Bitcoin Is About to Absorb a Historic Rotation

Name: Bitcoin Is About to Absorb a Historic Rotation
Uploaded: 2026-02-21T14:00:59.000Z
Duration: 1 h 44 min 37 s

Understanding Bitcoin's Role in Deflation and Software Markets

The Fiat System vs. Bitcoin

The fiat system is valued at $800 trillion, while Bitcoin stands at $2 trillion, indicating a potential rotation that could elevate Bitcoin as deflation occurs.

The discussion introduces Jordi Visser, focusing on the implications of deflation and inflation for software stocks and Bitcoin.

Key Insights from Jordi Visser

Visser presents an image illustrating how Bitcoin may benefit from deflation, emphasizing the macroeconomic context affecting interest rates and monetary policy.

He notes a significant shift in the crypto community since October 10th, suggesting this date marks a pivotal change in market dynamics.

Liquidity and Market Sensitivity

Visser references analyses by Lyn Alden and Sam Callahan regarding liquidity's impact on Bitcoin compared to NASDAQ stocks.

He expresses skepticism about the prevailing belief that Bitcoin remains highly sensitive to liquidity changes, especially as AI technology accelerates.

The Impact of AI on Software Valuation

As AI advances, it threatens traditional software valuations; anything replicable through AI risks becoming worthless over time.

Despite maintaining costs for AI services like Claude, their capabilities have vastly improved, leading to rapid technological deflation.

Scarcity vs. Abundance in Investment Strategies

In a deflationary environment, investors seek scarce assets; gold and silver are currently favored due to their tangible nature.

Wealthy individuals often distrust Bitcoin unless they have profited from it directly; this skepticism influences investment strategies across markets.

Future Outlook for Bitcoin

Visser believes that as software struggles under deflationary pressures, Bitcoin will distinguish itself as a scarce growth asset within the next year.

He argues that current market conditions differ significantly from past correlations between Bitcoin and NASDAQ performance during downturns.

Understanding the Future of Bitcoin and Scarcity

The Role of Moats in Value Preservation

Discussion on the importance of believing in assets with a "moat," such as religion, gold, and Bitcoin, especially in an inflationary environment.

Inflation and Its Consequences

Inflation is linked to budget imbalances and rising national debt; liquidity has historically driven Bitcoin's value.

Acknowledgment that some may perceive shifts in narrative within the Bitcoin community when current performance does not meet expectations.

Shifting Drivers of Value

Transition from liquidity and inflation as primary value drivers to deflation influencing all scarce assets, including Bitcoin and gold.

Human Nature: Greed and Investment Behavior

Greed is identified as a fundamental aspect of human nature that drives investment decisions across various sectors.

Money is described as a delusion; increased wealth leads to greater desire for more wealth, perpetuating greed.

Deflation's Impact on Investments

In a deflationary environment, investors tend to avoid underperforming assets (e.g., Ford), while certain markets (like Japan) have shown resilience over time.

Innovation-related investments are highlighted as outperformers compared to traditional commodities since 2007.

Market Dynamics and Asset Rotation

Speculation on how asset rotation could occur if younger generations shift their investments from fiat currencies ($800 trillion market cap) towards Bitcoin ($2 trillion).

Deleveraging Trends

The speaker believes the world is undergoing deleveraging, moving towards a monetary base aligned with nominal GDP (~$120 trillion).

Long-term Outlook for Bitcoin

The belief that deflation will lead to higher valuations for Bitcoin through asset rotation over decades rather than abrupt changes.

Personal Reflections on Belief in Bitcoin

Reflection on being influenced by Michael Saylor’s views during 2021 regarding innovation-driven inflation affecting traditional business models.

This structured summary captures key insights from the transcript while providing timestamps for easy reference.

BitGet's Trading Innovations and Market Insights

BitGet's Trading Features

BitGet has achieved a milestone of $4 billion in daily trading volume, allowing users to trade 79 instruments across various global macro assets like forex, precious metals, indices, and commodities directly with USDT.

The platform offers high liquidity and low slippage for trades with leverage up to 500x. An AI agent assists users in executing trade orders efficiently.

BitGet is enhancing crypto adoption through partnerships with La Liga and Moto GP, as well as collaborating with UNICEF to support blockchain education for 1.1 million people by 2027.

Market Dynamics and Software Companies

A chart shows that major media companies' stock prices fell before their revenues did, indicating the market's foresight regarding the internet's disruptive impact on these businesses.

Investors are now scrutinizing software companies similarly; despite current profits and growth metrics, there may be a delay before financial impacts are fully realized due to technological shifts.

Multiple Compression in Markets

There is concern about multiple compression affecting software companies while they continue to grow earnings. This raises questions about whether the market is accurately valuing future potential or simply reacting negatively based on current trends.

The speaker suggests that if there's a market correction (e.g., 20%), it might not stem from economic fundamentals but rather from uncertainty in valuations over time.

Bitcoin's Correlation with Market Trends

The discussion highlights how Bitcoin’s value is tied to broader market dynamics; when traditional software stocks decline, Bitcoin often follows suit due to investor sentiment.

The speaker emphasizes that Bitcoin remains connected to fiat systems and traditional markets until it breaks this correlation. If it does break away from these influences, its value could rise significantly.

Future Outlook on Bitcoin

The expectation of increased volatility arises from uncertainty about future valuations; if investors cannot predict company values three years out, this will affect all asset classes including Bitcoin.

Ultimately, the belief is that if one anticipates long-term growth for assets like Bitcoin (potentially reaching $1 million), patience is required as significant gains may take years rather than occurring immediately.

The Future of Companies and Investment

The Concept of Abundance in Investment

Discussion on the long-term investment horizon (10 years) and its implications for valuing companies like Nvidia in a future where humanoids are commonplace.

Elon Musk's perspective on abundance suggests that wealth preservation will become more important than traditional stock investments, which may not guarantee success.

The Decline of Public Companies

Prediction that public companies may cease to exist within 10 years, replaced by small entrepreneurs thriving in a low-cost environment.

Comparison of public companies to "bloated, overweight" individuals, suggesting their lifespan is diminishing as evidenced by market trends.

Market Dynamics and Company Longevity

Analogy comparing public companies to unhealthy individuals; only one major tech company (Microsoft) has been around since the 1980s, indicating a trend towards shorter lifespans for corporations.

Emphasis on the need for new capital structures as many S&P 500 companies may no longer function as traditional businesses.

Evolution of Capital Structures

Speculation about future capital structures involving stable coins, Bitcoin, RWAs (Real World Assets), and NFTs rather than conventional public company frameworks.

Introduction of tokenization in finance with examples from Figure Technologies aiming to create digital shares while removing traditional shares from circulation.

Onchain Fundraising and Financial Innovations

Exploration of how liquidity might evolve with potential changes in public company structures; liquidity could remain but manifest differently than today’s models.

Insights into the differences between RWAs and onchain systems; likening them to taxis versus Ubers illustrates the shift towards more efficient financial solutions.

Transition from Analog to Digital Finance

Reflection on past predictions regarding tokenization; highlighting the transition from physical stock certificates to electronic systems over decades.

Acknowledgment of existing inefficiencies within current electronic trading systems despite their advantages over physical assets.

Transitioning from Analog to Digital: The Future of Tokenization

The Evolution of Technology

The speaker discusses the transition from the analog age to the electronic age, predicting a shift into a digital age characterized by on-chain technologies.

Initially, discussions around tokenization focused on assets like equity and real estate, but it was ultimately the dollar that became the first major asset to be tokenized.

Understanding Digital Assets

A distinction is made between "digitally native" assets and those in a "digital wrapper," emphasizing that issuers must decide which approach aligns with their goals.

Real World Assets (RWAs) are defined as physical items being tokenized for digital use, highlighting the importance of true on-chain representation versus merely transferring off-chain assets onto a blockchain.

Risks in Transitioning to On-Chain Solutions

The speaker identifies two significant risks for the year: rapid deleveraging due to shifts from software to hardware and increasing security vulnerabilities associated with partial on-chain solutions.

Concerns are raised about hacking incidents becoming more prevalent as technology evolves, particularly regarding systems that are not fully integrated into an on-chain environment.

Agent Swarms and Security Vulnerabilities

An explanation of "agent swarms" is provided, describing how AI can enable coordinated hacking efforts at unprecedented scales.

The speaker warns that advancements in AI will lead to highly intelligent models capable of executing complex hacks, likening them to having billions of Einsteins attempting breaches.

Implications for Public Companies and Bitcoin

Public companies may become prime targets for hackers utilizing AI agent swarms; however, Bitcoin remains relatively secure against these threats due to its decentralized nature.

As awareness grows about potential vulnerabilities in traditional systems, individuals may increasingly turn towards Bitcoin as a safer alternative for storing value.

How AI is Transforming Home Schooling

The Role of AI in Education

A stay-at-home mom is utilizing the latest AI technologies to enhance her children's education, potentially within a homeschool pod setting.

She demonstrates how she integrates technology into lessons, such as creating visual illustrations for topics like plant growth using AI tools.

The use of an AI co-pilot in teaching allows for personalized learning experiences, showcasing the potential of technology in education.

Impact on Learning Outcomes

Reports from Alpha School indicate that students are achieving high academic success with only two hours of study per day, suggesting efficiency in learning through tailored approaches.

The discussion highlights the shift towards one-on-one tutoring facilitated by AI, which may lead to better educational outcomes compared to traditional classroom settings.

Cost Efficiency and Accessibility

Teachers may find it more economical to utilize AI resources rather than relying on donations for classroom supplies and textbooks.

Mark Andre's insights emphasize the advantages of homeschooling versus traditional schooling, particularly regarding individualized attention and learning effectiveness.

Future of Education with AI

The conversation raises questions about the future structure of colleges and universities as one-on-one tutoring becomes more prevalent due to advancements in AI.

Emphasizing ease of use, individuals are encouraged to explore AI tools that can simplify complex tasks and enhance productivity.

Personal Experiences with AI Tools

A salesperson shares their experience after being guided on how to leverage advanced AI tools effectively for personal projects.

The speaker encourages others who have not yet engaged with these technologies to do so, highlighting the empowering nature of understanding and utilizing AI.

Bitcoin Mining and Automated Trading Insights

Bitcoin Mining Operations

The discussion begins with a description of a "white glove hosting operation" where users own their miners, select their own pool, and receive Bitcoin directly to their wallets.

The company is recognized on the Inc. 5,000 list as Iowa's fastest-growing firm, managing over 40,000 machines. Their execution stands out, particularly with the top-rated ASIC repair center offering free repairs for the first year.

Users can pause mining operations without penalties if margins tighten and have access to a marketplace for reselling equipment when resizing or upgrading fleets.

A resource titled "2026 Bitcoin Mining Blueprint" is available for free at simplemining.io/p, which outlines common mistakes investors make in mining and how to avoid them.

Automated Crypto Trading with Arch Public

The episode introduces Arch Public, an automated trading platform that utilizes advanced algorithms for buying and selling crypto based on user-defined strategies.

Arch Public supports various trading goals such as accumulating Bitcoin during dips or profiting from Ethereum volatility while providing dedicated support from a concierge team.

As a preferred partner of major exchanges like Coinbase and Kraken, Arch Public emphasizes security and performance in its trading services.

AI Innovations in App Development

The conversation shifts to AI advancements with mention of Rooric AI; the speaker highlights personal investments in several tech companies including Replet and Synthesis.

Lovable's technology allows users to create iOS apps using natural language prompts, effectively replacing traditional development tools like Xcode.

This innovation challenges previous limitations imposed by Apple's ecosystem (the "walled garden"), enabling broader access to app creation across multiple Apple devices.

Implications of Widespread App Creation

The ease of creating apps raises concerns about discoverability within app stores; finding quality content becomes increasingly challenging amidst an influx of new applications.

The speaker reflects on the balance between accessibility in app development versus maintaining high-quality content that rises above the noise in crowded markets.

The Future of Apps and Private Credit Concerns

The Shift Towards Bespoke Applications

The proliferation of apps (8 billion) makes it challenging to find suitable options, leading to a future dominated by bespoke applications tailored for individual needs.

Many enterprises remain reliant on outdated mainframe systems from the 1970s, which hinders their ability to adapt quickly in a rapidly changing tech landscape.

New companies are likely to favor platforms like Gmail over traditional tools such as Outlook, emphasizing the need for immediate customization in business solutions.

Challenges in the Private Credit Market

Blue Owl is facing scrutiny over claims of gating redemptions, raising questions about transparency and stability within private credit markets.

Concerns arise when established companies like Salesforce see declining stock values despite stable earnings, indicating potential issues within private credit lending practices.

Hypercompetitiveness and Its Impact

The hypercompetitive nature of app development leads to an oversaturation that complicates market navigation and diminishes value for consumers.

A significant portion (8% - 13%) of private credit portfolios is tied up in software internet services, which have recently seen declines due to market volatility.

Economic Indicators and Delinquency Rates

Various sectors including IT services are experiencing downturns; consulting firms face reduced demand as enterprises become more efficient with fewer resources.

Rising delinquency rates across auto loans, student loans, commercial real estate, and credit cards echo trends seen during the Great Financial Crisis.

Long-Term Implications for Technology Companies

The technology sector faces unique challenges due to rapid changes and deflationary pressures affecting long-duration assets like private credit.

Investors' desire for liquidity mirrors a bank run scenario; concerns about asset quality among pension funds further complicate the outlook for private credit markets.

Understanding the Risks of Private Credit and Hyperscalers

The Nature of Ponzi Schemes and Market Skepticism

Discussion on the characteristics of Ponzi schemes, emphasizing that while Blue is not labeled as such, there are concerns about cash flow management in similar financial structures.

The opacity of certain businesses can be both beneficial and detrimental; it allows for less market pressure but also creates uncertainty regarding asset valuation.

Potential Market Downturn Scenarios

A warning about a possible significant market decline driven by credit issues, particularly focusing on high-yield spreads in technology sectors.

Concerns over hyperscalers like Oracle and Google issuing substantial debt, indicating potential vulnerabilities in their financial health.

Implications for Software Companies

If software companies do not recover from current lows, they risk becoming value traps with stagnant growth prospects.

Microsoft is highlighted as a key player straddling both software and hyperscaler markets, facing unique pressures due to underperformance.

Investment Strategies Amidst Uncertainty

Recommendations for safer investment options include commodities and international markets (Europe, emerging markets, Japan), which are less exposed to U.S. software sector risks.

Anticipation of challenges related to data center construction delays and political shifts affecting market dynamics as midterm elections approach.

Broader Economic Concerns

The potential impact of AI advancements on the market could lead to increased scrutiny on hyperscalers' operational capabilities amidst weakening credit conditions.

A prediction that a significant drop in equities could occur if various economic pressures converge, estimating a 25% chance of a notable downturn this year.

Emphasis on AI's Role in Financial Management

Urgency expressed for money managers to engage with AI technologies or risk falling behind due to rapid developments in the field.

Plans to provide deeper insights into investment opportunities related to AI while addressing how traditional thinking must adapt during uncertain times.

Understanding AI Mindset and Bitcoin Trading

Developing an AI Mindset

The speaker emphasizes the importance of adopting a systems thinking approach, akin to that of the Santa Fe Institute, when learning about AI. This mindset is crucial for understanding complex interactions within systems.

The discussion will cover various markets and recent developments, indicating a busy week in the financial landscape, particularly concerning Bitcoin.

Bitcoin Trading Insights

The speaker urges listeners to focus on how Bitcoin is trading relative to software rather than its absolute price (e.g., $70,000 or $40,000). This relative analysis is deemed more significant for understanding market dynamics.

A shift in Bitcoin's trading patterns could signal major changes in market behavior and investor sentiment.

Community Engagement

The speaker encourages viewers to subscribe to his YouTube channel as a form of appreciation for the knowledge shared weekly. This act serves as a digital handshake between content creator and audience.

Event Reflections

Gratitude is expressed towards attendees at an event where the speaker met many individuals from the community. Positive interactions highlight the supportive nature of this network.

Observations are made regarding personal energy levels (HRV), suggesting that people are drawn to those who exhibit positive energy or charisma.