The Pomp Podcast
00:14:27 · Jordi Visser
[00:14:27] S3: So Bitcoin is is, you know, a trillion and 0.5, trillion 7 asset. It's still doubted by almost everyone who has the money. Mhmm. We've seen such a dramatic shift in the last twelve months in terms of the banks. I mean, first it was the government saying, we're all in on Bitcoin. Now you have all the banks basically bending over backwards to basically be all in on selling people Bitcoin. So we've seen some things happen in the last two years with the ETF, with everything, where greed eventually sets in. These are the people selling things. The outstanding shares for the Bitcoin ETF hit new all time highs despite the fact that we are significantly off the all time highs, which means wealth managers are still putting money in there because as a diversification, I think it's legitimate. Now you and I talked about some of the headwinds for Bitcoin in the beginning part of this year. I did a video today, I don't know if you got a chance to see it, but I sent it to you. But there's a bunch of things in there which kind of fit in with this story in the bigger picture. Number one, I think with the midterms, we've eliminated the the bubble risk, which sounds funny when the market's going down, but my argument would be there isn't a bubble risk yet because we haven't done enough of the debt. We haven't done enough of the spending yet. If there was a macro event which slowed down the demand side or something happened in the next couple years and these guys spent more and more money, think it would be an issue. But if we're all believing that they're not gonna spend as much money for 2028, well then that would mean that CapEx would probably be less next year. They've already started on the stuff that'll happen now. If they're worried about 2028, maybe there'll be a delay and that would be good for the bubble risk, meaning it would push out the build out further and further, and that would be good. Second thing is there'd be less capital needed. That's put enormous pressure on rates to go higher. Second thing is if people believe that the market is gonna go down and there's gonna be of a build out and Brad Gerstner says this is 50 basis points off GDP, well then that means that growth will come down, which means rates should come down. At the same time, one of the contributors to inflation this year has been DRAM prices.
00:16:31 · Jordi Visser
DRAM prices have already peaked, Not in terms of their actual price, but in their growth rate. They're in a negative declining year over year growth rate right now, and that's only gonna get worse as we go through the year because the biggest portion of the gains happen really from September to March. So by the time we get to March, you're gonna start seeing the base effects kick in. The base effects are gonna kick in for oil because now you have oil down at levels. You're getting gas at the pump down. We have the tariffs rolling off. So when you go through everything, a lot of those things were negatives for Bitcoin this year, they were negatives for gold because they were all related to liquidity. And I think the liquidity headwinds are gonna drop off, and that's what I did in the video, to just highlight to people that maybe something good comes out of this for Bitcoin, but the biggest thing is the volatility and the lack of certainty on AI going forward. So again, June, fireworks show's over. We're never again gonna see what we saw in the first half for the agentic compute trade. From that point on, it's gonna have to be a grind. We've seen hedge fund deleveraging. I think this is all part of the bigger script. I think AI is causing this, and I think it will continue to cause a disruption from politics, a disruption in bottlenecks, a disruption in all of these different things. And I think people have to start to think about adjusting their portfolios, and I do think that that is what's gonna play out over the course of the next five years.
00:17:55 · Anthony Pompliano
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00:20:02 · Anthony Pompliano
I know that you probably are an expert in understanding these things. So maybe help us understand, like, how do these two things line up in terms of liquidity environment getting much more attractive for Bitcoin, and then what is the Elliott Wave analysis telling us?
00:20:16 · Jordi Visser
[00:20:16] S3: Alright. So the things I mentioned on the liquidity, you have to remember, so real yields went extremely high this year. So so people understand the difference between saying ten year rates went higher and real ten year rates. Ten year rates went higher, inflation expectations did not. So let me repeat that. We saw bond yields go higher, but inflation expectations actually went down since March. So you've had this scenario that when you're using inflation swaps or inflation expectations, you've taken real rates real rates up to big high levels. Now what's happened in the last week, we've seen another significant drop in inflation expectations. Two... One year and two year inflation expectations are lower than where they started this year, and that's because of the oil price that's come down. I don't think enough has been said about what happened this week. The fact that oil fell, I mean Brent crude was down $20 in three days, and that happened right before the election, and I've talked to a bunch of macro people and I'm surprised that people didn't realize that, okay, Iran, basically this week, seemed like they were the ones for the first time that said, hey, we're ready to talk. I'm I'm... Khamenei is giving the okay for them to have conversations. So the price falls. Every time the price has fallen this year, it's been Donald Trump basically saying, yeah, there's gonna be a deal, and then there'd never be a deal. This time, it was the Iranians that basically did this, and the oil price dropped. And I think that's probably because they held out for as long as they possibly could. They got their blue tsunami, and now they get to play from a negotiation in their mind of strength. The vice president is now on a different page than the president, and he's gotta start preparing for the election in 2028. So the oil price has come down, and those types of things, real yields, oil, they've had a big impact. The Fed raising rates, we went from expectations of rate cuts at the beginning of the year to significant rate hikes, not just this year, but into next year. And so I highlighted that that's been correlated. These are all negatives for gold. They're all negative for Bitcoin in terms of the liquidity side.
00:22:26 · Jordi Visser
The only reason that I think people were disappointed is because the AI trade was trading better, the Nasdaq was up, but now you've got the Nasdaq down, you've got rates falling, you've got oil falling. So I know this is hard for people to do. It was easy in people's minds to go invest in the AI trade in May and June because it was working, and now they don't wanna buy anything. The reason I said I haven't made a purchase yet in the last two weeks that's up on money, there's no way to buy the bottom of this. I don't don't think. I also think the AI trade is real and this isn't a bubble, So by not having a bubble unwind and by feeling the liquidity is good. For the Elliott wave, Elliott wave theory is very, it's the technical analysis I chose. I chose it because of Paul Tudor Jones and Stan Druckenmiller when I read a book that they were both quoted in where they said this was the book. At least Paul said he read it every single year. Stan said he, as I got to know both of them, Elliott Wave is just such a beautiful art form for markets. The theory behind it is from, I think his name is RN Elliott. But he was basically an accountant who decided he was gonna study all of the chart patterns of stocks and think of it as coming up with the way that stocks move, because at the end of the day, they are human psychology. And what he's found was that they moved upward in impulsive moves, and then there'd be a correction where it would kinda go sideways, then they'd go up powerfully again, and they'd go sideways, and it would go, and everything moved in kinda fives and threes. So the thing I showed you on the video, Bitcoin's move from the lows back really in June into early July, and then up to where we just peaked, that was five waves, and now we've seen a three wave correction that is almost textbook, getting now down to the two hundred day moving average, which is right around the 73, 74 area. So everything looks good, assuming that the equity market is gonna find a loan. The other thing I showed in there is there are some signals I'm looking for in the equity market, which haven't triggered yet, but we're closer to them today than we were when I did the video this morning.