About this Video

• Video Title: Short Squeeze Incoming? Bitcoin, Iran, and the Global Power Crisis
• Channel: Anthony Pompliano
• Speakers: Anthony Pompliano, Jordy Visser
• Duration: 00:35:14

Introduction

This video discusses the market reactions to the geopolitical conflict between Iran and Israel, its impact on various asset classes (Bitcoin, gold, oil, stocks), the AI boom and its implications, the US-China trade dynamics, and the latest inflation data. The conversation also delves into the potential for a Bitcoin short squeeze and explores Jordy Visser's perspectives on market risks and opportunities.

Key Takeaways

• Geopolitical events impact markets initially, but the long-term effects are often less severe than initially anticipated. Market reactions to conflicts tend to be short-lived unless the conflict escalates significantly.
• The AI boom is driving insatiable demand for computing power, creating significant opportunities in the energy sector. Companies like Oracle are experiencing record growth, highlighting the need for increased energy production to support AI infrastructure.
• The US-China trade relationship is evolving into a separation or "divorce," leading to increased domestic focus on manufacturing and supply chains. Both countries are working to reduce their reliance on each other.
• Recent weak inflation data suggests a potential for rate cuts by the Fed, despite concerns about a recession among certain segments of the population. The continued strength of the AI sector is creating a unique economic dynamic.
• A Bitcoin short squeeze is predicted due to low volatility and potential upward pressure. The speaker believes this will be a painful but significant price movement.

Follow-up Questions - Answers

1. Jordy Visser uses several examples to illustrate how geopolitical conflicts usually have a limited long-term impact: Iran firing missiles at Israel in December of last year, Israel's actions in Gaza, and the Russia-Ukraine conflict. He points out that while there's an initial market reaction, the impact often fades after a short period unless the conflict significantly escalates. He notes that even the highest oil price in the last 15 years occurred only a week after the Russian invasion of Ukraine.

2. Jordy Visser does not view Bitcoin as a geopolitical hedge. He argues that Bitcoin's price is ultimately tied to economic factors, particularly the digital economy, and that it doesn't serve as a reliable safeguard against geopolitical instability. His extensive experience in markets over 30 years informs this perspective.

3. Jordy Visser proposes a "ven diagram" investment strategy focused on identifying companies or sectors that benefit from multiple overlapping trends. He uses Brazil as an example, highlighting its advantages in AI (due to rare earth minerals), its position in the evolving US-China trade landscape, and its importance in the global power and energy sector. He emphasizes the need for investors to focus on power and energy due to the anticipated increased demand from AI and potential supply shocks.

4. While Jordy Visser acknowledges the increasing interest in alternative data points like Twitter activity tracking pizza orders near the Pentagon (as a purported indicator of heightened military activity), he states he personally doesn't heavily rely on such methods. He prefers to leverage Large Language Models (LLMs) like Perplexity to process vast amounts of textual data (including earnings calls transcripts) into actionable insights, effectively turning text into real-time market data. He finds this approach more efficient than traditional alternative data sources like Bloomberg.

Other Topics Discussed

Beyond the questions above, the video covers several additional significant topics:

• The impact of the AI boom on various sectors: The conversation extensively explores the unprecedented demand for AI computing power, its implications for energy consumption, and investment opportunities in companies involved in AI infrastructure and related technologies. Specific examples include Oracle's strong earnings report and the exponential growth in token demand for AI applications.

• The US-China trade "deal": The discussion analyzes the complex dynamics of the US-China relationship, comparing it to a separation or divorce process, and assessing its potential impact on various sectors, especially concerning the exchange of high-end chips and rare earth minerals.

• The implications of the latest inflation data: The speakers discuss the lower-than-expected CPI numbers, the potential for rate cuts by the Federal Reserve, and the contrasting views on whether the economy is heading towards a recession. The video also examines the impact of a potentially softer labor market on the Fed's decision-making.

• The crypto market outlook, specifically Ethereum and stablecoins: The conversation covers the potential for a "short squeeze" in Bitcoin, discusses the relationship between Bitcoin and altcoins (particularly Ethereum), and explores the anticipated rise in stablecoin usage as a result of increased demand and adoption by major companies. The concept of "unicorn zombies" (overvalued companies) is used to describe the current state of the crypto market.