Hedge Fund Manager ALL-IN on Bitcoin | Jordi Visser

Bitcoin, Debt Ceiling, and Banking Crisis

In this transcript, the speaker discusses the current state of Bitcoin and its relation to the US economy. They also talk about the debt ceiling crisis and how it may affect people's trust in the US banking system.

Bitcoin and China's Money Supply

• Bitcoin is gaining popularity as people lose trust in the US economy.

• China's M2 has grown by five trillion dollars since October, which typically leads to an increase in Bitcoin value.

• All signs are pointing towards a positive direction for Bitcoin due to AI innovation, Fed under attack, and Asia dominating global growth.

Debt Ceiling Crisis

• The debt limit crisis is a major news story that will become more significant as time goes on.

• People are losing trust in the banking system due to rising debt levels.

• The debt ceiling crisis comes at a time when there is already a banking crisis and Fed is doing QT (quantitative tightening).

• The debt ceiling crisis will bring back attention to the fact that spending cannot continue forever.

Outlook on Debt Limit Crisis

• There will likely be some agreement reached eventually even if there is some technical default where they find ways to pay it off.

• Congress will go through drama but eventually agree to raise it with some spending changes.

• Although likelihood of default is low, people may lose faith in U.S. system due to the debt limit crisis.

Banking Crisis

• The banking crisis is more acute than the debt ceiling crisis, with people worried about their deposits.

• No further information provided in transcript.

Hedge Funds vs Banks

In this section, the speaker discusses how hedge funds and banks operate similarly in terms of taking deposits and investing them in less liquid assets. The lack of transparency and speed of information during the 2008-2009 banking crisis led to a lack of trust in the financial system.

Similarities between Hedge Funds and Banks

• Both hedge funds and banks take deposits with overnight or daily liquidity.

• They invest these deposits in less liquid assets.

• Lack of transparency and speed of information during the 2008-2009 banking crisis led to a lack of trust in the financial system.

Fractional Reserve Banking System

In this section, the speaker talks about how people are learning that fractional reserve banking is a leveraged Ponzi scheme. During the banking crisis, there was immense support from various organizations to reassure people that the financial system was safe.

Fractional Reserve Banking System

• People are learning that fractional reserve banking is a leveraged Ponzi scheme.

• There was immense support from various organizations during the banking crisis to reassure people that the financial system was safe.

Inflation and Structural Forces

In this section, the speaker talks about inflation being transitory despite printing an enormous amount of money. He also discusses three structural forces - demographics, debt, and exponential innovation - that remain unchanged even if inflation were to be controlled.

Inflation and Structural Forces

• Despite printing an enormous amount of money, inflation appears to be transitory.

• Three structural forces remain unchanged: demographics, debt, and exponential innovation.

• Demographics are getting worse, debt is enormous, and exponential innovation is deflationary.

Deflationary Forces and the Rise of Crypto

In this section, the speaker discusses how deflationary forces have affected the financial system and led to the rise of alternative investments like gold and Bitcoin.

The Impact of Deflationary Forces

• Deflationary forces came into play when stocks went down last year, which forced the FED to raise rates and knock bonds down.

• People are actively seeking alternatives to the US-based financial system due to uncertainty and nervousness. Gold, Bitcoin, etc., are seen as beneficiaries outside of the system.

• Since 2008, there has been a lot of mistrust in major economies like China, Europe, and the US. Governments have had to print money to keep their economies from collapsing.

The Rise of Crypto

• More users are migrating towards crypto as an alternative investment due to mistrust in traditional financial systems.

• Despite its growth, you still can't function entirely in the crypto world since it's not yet widely accepted as a form of payment.

• The Fiat system has a total sum of all assets around $450 trillion globally. In contrast, the crypto world is only about $1 trillion but growing fast.

• Since February 2020 before the pandemic hit, stocks and bonds have barely moved while Bitcoin has increased by over 1000%.

SBB Chat GPT and AI's Role in Decentralization

In this section, the speaker talks about his paper titled "SBB Chat GPT and The Future Of Trust - The Bitcoin Moment" where he connects SBB debt limit, Bitcoin, and OpenAI's Chat GPT to discuss the role of AI in decentralization.

The Decentralization Moment

• The speaker views technology like artificial intelligence and blockchain as a decentralization moment.

• Currently, 60-70% of investments within the stock world are in the US. However, with AI and blockchain accelerating, there is a shift towards decentralization.

• Any scheme that works requires trust. Decentralization allows for more trust in systems like chat GPT, which can benefit people globally.

The Role of Artificial Intelligence

• The paper connects SBB debt limit, Bitcoin, and OpenAI's Chat GPT to discuss how AI can play a key role in decentralization.

• AI can help create amazing ideas from anyone globally as long as they have access to it.

The Bitcoin Moment for Artificial Intelligence and Blockchain

In this section, the speaker talks about how the Bitcoin moment is a moment for artificial intelligence and blockchain to start the real passion for decentralization through the U.S no longer having the dominant place for technology and Innovation.

Rise of Artificial Intelligence and Blockchain

• The Bitcoin moment is a moment for artificial intelligence and blockchain to start the real passion for decentralization.

• The US will no longer have the dominant place for technology and innovation, which will spread globally.

• This moment will accelerate distrust in traditional systems like banking, leading to significant inflection points.

Evaluating Bitcoin's Rise

• Pre-pandemic, Bitcoin was seen as a toy by many people.

• However, in 2020 going into 2021, there has been a drastic change with more Wall Street hedge fund managers talking about it openly to the public.

• There's been an enormous growth rate of M2 in a short amount of time due to printing money by Fed.

• Deposits went up dramatically during pandemic but are now declining.

Decentralization Movement

• Regional banks are falling leading to people looking for another alternative.

• This decline cannot be minimized as something that's important because those regional banks are part of the decentralization movement.

• People are looking at alternatives such as Wells Fargo, JP Morgan, Bank of America etc., which benefit from these changes.

Bitcoin as an Asset in Your Portfolio

In this section, the speaker discusses how Bitcoin is becoming easier and cheaper to use. He also highlights the importance of including crypto assets like Bitcoin in your investment portfolio.

Benefits of Including Bitcoin in Your Portfolio

• Bitcoin has been around for 15 years and is not going away.

• Including crypto assets like Bitcoin in your portfolio has resulted in exceptional returns over the last 10 years.

• Even over the last three years, including Bitcoin in your portfolio has resulted in exceptional returns, with only one year of poor performance.

Measuring Expectations for Bitcoin as an Asset

• Programmatic monetary policy means that we know what amount of Bitcoin will come into circulation. Demand is the big variable.

• To measure expectations for Bitcoin as an asset allocator, it's important to follow charts that represent growth of Bitcoin in the fiat world.

Factors Affecting Growth of Bitcoin

In this section, the speaker discusses various factors affecting growth of bitcoin such as innovation index, focus on United States, weakening dollar and growth in Asia.

Factors Affecting Growth of Bitcoin

• When Innovation Index (ndx) outperforms SPX (dominated by older industrial parts), bitcoin generally does well.

• People's confidence in US will continue to decline globally particularly in Asia due to Fed under attack along with banking sector and debt ceiling.

• Weakening dollar typically results in good performance for bitcoin.

• China dominates global growth; M2 money supply has grown by $5 trillion since October. When China's money supply increases, bitcoin typically performs well.

Impact on Cryptocurrency Trading

• Countries such as Pakistan have banned ownership of bitcoin while Nigeria has banned trading cryptocurrency.

• India is also considering a ban on cryptocurrency trading.

The Global Growth Story

In this section, the speaker discusses the global growth story of cryptocurrency and blockchain technology.

Asia's Dominance in Crypto

• Almost 70% of crypto users worldwide are in Asia.

• The rest of the world dominates crypto growth and usage, with Africa having 38 million users and the US having 45 million users.

Importance of Immutable Data

• Immutable data has never been more important due to advancements in AI that can create fake data quickly.

• Blockchain and AI intersect, making immutable data even more critical for governments and businesses.

Impact on Bitcoin

• Investments in blockchain indirectly impact Bitcoin because money stays within the system.

• Goldman Sachs and Microsoft joining forces on a new blockchain network is worth watching.

Innovation vs. Traditional Macro Data Points

In this section, the speaker discusses how innovation impacts traditional macro data points such as Federal Reserve policies.

Explosive Growth from Innovation

• Explosive growth from true innovation may mute the impact of Federal Reserve policies.

• Printing trillions of dollars into the system during a time when everyone is at home leads to enormous deposits coming into technology innovation spaces like SVB.

Overall, this transcript covers topics related to cryptocurrency, blockchain technology, global growth story, importance of immutable data, impact on Bitcoin investments, innovation vs. traditional macro data points such as Federal Reserve policies.

The Power of Innovation and Deflationary Forces

In this section, the speaker discusses how innovation is starting to reassert itself in the market and how it is impacting decision making. He also talks about the power of compounding ideas and how it is reducing the impact of problems like running out of oil.

Innovation and Deflationary Forces

• Last year was not about rates going higher or inflation going higher, but rather about the Fed being far behind the curve.

• Short-term rates went higher, but long-term rates did not go higher due to deflationary forces.

• The market is now building in the power of innovation and deflationary forces.

• The speaker believes that oil will not be as big a problem in five years due to innovation.

Using Artificial Intelligence Internally

• Artificial intelligence has allowed for increased efficiency within their investing practice.

• They are using artificial intelligence for optimization and portfolio construction.

• They are also using it to find things that may be too correlated with a given factor or have moved to help with decision making.

• The biggest impact will be on human decision making, which takes away from alpha ability.

Artificial Intelligence and the Future of Work

In this section, the speaker discusses whether artificial intelligence (AI) can eventually replace human workers in various industries.

AI's Impact on Jobs

• The speaker believes that AI may take time to fully replace human workers, but it could augment their work.

• It is difficult to predict how far AI can go in replacing investors and asset allocators. The speaker prefers to stay within a one to three-year timeframe when predicting technological advancements.

• While some jobs may be replaced by AI, others such as solving math problems will still require human intervention.

• Autonomous vehicles should already be on the road, but humans are slowing down the process due to trust issues.

Human Plus Machine

• The speaker believes that human plus machine has been impacting the workforce for a long time. While there are positives and negatives associated with AI, humans will still have a trust factor that machines lack.

• People need stories and want to hear them before investing in something. Humans need to be involved in decision-making processes for comfort purposes.

Fear of Change

• People fear change and losing their jobs. They vote based on their fears and what they want. Countries like China and the US will create more regulations around AI because they have more to lose than other countries.

• Other countries like Brazil have different problems such as education and corruption that AI can help solve. However, people there fear participating due to past negative experiences.

This transcript was originally in English so I provided my responses using English language as requested.

The Importance of Arts and Storytelling in the Future

In this section, the speaker discusses the importance of arts and storytelling in preparing for the future. He believes that while computer skills are important, combining them with an art degree or something in psychology will give young people the ability to tell stories, which is a skill that humans need.

Arts and Computer Science

• The speaker's 17-year-old son wants to study computer science, but he has been encouraging him to also pursue an art degree or something in psychology.

• The speaker believes that storytelling is a skill that humans need, and combining it with computer skills will be valuable for young people in the future.

Efficiency of Writing with Chat GPT

• The speaker talks about how chat GPT can make writing more efficient by editing and expanding ideas.

• He believes that chat GPT can help writers make more connections between ideas while still keeping their original thoughts.

Reading Books vs. Consuming Knowledge

In this section, the speaker talks about his views on reading books versus consuming knowledge. He believes that books are a waste of time because there are easier ways to consume knowledge such as using blinkist or asking chat GPT for summaries.

Books vs. Blinkist

• The speaker thinks books are a waste of time because they take too long to read.

• He suggests using blinkist as an easier way to consume knowledge since it provides summaries of books.

• Alternatively, he suggests asking chat GPT for summaries or chapters of books.

Themes the Speaker Cares About

• The speaker spends time reading about longevity and futuristic things that will have an impact on him.

• He is currently spending time on coding and certain GPT plug-ins that he can use in his work.

Learning Style and Information Consumption

In this section, the speakers discuss their learning styles and how they consume information.

Learning Styles

• Rabbit hole learning is preferred by one speaker.

• The other speaker has transitioned from being a cliff notes person to reading more in-depth books.

• Both speakers use technology to consume information, such as YouTube videos and chat GPT.

Information Consumption

• One speaker consumes information on 1x or 2x speed depending on the source.

• The other speaker watches around 13 YouTube videos per day ranging from coding to health topics.

Asset Allocation and Economic Outlook

In this section, the speakers discuss asset allocation and their economic outlook.

Economic Outlook

• The speakers do not believe there will be a recession that matters (defined as losing at least 1.5% of the workforce).

• They believe inflation has peaked and is coming down, but there may be a technical recession with negative GDP numbers.

• Innovation should be focused on if there is no systemic recession.

• Stock markets in the rest of the world are expected to outperform the US due to various reasons discussed.

• The dollar is expected to weaken permanently due to banking crisis and debt ceiling issues.

Bitcoin Strategy

In this section, the speakers discuss their strategy for allocating to Bitcoin.

Bitcoin Strategy

• Speakers are positive about Bitcoin due to various reasons discussed earlier.

• They are buying it with no specific price target in mind.

Bitcoin Strategy for Traders and Holders

In this section, the speaker discusses his approach to Bitcoin as a trader and holder. He explains how he manages billions of dollars in the fiat world without having anything in the crypto world.

Approach to Bitcoin

• The speaker believes in innovation and micro, which means being long on Bitcoin is also being long on AI and innovation.

• If you believe that Bitcoin is going higher, then the Fed and the dollar will be places that you just are taking the opposite side of. Believing that the FED is going to have to print money to keep this bubble from bursting.

• If you believe in the Asia growth story in Emerging Markets benefiting from decentralization of technology away from US having a monopoly, that's another way to belong Bitcoin.

Fractional Reserve Banking System

• The US has about 18 trillion dollars of deposits which fund household net worth in the country on top of 18 trillion dollars is 150 trillion. That's fractional reserve banking system which banks provide leverage.

• As deposits leave they're going into money market funds. Money market funds don't give you leverage so you have this money that no longer is part of fractional reserve banking.

• The only way for FED is to add money back in to keep assets from falling because if household net worth went from 150 trillion to 100 trillion we'd have a serious systemic recession.

Speaker's Approach

• All content by speaker can be found at G Weiss g w e i s s.com including videos every week but access papers and everything there.

• Speaker's podcast is In Search of Green Marbles which goes on once a week and covers the markets and all the big macro Global themes.

• Speaker can be followed on Twitter at this sir underscore Weiss.

Learning Python and Efficiency

In this section, the speaker talks about how they started learning Python and how it has helped them become more efficient in their work. They also discuss the importance of technology in learning and becoming more efficient.

Learning Python

• The speaker was told by others that to get the most out of Python, they would have to code in it.

• However, the speaker did not want to spend time learning Python as they were too busy with other plugins.

• The speaker realized that using technology to become more efficient is key, and therefore decided to learn enough Python to be able to use it effectively.

Importance of Technology in Learning

• The speaker learned how to cook through watching videos on YouTube and other technologies.

• Technology has opened up the ability to learn much faster, which keeps your brain sharper and makes you less intimidated and rigid.

• It is important not to leave behind traditional ways of learning but rather incorporate technology into them for a better outcome.