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Bitcoin's Next Move Depends On One Fed Decision
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Crypto and macro investors tracking Fed policy impacts on Bitcoin.
TL;DR
Bitcoin's volatility is low relative to AI stocks, suggesting room for growth. A market deleveraging and AI midcycle slowdown are reshaping portfolios. The Fed's next decision could trigger Bitcoin's next move.
In This Video
- 00:00AI vs Bitcoin Volatility
AI volatility is near 100, Bitcoin at 30, allowing three times more Bitcoin allocation.
- 00:27Conversation Overview with Jordy
Discussion covers stock market deleveraging, AI slowdown, inflation, and crypto.
- 01:05Market Unwind and AI Slowdown
S&P hits highs while AI names decline due to a midcycle slowdown and leverage.
- 03:11Deleveraging and Volatility Surge
Gold, silver, and tech momentum see sharp drawdowns, raising volatility across strategies.
- 05:50Focus on Memory and Earnings
Memory stocks like Micron are key; companies beating earnings significantly will outperform.
- 07:49Open-Source Models and TAM
Chinese open-source models need hardware; AI's total addressable market remains enormous.
Questions & Answers
What is the AI midcycle slowdown?
It's a second derivative change where AI earnings decelerate from huge growth to slower growth, causing stocks to drop despite still rising earnings.
How does Bitcoin compare to AI in portfolio?
Bitcoin's volatility (V) is 30 vs AI's 100, so you can hold 3x more Bitcoin on a risk-adjusted basis, making it attractive for diversification.
Why are AI stocks falling despite good earnings?
They had huge runs (3-10x), pricing in future growth. Now earnings growth slows, so stocks correct even as earnings rise.
What is the deleveraging happening in markets?
Leverage is being unwound across retail, hedge funds, and quants, causing sharp drops in AI names, silver, gold, and Bitcoin.
Which AI stocks will recover best?
Focus on memory companies (like Micron) that still beat earnings significantly, not just by a little.
How does open-source AI affect the trade?
Open-source models like Kimi K3 need massive hardware, so they don't threaten demand for GPUs and AI infrastructure.
Key Terms
- V adjusted basis — Adjusting asset allocation based on volatility (V), allowing more of lower-volatility assets like Bitcoin.
- 200 day moving average — A technical indicator used to gauge long-term trend; crossing above it signals bullish momentum.
- Second derivative change — A slowdown in the rate of growth, not a decline, causing market repricing of high-growth stocks.