Source: If You Miss This Bitcoin Run, Don't Say You Weren't Told
Compiled & Translated by: lenaxin, ChainCatcher
Editor's Note:
This article is compiled from a video interview between Anthony Pompliano and Jordi Visser, a macro strategic investment expert with 30 years of Wall Street experience. Jordi will provide a unique perspective on the current economic situation. In the interview, Jordi also delves into hot topics such as inflation, stock markets, Bitcoin, AI, and analyzes why market trends often go against mainstream expectations.
ChainCatcher has compiled and translated the content.
TL&DR
The traditional economic textbook definition of "economic recession" has lost its explanatory power in the contemporary economic structure
The market is beginning to view Bitcoin as an indispensable part of asset allocation
Continuous currency depreciation is an inevitable trend
Self-directed investors, independent investors, and retail investors are the true market drivers
The essence of the "Federal Reserve put" is perpetual currency depreciation
The core driving factor of Bitcoin price trends lies in the changing correlation between the US dollar index and US Treasury yields
Structural changes in capital flows are more worth paying attention to than short-term economic fluctuations
Currency reflux caused by tariff policies will continue to put pressure on the US dollar, thereby affecting the yield curve
The strong performance of the AI industry in Q1 strongly supported overall economic indicators
In the current exponential development of AI, the importance of historical experience is declining
The impact of technological revolution can be compared to offensive tactics in rugby: startups only need to break through a few "defensive lines," while large enterprises are constrained by architecture, inertia, and compliance, making their transformation more costly. This structural difference is the key variable explaining the divergence in enterprise digital transformation efficiency.
Especially for mid-sized enterprises (market capitalization of $300 million to $2 billion), they face a dilemma: lacking the flexibility of startups while unable to enjoy scale advantages, with 63% of companies carrying floating-rate debt, facing significant pressure in an environment of 3.2% inflation. This "middle-layer predicament" highlights the structural costs of technological revolution.
Looking ahead to 2024-2029, S&P 500 companies will face direct impact from emerging tech companies. Will these disruptors still follow the traditional IPO route? Compared to armchair economists, frontline entrepreneurs are clearly more qualified to answer this question.
Anthony Pompliano: Against the backdrop of accelerating productivity release, is there still a basis for bearish assets in the next three years? Can market pessimism really still hold?
Jordi Visser: Market historian Russell Napier points out that changes in capital flow structure, rather than short-term economic fluctuations, are truly critical. Tariff policies driving dollar repatriation will continue to suppress the dollar, thereby affecting the yield curve.
In the new economic landscape driven by AI, the stock market shows two key characteristics: the top 10% contribute half of consumption, coupled with massive assets and transfer payments, demonstrating strong consumer resilience; simultaneously, $300 billion in AI spending is boosting profit margins and driving infrastructure investment. Traditional recession warning models are becoming ineffective.
Although some small and medium-sized enterprises are under pressure, the overall market is more likely to oscillate sideways rather than experience a significant decline, with the biggest risk being unable to outpace inflation. In this technology-driven era, ignoring the productivity transformation brought by AI may miss important investment opportunities.
(IV) Debt, Interest Rates, and Bitcoin's Hedging Logic
Anthony Pompliano: Why can Bitcoin always complete price adjustments first before geopolitical situations are fully clear?
Jordi Visser: Under the current economic policy environment, Bitcoin's institutional adoption rate is accelerating. Sovereign wealth funds and government agencies continue to increase holdings, and people are finally beginning to view it as a necessary component of asset allocation due to its unique value of low correlation with traditional assets. Bitcoin demonstrates resilience during market downturns and rebounds before stock market recovery.
However, the second half of the year may face interest rate upward risks caused by debt deficit issues. The 30-year Treasury bond yield is approaching a 20-year high, directly related to Asian capital repatriation and deteriorating US fiscal conditions. When the 10-year Treasury yield breaks through the 4.8%-4.85% range, stock and bond correlations may change. Pension funds, having achieved funding adequacy due to interest rate increases, may increase bond allocations, further pushing up long-term rates.
Anthony Pompliano: What level do you think the 10-year Treasury yield needs to reach? Considering policy and economic overall situation, should this upper limit be below 4%, or even lower? What exactly is the yield rate standard that truly represents "policy success"?
Jordi Visser: The core driving factor of Bitcoin price trends lies in the correlation changes between the US dollar index and Treasury bond yields. The current market shows structural differentiation: despite continuous US stock market rebounds, the dollar index's fluctuation range is narrowing, while the federal funds rate remains high. This divergent state is difficult to sustain long-term.
As interest rates further rise, US consumer credit and mortgage default rates have climbed to cyclical highs. In this context, policymakers may be forced to introduce housing market relief policies. Although the possibility of directly implementing quantitative easing is low, targeted liquidity support measures similar to the Silicon Valley Bank incident cannot be ruled out.
In the new economic paradigm driven by AI technology, the impact of interest rate increases on the tech industry shows significant differentiation. Mag 7 tech giants (specifically referring to Microsoft, Apple, NVIDIA, and six other tech behemoths) are basically immune to financing cost pressures, with AI companies also demonstrating strong profit resilience. This structural difference provides a basis for potential Bitcoin short-squeezing.
Anthony Pompliano: For AI enterprises, higher interest rates might actually bring greater competitive advantages, as their competitors face higher capital costs.
Jordi Visser: The current economy shows structural differentiation, with corporate bankruptcies coexisting with startup growth. Traditional enterprises are forced to exit due to increased financing costs, while AI startups are rapidly rising, reflecting improved resource allocation efficiency. However, the sustainability of this transformation requires vigilance against potential structural risks.
The key is to determine: Is this a benign market self-regulation, or is there a hidden systemic crisis? Whether the decline of traditional industries can match the growth rhythm of emerging industries will determine the sustainability of this transformation.
(V) Creative Destruction: Survival Rules in the AI Era
Anthony Pompliano: How to judge the quality of the current economic adjustment? Are resources from eliminated enterprises effectively transferred to emerging enterprises with more innovative efficiency?
Jordi Visser: From a micro perspective, corporate failures indeed cause job losses and family income interruptions with social costs; but from the macroeconomic operation mechanism, this survival-of-the-fittest process is similar to corporate organizational optimization, a necessary path to maintaining market vitality and promoting industrial upgrading. This is essentially the inherent nature of economic recession, and creative destruction is occurring.
Career interruption may also become an opportunity for skill upgrading. Last year, after closing my hedge fund, I chose to start a business, turning to AI learning and Python programming, achieving career transformation. This shows that as long as time is invested, even at 58, continuous learning can break age limitations and open new career paths. For job seekers, mastering AI skills will significantly enhance competitiveness.
Anthony Pompliano: The Trump team secured investment promises worth trillions in the Middle East, though not immediately realized, the US is still viewed as an open market under taxation. Do these countries ultimately see the US as a partner or an opponent? How important is this perception for economic development?
Jordi Visser: One should maintain a cautious attitude towards any installment-announced investment data. The US net international investment position has reached negative $27 trillion, a verifiable data point showing global capital's deep involvement. If the dollar continues to depreciate, overseas-held US productive assets will face systemic devaluation risks.
With current debt and fiscal deficit issues lacking effective solutions, dollar weakness will present a progressive characteristic. While the Federal Reserve has not restarted quantitative easing, it is only reducing weekly debt reinvestment by $5 billion, and this "nominal tightening" policy is internally consistent with Asian and European investors' strategy of gradually reducing US debt holdings—maturing funds may not be fully reinvested.
More worthy of attention is the global competitive landscape of the AI industry. The technological advantages of US startups are facing global catch-up, with European developers fully capable of developing products similar to Cursor and Replit. If Mag 7 companies' market positions are shaken, global income redistribution will trigger capital flow pattern reconstruction, and this structural transformation is far more strategically significant than short-term investment scale.
Disclaimer
The content of this article does not represent ChainCatcher's viewpoint. The views, data, and conclusions in the text represent the personal stance of the original author or interviewee. The compilation team maintains a neutral attitude and does not endorse its accuracy. It does not constitute professional advice or guidance in any field. Readers should use it cautiously based on independent judgment. This compilation is limited to knowledge sharing purposes. Readers should strictly comply with local laws and regulations and not participate in any illegal financial activities.
