市场动态：Anthropic S-1、市场筑底，接下来会怎样？

Anthropic’s S-1 shows they have a surprising amount of cash: $132 billion sitting on their balance sheet. Compare that with their reported forward compute commitments of more than half a trillion dollars. They kind of have to keep growing exponentially, or they die—or they get bailed out. Probably the latter.

1. Why The Market Bottomed On The S-1

Good afternoon, everybody. Good afternoon, Jonah.

Good afternoon, Avi. Good morning from L.A.

It is so good to finally be back in New York. We’re not in the office yet; we’re at home, and this is a first step toward coming back to normal life. The last month has been totally nuts, from Singapore TOKEN2049 to Erbil, Iraq, where I found that there are actually other Jews there. A couple of them reached out to me after that post. It’s kind of interesting.

I didn’t realize there was still a community. I thought they’d all moved to Los Angeles and set up various money-lending businesses here, as well as The Coffee Bean & Tea Leaf. That chain was started by an Iraqi Jew.

Yeah. A lot of them also ended up moving to Israel and voting for far-right candidates like Ben-Gvir. That’s kind of their bread and butter, because they’re Mizrahi Jews. They tend to be the nuttiest ones because they lived in countries that kicked them out, and then they had to fight those countries. That really radicalized them.

Well, that is the way the world works. You hate the people you know the best.

Why do I hate you so much, Jonah?

Damn you, Avi.

Mostly for being wrong. If you look at the markets since we last talked, we’re fine. Everything’s fine.

Was I saying we weren’t going to be fine?

No. You had a very good exposition of what was happening with all of the neoclouds and how they were struggling, and how there was going to be a ton of consolidation. Since then, Elon Musk came out and said basically the same thing: there has to be consolidation among these neoclouds.

I think a lot of people made a mistake heading into the Anthropic S-1 release, which I want to talk about. The whole world decided that the numbers leaked before the actual release were very bad, and that it would be nasty for the AI markets. There was a lot of front-running. Intel came down from $120 to $85, and is now back at $93. SanDisk came off a decent amount. All of these chipmakers sold off, and the AI trade cooled off heading into the S-1 release.

On the day of the release, people were calling it Black Monday. They were saying this would be horrible for the industry, that this was the top, and that everything was going to fall apart. But as an investor and a trader, you have to understand that the market is a weighing machine. It takes into account reality and people’s perceptions of reality. The perception was already so bad that there was nowhere further for the market to go, which is why we actually bottomed on the S-1 release, despite the fact that they’re losing money left and right. You did more research into this, and I want you to talk about it. They need to raise, I think, $80 billion to keep going. But that was already baked in. A lot of people thought the release would lead to a huge blowout. What it actually led to was a blowout of the shorts—not a total blowout, but Intel went from $85 to $94, which is a 10% gain. SanDisk is up 6% today.

It seems like the market has really digested this. The Nasdaq is back up. I think we had a 2% day after the release. It was this classic trade—the same trade as the tariffs, the Iran war, and everything else. Money moves quickly these days, especially pod money. These hedge funds are swinging around, betting on narratives, and trying to make their quarter.

Money moves quickly. Everyone de-risked into the Anthropic S-1, and the moment it hit, we were done. Now it’s on to the next thing that will matter over the next six weeks. The Anthropic S-1 is in the past. This is a common mistake people make because they get swept up in the emotion of it all.

2. “Israel Is A Third World Country”

I’m a buyer right now. I’ve added to some Intel positions, and I was thinking of adding to DRAM here. I think we might get a second leg of the AI trade, especially after the midterms. I also think a lot of this de-risking—which is what I was trying to say on the last podcast, except my internet was sponsored by Bin Laden—was a combination of two things: midterm fears of a Democratic sweep and politicians coming down hard on AI, plus the Anthropic S-1. We’re past part one; now we’re on to part two.

With Republicans in power, it’s just business as usual, Jonah. Nothing is going to change; everything will proceed the same. There’s no reason for a large move higher. But Democrats in power would indicate 2028, and that has huge asymmetric downside. That’s why I think the market is de-risked in many ways.

On the resolution of this, I think we go up. If Republicans win, we go up a lot because people have already de-risked in anticipation of that Democratic downside. If Democrats win, we probably just go sideways for a bit. Maybe we chop. My guess is there’s probably an initial move down. That’s what the algorithms have been designed to do. Right now, every algorithm in the world is designed to sell the market on a Democratic win, but that’s a short-term trade. If we get a Democratic win and a sharp selloff, that’s a buy, in my personal opinion.

It may be a good indication of 2028, but it’s not perfect. And it certainly isn’t good if AOC is the front-runner, because AOC is going to lose, hands down. That’s my personal opinion. We can get into that. I see your face.

Yeah, that’s my opening rant to today’s 1000x podcast.

What a rant.

It feels so good to have internet. I’m not going to lie; it was so painful not to be able to speak to the civilized world.

Avi, it’s nice to have you with some real Wi-Fi, some wireless fidelity.

Israel is a third-world country. People don’t understand this, and I want to talk about it for 30 seconds. People have this idea that Israel is an American colony in the Middle East, some sort of outpost of the West. Let me tell you, you are so far from the truth.

You walk into the airport and immediately see that it’s not that nice. It’s fine; it looks like Newark, maybe in good lighting. Then you get to the taxi line, and it’s the most atrocious process in the world for getting a taxi. You get in, the driver asks you to type in an address, and you set off. You’re probably driving 30 minutes into Tel Aviv, literally looking at shacks half the time. The walls along the highway have peeling paint. Your taxi driver is probably some Moroccan guy weaving in and out of traffic and complaining to you about the state of politics in Israel.

You get to your hotel, and if you’re lucky, it’s the Sheraton or something, and you’re on the beach. Or maybe you’re staying at the InterContinental or the Kempinski. Fine. Take one walk off the boardwalk, and there are stray cats everywhere and people screaming at the top of their lungs. There are dilapidated buildings that look kind of bombed out, despite people living in them.

There are nice things, for sure, but the sidewalks have holes the size of watermelons that you can fall into. You have no idea. You’re so lucky to live in the United States. I don’t know where the taxpayer money they say is being sent to Israel is going, but it certainly isn’t going toward Israelis’ quality of life. Let’s put it that way. Certainly not.

That’s hysterical. I mean, it’s the Kempinski.

It’s very Middle Eastern—very, very Middle Eastern, actually. My girlfriend just put out a tweet that’s doing numbers, saying Israel is way more Middle Eastern than people expect. That came from a lot of our conversations as we were walking around, because she’d never been there before and was looking at it with fresh eyes.

I go every year, so for me it’s a little bit different. She’s looking around, going, “Where the hell am I? What is this place?” I’m like, “You’re in the Middle East, babe.” I felt bad even saying that, Jonah. Why? Because I was just in Iraq, and Erbil has nicer places than Tel Aviv.

Fun fact: I love telling this story because it’s something I absolutely love. I went to the mall in Erbil, and it was beautiful. This thing was immaculately put together, with marble floors, beautiful palm trees, an open-air courtyard, and top-tier restaurants like you find in Dubai. You go to Tel Aviv and pay $18 for a shawarma made by somebody who doesn’t even want to look at you. And I love it, Jonah. It is the greatest country on the planet next to the United States. I’m an American first. Don’t ever forget that. America first, but Israel second.

I just Googled it. I assume you’re referring to the Grand Majidi Mall in Erbil, Iraq.

Yeah, dude. Look at it.

So that mall was opened with money that my former employer and its competitors wired to the Kurdish government after many successful years of oil sales.

You’re kidding me?

Yeah. So basically—

So it’s built with oil money. That’s what I’m talking about, Jonah. That’s exactly what I’m talking about.

My point here, Avi, is Tel Aviv was a freaking sand dune, and those dudes set it up with their brains, their moxie, statecraft, and just making stuff happen. Erbil, okay, fine. You’re sitting on a bunch of natural resource wealth, and you end up with some nice stuff. But I’ll take Israel 10 times out of 10, because they didn’t have any natural resource wealth. As a country, as a people, what they’ve accomplished is bar none.

All I’m saying is that Erbil has some nice places, and I was totally shocked at how nice it was.

Trust me, in 2015 it was not nice. But yeah, okay, fine. Anyway, let me address some of the things you talked about.

Maybe back to the markets. I don’t know.

3. 132B In Cash, Half A Trillion In Commitments

Yeah. Anthropic’s S-1 shows a surprising amount of cash. They have $13.2 billion in cash sitting on their balance sheet. Compare that to their reported forward compute commitments of more than half a trillion dollars, and it’s like they kind of have to keep growing exponentially or they die, or they get bailed out. Probably the latter. I don’t really know how you grow exponentially from here in terms of profit. You could definitely sell quarters for a dime, like Uber continues to do. Uber’s never made any money. It could just turn into this subsidized service here in America, the way Uber kind of is, and the way China subsidizes some critical industries. That seems the most likely to me. Honestly, these numbers just don’t add up. The math doesn’t math.

Obviously, they put in the S-1, “Hey, there’s some risk that AI kills us all, goes rogue, takes control of our company, flushes it all down the toilet, escapes, becomes humanoid, and starts killing people.” Just FYI, in case you’re worried. We put that in the S-1 as a risk, which I thought was kind of crazy.

I think we’re definitely early in the AI trade. I think it’s still the first or second inning of this AI supercycle, but hot bull markets have insane volatility. I could certainly see a point where neoclouds are undercapitalized and get subsumed by hyperscalers. That would create some intra-complex sell-offs and bearishness, maybe in the Qs, for a few minutes before they go back up. Similarly, if Anthropic’s exponential growth starts to plateau, you could see a little indigestion. But I think it’s too big to fail at this point, so it would probably just end up being a dip-buying opportunity that results in a broader rally.

Ultimately, I looked at the S-1, and it was the most attention I’d paid to one in a very long time. My broad conclusion is that the overall market is fine. You talked about SK Hynix and DRAM. SK Hynix came out today and said they’re sold out through 2030. That is what it is, right? DRAM is going to be in a shortage for a long time. With AI stocks, you just have to pick and choose. Don’t buy uncreditworthy neoclouds that are going to run out of money, with their creditors ending up subsidizing Meta’s AI build. Just pick your spots. Buy Micron stock on dips. I wouldn’t buy the Korean stock market. Certainly buy the broader indices, like the Qs or the S&P 500, on dips.

For Anthropic, I’d say it’s a coin flip whether they make it on their own and service these compute commitments by themselves, or whether they fulfill those commitments with some form of assistance from somebody. The founders currently have 50.1% voting control. I think that’s the knob I’m most bearish on. There’s no way the money is going to keep coming in without those guys ceding control of this thing to some broader corporate interest. It’s probably not great for AI safety, but we shouldn’t be worried that the whole AI trade is going to collapse. Just pieces of it will, and then other pieces will rip. Meta stock will rip if they get a bunch of subsidized models and compute, courtesy of some crappy neocloud investors.

4. The Only Chart That Matters

Some other interesting things are worth noting on the AI trade. If Anthropic fulfills even half of its commitments, plus what Meta just announced in terms of its compute commitments, that’s another $200 billion of equity capital into the system. It’s not debt, right? That’s really bullish. It’s a really good thing for demand. It’s more real money getting pumped into the system to slosh around and pump our bags. I think you’re kind of safe in most of this stuff, and very unsafe in some of it.

Now, the big bearish risk you mentioned is the Democrats. If you go on Polymarket, Gavin Newsom is neck and neck with AOC to be the Democratic nominee. They both have 16% odds of being the nominee. I consider myself to be a Bill Clinton Democrat politically, which I think aligns with more of today’s Republican Party than today’s Democratic Party. But my personal views aside, I’ve attempted to step outside my own thought bubble, my little bubble. I listened to the Ezra Klein podcast, where he interviewed a pollster and political consultant who’s probably done more focus groups with Trump voters over the last 2 years than anyone else in America, trying to understand Trump voters’ views on Trump, why the Republican Party has lost support, and why Trump’s approval rating has gone from north of 50% when he was elected to, I think, 36% now.

Basically, everybody’s very dissatisfied with continued high prices and very dissatisfied with the war in Iran, which also contributes to high gasoline prices. High grocery prices are often a function of tariffs, which is sort of promises made, promises kept. But this pollster’s point is that people don’t care about policy. They care about the outcomes of the policy. They’re perfectly happy to say, “Yeah, other countries,” but when it results in unaffordable ground beef at the grocery store, they’re going to blame Trump. Trump is unilaterally responsible for the decisions in Iran, which I think were entirely justified but poorly explained to the American people. I’m glad he did what he did there, but I think he could have explained it better. That’s sort of what leadership is about, and he kind of failed there.

The grocery-store issue with tariffs is that tariffs are undoubtedly raising prices for the American consumer, and the American consumer is very upset. My personal view is that unless something major changes in the next 2 years, which is obviously possible, any Democrat can win if this continues, people are suffering as much as they say they are, and Trump’s approval rating and the Republican Party’s approval rating continue to drop. I never would have thought this before, but I think anyone with a heartbeat has a chance against Trump.

Realistically, the only chart I care about is the Polymarket chart or the Kalshi chart showing who the Democratic nominee is going to be. If it’s Gavin Newsom or Jon Ossoff, markets are going to be fine. It’s going to be more of the same. If it’s AOC or one of these DSA people, sell everything. Get out of the way. It’s over. Your bags are going to zero. These people are freaking crazy. I think what matters is that, for the sake of risk management, we have to assume a Democrat gets elected, Avi. It’s really just which Democrat. If a Republican gets elected, it’s just going to be more of the same: stonks go up.

5. Affordability, The DSA, And What Actually Breaks

Which is going to be, I think, quite good for the markets. But I do want to jump in there for a second and say I don’t necessarily agree that the general feeling in the country is that things are bad and that we’re heading in the wrong direction. I think we’re sort of par for the course. Basically, under every administration, the response of the people has been, “Oh, this needs to be going better.”

“This needs to be doing better.” But the reality is that wage growth is better under Trump than it was under Biden. Inflation is coming down more now than it was during the Biden administration. And while tariffs may be impacting grocery prices, it is not nearly as much as the inflation and money printing of the past, which have rocketed prices up.

The question is: Where is economic growth happening right now? Who is benefiting, and who isn’t? I obviously see that there is a huge group of people who are struggling right now. It is primarily people making $80,000 to $200,000. That is the group of people who are struggling.

That’s the voting bloc that matters. That’s the American middle class.

That is the American middle class, but specifically the coastal elite American middle class.

It’s not like your plumber in Houston is actually doing okay, right?

It’s journalists and these types of people on the coasts who are struggling. And really, the affordability crisis is about one thing. This is what Dor Mani[?] speaks to. This is what Abdul El-Sayed is speaking to: the affordability crisis is about housing supply. People, especially on the coasts, can’t afford housing. They want to live in New York and in the main city centers. They want to live in L.A., and there isn’t enough being done for them.

I think there’s an opportunity, especially—

Yeah, go ahead.

—for Trump and the rest of the Republicans to address that. If they don’t, then we might see an AOC. We might see a Gavin Newsom. But Trump is a pro-building Republican. He’s a New Yorker. If he manages to get things done on the housing affordability crisis, I think that’s really the key. I’m not saying I’m 100% sure the Republicans are getting elected. I’m just saying there’s still room for maneuvering, and that’s what the Democrats are winning on right now. The Democrats are winning on one thing: affordability. That’s it.

Yeah, and that’s why I don’t necessarily think the midterms are predictive of the inevitable Democratic-versus-Republican election. But it’s obviously something we need to pay attention to. Now—

Let me dig into this. Let me just say something here.

This is about risk management. We’re max long—or at least I am—on the highs, right? I need to think about my downside now. The only lens through which I think about my downside is this chart. Let’s assume the country is pretty polarized and split: there’s a 50/50 chance a Republican wins and a 50/50 chance a Democrat wins.

If the Democrats win, I’m looking at this list: Gavin Newsom is business as usual, Jon Ossoff is business as usual, and Josh Shapiro is business as usual. Then you have Pete Buttigieg and AOC. So there’s a 21% chance, if you add those 2 up, that you get something radically to the left of what is now mainstream Democratic policy. Twenty-one percent times 0.5 is the chance that my equity bags get decimated. That’s why I’m paying close attention. It’s not a meaningful probability yet, but it’s like I’m short that put option. It’s meaningful. Let’s call it a 10% to 20% chance of something seriously bad happening. So this is kind of the only chart that matters to me.

For what it’s worth, I’m completely out of touch with the average American. I try to reach outside my bubble. On Monday I was in Austin, Texas, and then on Tuesday morning we drove to Houston. The billboards on the road there are hysterical. Avi would literally offend every coastal elite. Giant—

—giant billboards that say things like, “Democrats want to put this man in a woman’s locker room,” with a giant picture of a huge bearded person.

No way.

Yeah, there’ll be another billboard that says, “Jesus would vote for”—I forget who’s running against James Talarico, the Democrat in—

To be fair, James Talarico is for some reason obsessed with the trans issue.

And this is a huge difference between 2020 Democrats and 2024 Democrats, which is a good point for the Democrats: they’re far less concerned with culture war issues now because they realize that’s a losing issue. They’re far more concerned with affordability, which they keep hammering on, and with foreign policy and aid to Israel. I don’t know if you saw this ad produced by The Young Turks on behalf of—

Israel is really the omnicause. It has 100% replaced climate change. It’s the barometer by which you’re measured: Are you a good person or not? If you don’t land on the right side of that, everything else you believe can be reasonably discounted under the guise that you’re acting in bad faith. That’s really what it is at the end of the day.

That’s the only social issue I think is driving things. For example, this Jane Doe issue that came out of Cornell—the Cornell 7—I don’t necessarily think that’s driving political votes in any meaningful way. It’s a cultural story, but it’s not driving votes in the same way. I went to this council member rally a few months ago, and there were 3 signs at the rally. Three signs, Jonah: “Free housing,” “Free healthcare,” “Free Palestine.” That’s it.

And so Palestine has become the last social issue. I think everything is sort of tucked up under there. But they’re really focusing on healthcare and affordability. The question is, who can deliver that? I think that in order to win the primary, AOC is going to have to get in bed with the more crazy elements of the DSA.

She’s going to have to court the DSA. She’s going to have to start maybe even talking about its platform, which calls for the abolition of the presidency and the Senate and just a congressional system.

What?

Yes. If you read the paper the DSA has put out, what they want is to abolish the presidency—

They want to abolish the Senate because it’s a remnant of the House of Lords, descended from the British system, which gives more representation to the so-called elites of society.

You’d have to do that. It’s in the Constitution.

Well, they don’t teach you this in elementary school.

Well, they want to figure out how to abolish these things. I do think there’s a way to do it constitutionally. Really, the way you do it constitutionally is you defang those institutions, right? In the same way that executive power has diminished over the last 80 years, you can continue to diminish it and take power away from the executive. This is important. This is not good for your—

Those are total fringe elements. Those are people—it’s not likely at all to happen in any way, shape, or form. I mean, it is a fact. You can just go—

It’s a risk. We have to talk about it, but you can actually go to their website and look at this. It’s not a lie. This is very straightforward. If you want to call it a lie, you can, but you can just go to the website and read it. You have to be reasonable about this. It’s a 0% chance that this actually happens.

The reason I give you this context is to say that this is where AOC is going to have to generate her base, because if you spend any time in New York politics, you know that’s where the energy is. The energy is with these people. That’s how they get Zohran Mamdani elected. They’re incredibly competent and organized. They sent out 50,000 people to knock on doors in New York, and they’re quite competent, honestly. Despite their insanity, they’re quite competent.

6. Crypto Is The Real Political Risk, Not AI

What’s going to end up happening is that the voter base is not ready for that. That’s what I’m saying. If AOC does what I think she needs to do, which is lean into that, it’s going to let Gavin Newsom pull ahead. But I agree with you that this chart is extremely important because it is a risk. This is what we’ve been talking about for the last year and a half. This is really the only risk to the market.

But the question is: A risk to what market? Is it a risk to biotech, AI, or crypto? My interpretation is that it’s really not a risk to AI, because even the Democrats understand that. Despite all the anger, if you go on TikTok and look at the comments about AI, young people hate it. They absolutely hate it.

They think it’s the worst thing ever. Even though there’s a populist angle against AI, I do not think the Democrats will be able to politically stop AI from progressing. Everyone knows it’s important to the engine of the U.S. economy, so it’s going to be very hard for them to reel that in.

What they can reel in with very little pushback is literally everything in crypto. They can slap regulations on Coinbase. They can have the CFTC and SEC enforce securities laws to a far greater extent than they do today. They can push for new legislation that wouldn’t look anything like the legislation the Republicans have put through. It would probably look like the opposite. If you touch a crypto wallet and send $5, you’re in big trouble, right?

So this is what I’m mostly worried about. Honestly, if I were you, the best way to “de-risk” your portfolio would probably be to short crypto, because there’s an asymmetry there. If that’s what you’re really worried about, the best way to do it might be to buy puts on Bitcoin—specifically, puts on Ethereum, because I think Ethereum would be the most affected by this.

Bitcoin would be less affected, but Ethereum, Solana, and all these L1s would be deeply affected by a Democratic administration. Perhaps the best way to construct a portfolio moving forward, in line with the absolute idiot Jason Calacanis, might actually be that crypto is the right way to go.

He has honestly been dead right. He published that famous “If You’re in Crypto, Pivot to AI” thing in 2022. Objectively, pretty much every company in crypto, except for the ones that don’t matter, has pivoted to AI. Hyperliquid is kind of the only company that matters in crypto that isn’t pivoting to AI and is doing well.

7. Million Dollar Bitcoin

He also published another viral tweet saying Bitcoin will never see its all-time high again. His point was, “Hey, it used to be that you were shamed for not owning Bitcoin; you were perceived as a Luddite or stupid. Now owning Bitcoin is just dead money. There are better things to own.” I think he’s right in the sense that, as we’ve talked about many times on the pod, crypto is a community-building asset. It has a way of incentivizing influencers to pump a certain asset. Even Trump became an influencer for Bitcoin as a result.

He’s right that if there isn’t that kind of niche, cool-kid, bag-pumping, influencer-driven momentum, crypto isn’t as exciting as it used to be. But what I think he’s missing is that this is very much a right-now thing, a particular moment in time. Bitcoin is starting to look a whole hell of a lot like gold, where you go through long periods of time when it just ranges or does nothing, and then other long periods when it multiplies in value. Maybe that’s the longer-term regime we’re going into for Bitcoin.

I still strongly believe we’re going to see million-dollar Bitcoin sometime in the next 10 years—a million dollars a token. The reason is that none of these people—AOC, Jon Ossoff, Kamala Harris, Donald Trump, Marco Rubio, or JD Vance—will be able to help themselves from pumping more liquidity into the economy and debasing the currency. It’s inevitable, forever, unless some of these fringe views come true and the DSA takes over, turning us into a collectivist economy run by a Politburo with a five-year plan. But that’s never going to happen.

I just don’t think it’s going to happen. Honestly, just buy as much Bitcoin as you can. Even if that happens, people will still put all their money into Bitcoin to get it out of the country.

To close the loop on political risks and then move forward to Bitcoin and ETH, here in L.A., we’re seeing the DSA take over. In New York, it kind of already did. Mamdani can’t really do that much, but here in L.A., where our current mayor, Karen Bass, trained in Cuba with the Che Guevara youth, I didn’t think local leadership could get any further left than that.

But she’s now about to lose to the odds-on favorite, Nithya Raman, who, thankfully for me as a Jew, isn’t like Mamdani. Her favorite thing isn’t “Free Palestine.” She doesn’t seem to care about Jews or Palestine. Her main thing is just, “I want homeless people doing bath salts in front of schools.” That’s her platform: encourage as much stealing, police defunding, homelessness, and drug abuse as possible.

Even in the debates, they asked, “Would you support leaving an unhoused individual on the street in front of an elementary school with a needle in his arm?” Karen Bass said, “Hell no.” Spencer Pratt said, “Throw him in jail.” Nithya Raman said, “Well, we have to be compassionate.” Watching this happen here, you’re seeing a preview of what would happen to the stock market if the DSA took over America.

Basically, the big local bellwether market in L.A. is multifamily housing. That market is getting absolutely Shanghaied. It’s getting mulched. It’s getting dildoed. There aren’t enough trading-floor words to describe what’s happening to that market, because it’s sort of the equity index of L.A. that’s exposed to local policy. If the DSA takes over the United States, you’ll see that at scale. It’ll hit the Nasdaq and the S&P.

But to the broader point about crypto versus stocks, and AI stocks specifically, the genie is out of the bottle. Where I was going with my rant about Houston and Jesus voting against James Talarico is that I’ve seen that side of the spectrum. On the other side, I’ve listened to the Ezra Klein podcast and reached out to my Columbia friends, who are all left-of-Mamdani liberals. They’re complaining about AI and saying it’s a net negative for society, should be banned, should be regulated, and is harmful, risky, and unsafe. They want AI banned.

The thing about Bitcoin and crypto is that you’re right about ETH versus Bitcoin: an empowered Elizabeth Warren and Gary Gensler duo can absolutely stymie everything except Bitcoin. Bitcoin, like AI, is a global phenomenon. The genie is out of the bottle, and it’s going to rip no matter what.

Various AI-adjacent things can be killed in America, depending on the administration and what’s going on in Washington. Most of crypto can be killed in Washington, as we experienced so viscerally during the previous cycle. But the bellwethers—Bitcoin and major AI trades, major AI exposure—I think are going to be just fine pretty much forever.

So I think Jason Calacanis is actually spot on about people pivoting to AI. Literally everybody’s trying to trade compute futures now. I think that’s a big fat joke. Even Coinbase is trying to pivot to AI a little bit: “Oh, tokens are going to be the way that agents transact.” I’m not sure about that. Honestly, Stripe is just fine. It gets the job done. Visa, Mastercard.

I agree. The more I talk to people about whether agents are going to interact specifically with blockchain rails, the less it makes a ton of sense to me. The main argument people like Ilya use is that you need this verifiability aspect, where you need to know who you’re sending to. And I’m just like, that—

No, you don’t. That’s solved by accounts on Stripe. But—

That’s a whole—

We’ll be releasing that interview on Friday, so you guys can take a look. I like Ilya.

Me too. He’s great.

But to take a step back, I think everything is going to get Shanghaied in the crypto world if the Democrats come in. That’s why I view it as a very good potential trade, and also just a good hedge for somebody who’s worried about this, for somebody looking at this risk. If you’re very crypto-heavy, you have to pay attention to that chart Jonah pulled up on Polymarket, because the reality is that the Trump administration has used crypto to grift massively. The Democrats are going to come in and paint Trump as a grifter, which is true.

They’re going to investigate World Liberty Financial for sure.

Investigate World Liberty Financial. And they’re going to paint crypto as a tool for money laundering, a tool for grift, a tool for extracting as much value as possible. So who’s going to be safe? What assets are actually going to be safe? Are they the assets that are in bed with the institutions that can protect them?

When we’re talking about integrating crypto financial rails into the system, that’s what’s getting all the hype right now. You’re looking at the LayerZeros of the world. You’re talking about whether Hyperliquid will be adopted by trading institutions like hedge funds, and whether they’ll start trading on these platforms. Anything integrated by traditional financial institutions and used to further their goal of profit, I think, will be protected even under a Democratic administration.

Basically, everything outside of that is going to have a very hard time battling a legal onslaught. That’s what you have to worry about now. Those assets I mentioned—I don’t know if they’ll be able to stand out. Hyperliquid for sure isn’t used broadly enough by hedge funds to withstand a regulatory onslaught, absolutely not. For Bitcoin specifically, I think it’s going to be targeted. I think Michael Saylor is probably going to end up getting targeted by a Democratic administration.

8. You Only Need One Token

Heading into that, you have to think about what you’re going to do. Where are you going to put your money moving forward? Where is the asymmetry in the market? That just goes back to tech.

It just goes back to everything else that we’ve talked about before, which I think is Jason Calacanis’s point, right?

Yeah. Basically, I think what I’m realizing here is that blockchain is integrating into society, technology industries, and finance the way it was always supposed to. The big question mark was, do you need tokens or not? The answer is: you need one token, BTC. You do not need any of these others. It’s not necessary to have a token.

You can integrate blockchain technology and extract rent for providing better back-office services and better rails for financial goods and services. I think Ansem has egg on his face. Pretty much everybody who’s been shilling their random shitcoin has egg on their face. It is abundantly clear. It is crystal clear how this is going to work with crypto going forward.

I’m kind of bearish on tokens other than BTC. I’m talking long term. Short term, yeah, there’s always trading to do, things that pop, money to be made, and whatever. But long term, shorting altcoins is such a great trade because they’re all going to trend to zero over time, no matter what. If the Democrats win, they take the express train to zero, right? Nobody wants to relive 2022 from the long side.

Agreed.

And there’s still a tremendous amount of supply out there, obviously.

Yeah.

Anyway, we’ll see what happens. If you’re thinking about de-risking right now, it’s probably the wrong time. We’re just a few days out from the midterms. These events tend to be driven by the news, especially because the news has been so negative for the markets heading into this. Prices are depressed, and positioning is all on one side. My take is you probably want to buy the dip. If we get a Democratic sweep and the market dips, I’m in. I’m taking out leverage and buying some assets for a short-term pop. That’s my trade.

9. Three Mile Island, And The Worst Own Goal In Modern History

Long term, my portfolio looks exactly the same as ever. It’s biotech, ARKG, which is heading back to new highs today. That’s good. I think it’s up 5% or 6%. I’m still in Intel, still in the Qs, and I’m just in the S&P. That’s literally my entire portfolio, although I am looking for another entry into uranium. I do think that’s going to come soon.

What’s the thesis there?

The thesis is that we need to—I mean, this is something for you to opine on—we need to figure out where to generate energy from. One thing that’s becoming more of a consensus is that, if you look over at Europe right now, people are actually looking at building out nuclear power plants because they’re “clean,” right? If you can flip the narrative in Europe, I think you can flip the narrative in the United States. Energy production from uranium sources may be used to build out data centers in a clean fashion to appease the crazy climate activists, who are now actually more in favor of nuclear power than they have been in the past.

This is something I’m still paying attention to. I do not own any yet. To me, I think nuclear is too long a cycle.

Yeah, it takes 7 to 10 years to build out.

I think people—I’d love it if we were doing what China’s doing on the modular reactor front. To me, it’s the most idiotic policy own goal of the last 100 years, in my opinion. Well, maybe since World War II, it was to look at Three Mile Island and say, “You know what? We’re just going to give up on literally the solution to climate change, the solution to all of our future energy needs.”

We developed the technology during the Manhattan Project. Let’s just abandon it all because of one totally unrelated, mismanaged disaster that didn’t actually hurt anybody. That was the worst own goal in modern economic history. Undoing that own goal is going to take so long because of all the regulatory red tape.

What people don’t realize is that you can just stand up a gas plant in the middle of nowhere, Texas, or in the middle of nowhere, California. Just build them. It’s not hard. It’s inexpensive. They produce a ton of power. There’s natural gas everywhere. Stick one next to a pipeline and get going. It’ll be fine.

I agree with you, but the political considerations are obviously there. I don’t think there’s going to be a ton of support to build out significant amounts of energy capacity from highly polluting gas plants.

I’ll tell you something interesting, Avi. Necessity is the mother of invention, but the corollary to that theory is that necessity is the mother of scrambling to cut red tape, eliminate bureaucracy, and get things done, right? Like wars. During wars, regulation goes out the window and people just build.

Down in Austin, I was touring a manufacturing line. I can’t disclose whose line or what was being built, but when that little red light goes off on top of the machine, people come running, literally sprinting, because every second that line is down costs the company building the stuff a lot of money.

If we get the equivalent of a line-down situation in power markets, they’re going to stand up some modular gas turbines wherever we need the power. If these data centers are involved, one of two things is going to happen, right? If AOC’s in charge and there start to be rolling brownouts because of data centers in major metropolitan regions, they’ll just ban AI and hand a victory to China, right? If it’s basically anyone right of the DSA, more power plants will get built, whether it’s a Democrat or a Republican. Just mark my words. Watch it happen in record time.

I’m marking your words, Jonah.