternative assets. It could be income strategies.

Then we combine that with the right trust, tax, and asset structure. That way, you keep more of what you’ve earned and invested, because at the end of the day, you can only live on your after-tax income. So, yeah, we really like that. We have board members who are on the boards of directors of companies like SoFi, Coinbase, and Circle.

I’m a serial entrepreneur myself. I use what I recommend to others. We have an app called Lumida Invest, designed for the self-employed investor who needs more tools, analytics, research, portfolio reports, and ideas to track hedge fund activity, see what politicians are buying or selling, and see what’s trending.

We also provide access to exclusive deals. We went into Travis Kalanick’s Atoms, which is a very coveted deal, the first institutional round of the Uber founder. We invested in Shield AI, which is drone technology for autonomous systems. Drones are essentially the future of defense. You need autonomous artificial intelligence to control them. We invested in that.

We invested in Kraken at a valuation of $12 billion, before Citadel came in at $23 billion. We invested in CoreWeave when it was a private company at a $7 billion valuation. We try to find themes that we like at an attractive price point, where we see a path to an IPO so we can get in early and ride that wave, because a lot of the wealth is created in the private markets.

When they go public, you have companies like SpaceX, right? So that’s what we do. We do modern wealth management. That’s how I like to think about it.

17. Opportunity to tokenize private investments

Before we let you go, do you see a path to tokenizing private equity quickly? I think Robinhood has been pushing the idea that they’re going to have a product like that soon, and all these interesting investments that you’ve mentioned make me wonder: How soon are we going to get there? Anyway, what do you think about tokenizing private equity?

Tokenized private equity is one of the most promising areas of tokenization. If you’re a digital-asset entrepreneur, this is a category to focus on. It’s a great set of opportunities. Helping local banks syndicate loans to communities so that Americans can access better financing, both equity and loans, is a great opportunity for tokenization.

Another area is pre-IPO investing. The private venture capital markets are huge. Adam is raising $1.7 billion privately in 30 days. 15 years ago, that would have been an IPO. All of that needs to be tokenized because when you invest in these private companies, there’s a chain of descent to the capitalization of the company. So, the company, then the venture capital, then the SPV, and you need trust guarantees on all of that.

I think all of that is great. Another strategy is direct lending, creating a tokenized shell so that you can receive income that goes into your brokerage account. These are all fantastic ideas for tokenization.

18. Closing

Well, Ram, I think this is a great time to start wrapping up. Thank you so much for stopping by. It’s a very timely conversation, given everything that’s going on in the markets. So much has changed. Just a few weeks ago, I was wearing a polo, and now I’m wearing a Hawaiian shirt because we’re probably back in bull-market mode.

Ram, thank you so much for your time. It’s been a pleasure talking to you, and I really appreciate what you’re building here with Lumida. Do you have any closing words before we wrap up?

Thank you. Listen, there’s never been a better time to be alive. The only time better than today is tomorrow. So, yes, carpe diem, seize the moment, take action, implement AI, and let’s enjoy the process.