Source: If You Miss This Bitcoin Run, Dont Say You Werent Told
Compiled by: lenaxin, ChainCatcher
Editor’s Note:
This article is compiled from a video interview between Anthony Pompliano and Jordi Visser, a macro strategy investment expert with 30 years of experience on Wall Street. Jordi will interpret the current economic situation from a unique perspective. In the interview, Jordi also discussed hot topics such as inflation, stock market, Bitcoin, AI, and analyzed why market trends always go against mainstream expectations.
ChianCatcher compiled and edited the content.
TLDR
The definition of economic recession in traditional economics textbooks has lost its explanatory power under the contemporary economic structure.
The market begins to view Bitcoin as an indispensable part of asset allocation
The continued depreciation of currency is an inevitable trend
Autonomous investors, independent investors, and retail investors are the real dominant forces in the market
The essence of the “Fed Put Option” is perpetual currency depreciation
The core driving factor of Bitcoin price trend lies in the change of correlation between the US dollar index and US bond yields
Structural changes in capital flows are far more worthy of attention than short-term economic fluctuations
The currency repatriation caused by the tariff policy will continue to put pressure on the US dollar, which in turn affects the yield curve
The strong performance of the AI industry in Q1 strongly supported the overall economic indicators
As AI advances exponentially, historical experience becomes less important
1. Inflation controversy and data trust crisis
Anthony Pompliano: The market was worried about tariffs, recession and even the Great Depression, but the data in April showed that consumption remained strong, some commodity prices fell, and inflation fell. The stock market rebounded quickly. Does this mean that the alarm is all clear? How do you view these economic signals?
Jordi Visser: As the tariff issue eased, the policy path has become clearer over the past five weeks: from a 90-day reprieve from additional tariffs on Chinese products to a phased increase in tariffs, which are now generally more reasonable, mostly maintained at 10%, close to the level recognized by Druckenmiller.
This makes the differentiation of economic data more obvious: business sentiment (soft data) remains sluggish, but hard data driven by consumption and AI investment are robust. Although consumption is affected by market fluctuations in the short term, the AI industry strongly supports the economy.
Therefore, the SP 500 rebound is reasonable. Despite many pessimistic expectations, the stock market has risen this year and the recession forecast has not come true. In fact, the traditional definition of recession is no longer applicable to the current complex and resilient economic structure.
Anthony Pompliano: Current economic data is showing a clear politicization tendency. How can we find credible reference indicators? In economic analysis, should we re-evaluate the reference value of such politicized data?
Jordi Visser: In the current environment, the Bitcoin community has unique advantages. In the era of social media, people are more likely to be exposed to information that caters to their own views, and many macro analysts attract attention by singing the pessimistic note of the market. Bitcoin holders, however, have developed the ability to question authority and think independently because they have long been rejected by the mainstream.
In the context of the accelerated development of AI, the importance of historical experience is decreasing. For example, it is no longer appropriate to draw analogies with tariff policies in the 19th century; modern information spreads very quickly, and rumors such as vacant ports will quickly amplify people’s panic about inflation, making rational judgments more difficult.
The core advantage of Bitcoin holders is that they understand cognitive humility. The essence of the current macroeconomic situation is that there is too much debt, and the government cannot deal with it by raising taxes or cutting spending. In the end, it can only be resolved through currency devaluation, which will weaken the value of bonds but benefit Bitcoin. The key is to discern the truly important signals in the noise of social media.
2. Bitcoin’s counterattack: from marginal asset to market leader
Anthony Pompliano: The advantage of Bitcoin holders lies in their cognitive gaps. They admit that they dont understand traditional finance, which makes them more receptive to the new paradigm. Bitcoin is not an IQ test, but a test of cognitive flexibility: whether we can break out of old thinking and realize that we are in a new economic paradigm.
Today, capital is accelerating its transfer to autonomous investors, who are the real dominant force in the market. Although institutions have funds, they often fall into complex strategies, such as hedging operations, which are essentially arbitrage. The buy and hold strategy of retail investors is simpler and more effective, and has been verified many times in cases such as Tesla, Palantir, and GameStop.
Against the backdrop of currency devaluation, the simplest “buy and hold” strategy often outperforms sophisticated financial engineering.
Jordi Visser: The Fed Put Option theory that Wall Street has long believed in is undergoing a fundamental change. Traditional financial crises often form a U-shaped bottom (slowly bottoming out and recovering), but now the market is showing an I-shaped straight rebound (immediately recovering after a sharp drop).
There are two main reasons behind this:
AI reshapes the economic structure, and the popularization of flexible employment makes large-scale unemployment difficult to occur, and the traditional recession model becomes ineffective;
Recession has become a policy choice. The government uses inflation policies to hedge the deflationary pressure brought by technology, and the economy is balanced between technological deflation and policy inflation.
Bitcoin investors can see through this trend due to two understandings:
Understand that the essence of the “Fed put option” is continuous currency depreciation;
High-frequency trading trains the mindset, allowing players to make calm decisions under pressure like poker players.
Anthony Pompliano: When market consensus diverges from real trends, how do you identify valid economic signals? When authoritative judgments continue to diverge from market reality, what are the real leading indicators?
Jordi Visser: I think the stock market will still be volatile this year, but corporate profits are growing and economic fundamentals are stable.
Paul Tudor Jones turned bearish before the easing of US-China tariffs, and Steve Cohen also predicted a 45% probability of recession and a market correction. But be careful: when well-known investors are bearish, they may be trying to guide market sentiment because they missed the rebound.
I don’t think the market will bottom out again because of the special financial model of the AI industry: although the technology giant plans to spend $300 billion in capital expenditures, it only needs to amortize $30 billion this year. This “revenue in advance, cost in the back” model provides profit space for the SP 500 in the short term. Similar situations occurred in the early days of cloud computing and the Internet, but the difference is that technology companies now have lower debt.
In the long term (2-3 years later), when Mag 7 companies need to deliver real returns, challenges will emerge. Sequoia pointed out that start-ups are gradually eroding the market share of giants. It is expected that the market will be under pressure after reaching a new high, but it will not return to the low point in the short term.
3. AI Revolution: The Power of Reconstructing Economic Rules
Anthony Pompliano: When AI startups dare to challenge industry giants, aren’t these “opponents’ choices” the most powerful endorsement of their value?
Jordi Visser: Based on the latest data disclosed by Stripe, AI programming tools represented by Cursor have achieved annual recurring revenue of US$300 million, and together with innovative products such as Replit and Windsurf, they are driving structural changes in the software development paradigm.
Although AI cannot yet replace the top 2% of programmers, it can already replace 80% of basic coding work, and this proportion continues to rise.
The impact of technological change can be compared to offensive tactics in football: startups only need to break through a few defense lines, while large companies are constrained by architecture, inertia and compliance, and the transformation cost is higher. This structural difference is the key variable that explains the differentiation of corporate digital transformation efficiency.
In particular, medium-sized companies (market value of $300 million to $2 billion) face a dilemma: they lack the flexibility of start-ups, but also find it difficult to enjoy the advantages of scale. Moreover, 63% of these companies are burdened with floating-rate debts, which puts them under significant pressure in an environment where inflation remains at 3.2%. This middle-tier dilemma highlights the structural costs of the technological revolution.
Looking ahead to 2024-2029, SP 500 companies will face a direct impact from emerging technology companies. Will these disruptors still take the traditional IPO route? Compared with old-school economists who only talk about it on paper, entrepreneurs on the front line are obviously more qualified to answer this question.
Anthony Pompliano: In the context of accelerating productivity, is there any basis for bearish assets in the next three years? Can the pessimism in the market still hold true?
Jordi Visser: Market historian Russell Napier pointed out that the change in the structure of capital flows is the real key compared to short-term economic fluctuations. The tariff policy has driven the return of US dollars, which will continue to suppress the US dollar and thus affect the yield curve.
In the new economic landscape driven by AI, the stock market presents two major characteristics: the top 10% of the population contributes half of consumption, and with huge assets and transfer payments, consumption is resilient; at the same time, $300 billion in AI spending pushes up profit margins and drives infrastructure investment. Traditional recession warning models are failing.
Although some small and medium-sized enterprises are under pressure, the overall market is more likely to fluctuate sideways rather than fall sharply. The biggest risk is that it will not outperform inflation. In this technology-driven era, ignoring the productivity changes brought about by AI may miss important investment opportunities.
(IV) Debt, interest rates and the risk-averse logic of Bitcoin
Anthony Pompliano: Why is Bitcoin always the first to complete price adjustments before the geopolitical situation becomes fully clear?
Jordi Visser: In the current economic policy environment, the institutional adoption of Bitcoin is accelerating. Sovereign wealth funds and government agencies continue to increase their holdings, and people are finally beginning to see it as an essential part of asset allocation because of its unique value due to its low correlation with traditional assets. Bitcoin has shown resistance to market declines and has recovered first before the stock market rebounds.
However, the second half of the year may face the risk of rising interest rates caused by the debt deficit problem. The 30-year Treasury yield has approached a 20-year high, which is directly related to the return of capital from Asia and the deterioration of the US fiscal situation. When the 10-year Treasury yield breaks through the 4.8%-4.85% range, the stock-bond correlation may change. Pension funds have achieved sufficient funds due to rising interest rates and may increase bond allocations, which will continue to push up long-term interest rates.
Anthony Pompliano: What level do you think the 10-year Treasury yield needs to reach? Considering the overall policy and economy, should this upper limit be lower than 4%, or even lower? What is the yield standard that truly represents policy success?
Jordi Visser: The core driving factor of Bitcoins price trend lies in the change in the correlation between the US dollar index and US Treasury yields. The current market is structurally differentiated: despite the continued rebound of US stocks, the fluctuation range of the US dollar index has narrowed, while the federal funds rate remains high. This divergence is difficult to sustain for a long time.
As interest rates continue to rise, the default rates of consumer credit and housing mortgage loans in the United States have climbed to cyclical highs. Against this backdrop, policymakers may be forced to introduce housing market rescue policies. Although the possibility of directly implementing quantitative easing is low, it is not ruled out that targeted liquidity support measures similar to the Silicon Valley Bank incident will be introduced.
Under the new economic paradigm driven by AI technology, the impact of rising interest rates on the technology industry has shown significant differentiation. The leading technology companies Mag 7 (specifically seven technology giants such as Microsoft, Apple, and Nvidia) are basically immune to financing cost pressure, and companies in the AI field have also shown strong profitability resilience. This structural difference provides the basis for the potential short squeeze of Bitcoin.
Anthony Pompliano: For AI companies, higher interest rates may actually bring greater competitive advantages, but their competitors face higher capital costs.
Jordi Visser: The current economy is showing structural differentiation, with corporate bankruptcies and startup growth coexisting. Traditional companies are forced to withdraw due to rising financing costs, while AI startups are rising rapidly, reflecting the improvement of resource allocation efficiency. However, whether this transformation is healthy still requires vigilance against potential structural risks.
The key is to judge: Is this a benign market self-regulation, or is it hiding a systemic crisis? Whether the decline of traditional industries can match the growth rhythm of emerging industries will determine the sustainability of this round of transformation.
5. Creative destruction: the law of survival in the AI era
Anthony Pompliano: How do we judge the quality of the current economic adjustment? Are the resources of eliminated enterprises effectively transferred to emerging enterprises with more innovative efficiency?
Jordi Visser: From a micro perspective, business closures do cause social costs such as job losses and interruptions to family income; but from a macroeconomic operating mechanism perspective, this process of survival of the fittest is like organizational optimization of enterprises, and is a necessary way to maintain market vitality and promote industrial upgrading. This is essentially what economic recession means, and creative destruction is happening.
Career breaks can also be opportunities to upgrade skills. Last year, after my hedge fund closed, I chose to start a business and turned to AI learning and Python programming to achieve a career transition. This shows that as long as you invest time, even at the age of 58, continuous learning can break age limits and open up new career paths. For job seekers, mastering AI skills will significantly improve their competitiveness.
Anthony Pompliano: The Trump team has won trillions of dollars in investment promises in the Middle East. Although it is not fulfilled in the short term, the United States is still seen as an open market in the context of tax increases. Do these countries regard the United States as a partner or an opponent? Is this perception important for economic development?
Jordi Visser: We should be cautious about any investment data released in installments. The US net international investment position has reached negative $27 trillion, and this verifiable data shows that global capital has been deeply involved. If the US dollar continues to depreciate, US productive assets held overseas will face the risk of systematic impairment.
There is no effective solution to the current debt and fiscal deficit problems, and the weakness of the US dollar will be gradual. Although the Federal Reserve has not restarted quantitative easing, it has only reduced the scale of reinvestment of maturing bonds by US$5 billion per week. This nominal tightening policy is inherently consistent with the strategy of Asian and European investors to gradually reduce their holdings of US bonds - the maturing funds may not be fully reinvested.
What is more noteworthy is the global competition landscape of the AI industry. The technological advantages of American startups are facing global catch-up, and European developers are fully capable of developing products such as Cursor and Replit. If the market position of Mag 7 companies is shaken, global income redistribution will lead to a restructuring of the capital flow pattern. This structural change is far more strategically significant than the scale of short-term investment.
Disclaimer
The content of this article does not represent the views of ChainCatcher. The views, data and conclusions in this article represent the personal positions of the original author or the interviewee. The compiler maintains a neutral attitude and does not endorse its accuracy. It does not constitute any advice or guidance in any professional field. Readers should use it prudently based on independent judgment. This compilation is limited to the purpose of knowledge sharing. Readers are requested to strictly abide by the laws and regulations of their region and not participate in any illegal financial activities.
