Money Printing, AI, and Crypto: Fueling an Epic Bull Market Mania - TOKEN2049 Singapore 2023

I'm between you and some food so hopefully we'll keep this shortish and you can help pump my bags and you know we can all go home happy so the title of this presentation is Double Happiness so I'm going to start at a macro level and talk about uh debt and Ai and then Zoom all the way down to the micro or I give a very very short chill of why I [ __ ] love filecoin all right so again to remind everyone this is sort of my broad crypto framework about what the value of crypto represents and that's Fiat liquidity and Technology now over the past uh over about a decade right we've had bull markets and one of the two of these factors whether it's Fiat liquidity or some technological aspect of the ecosystem that we're all that we all fall in love with for one to two years before we don't like it anymore and the [ __ ] [ __ ] goes down 99 so it's very rare we haven't had this yet where we get a bull market in both of these facets and I want to describe now why I believe the next Bull Run that I think will start probably now and into the early 2024 is going to be the biggest bull market and not only crypto but in Risk assets ever since the end of World War II and the Great Depression so at a fundamental level what is gross gross domestic product or GDP I took this from Raul Paul uh population growth productivity and debt I want to focus on babies so population and demographics and debt which is money printing which we're all very familiar with so very like a statement here rich people don't have a lot of kids there's various reasons for why that's happening but if you take a look at this amazing chart here we're actually going into a deficit of human population growth when you take a look at the developed economies and the very large economies of China Brazil and Russia and that presents a very big problem because at the end of the day we borrow from the future we build things today and we hope that we're going to fill up that growth with extra humans out there who are going to have economic activity so when you're not having enough babies who's going to power that growth to pay back the debt so what have central banks and governments come up with as a solution to the fact that as they've gotten wealthier and we left the farm and we went into our concrete shoe boxes called apartments and cities that we don't have enough kids so how do we keep GDP growth growing so that anyone who's issued debt or the banks that run the fractional Fiat Financial system can say solvent we print money and ever since 1970 this is a graph from the World Bank on global debt to GDP we've gone from 110 to 360 percent and the worst part about this chart is not just the absolutely horrendously High 360 percent but look at how we're accelerating it took us 10 years ago 100 increase it took us only two which is covet to go from 250 percent to 360 we are in the LA the late stages of a debt Doom loop on a Global Perspective every single country has their own specific reasons why their debt is unsustainable but at a global level we can see that we have accelerating debt issuance to compensate for growth that just is not there come on all right so to focus on the United States and you know a lot of my writing is on the US even though we're sitting here in Singapore again we're on a dollar standard most countries monetary policy is a reflection of what goes on in America so I do spend a lot of time talking about the Federal Reserve and financial policy policy so this is a very scary chart if you are a U.S treasury bondholder and this is basically the maturity profile of U.S debt um and what we can see here is that by 2026 the U.S has to roll over almost 8 trillion US dollars worth of bonds they have to find somebody who is willing to take this debt at whatever the prevailing yields are in the market now if you think about it if the whole world has this problem of we have too much debt and not enough population growth and the largest issue of debt has to issue eight trillion dollars how are they going to do it who's going to buy all this debt and if you want to think about you have China your Japan they also have the same issue and that that only does not account for the amount of debt that the government itself is needs to issue itself to fund itself so what do governments do when they have a bunch of debt that needs to be issued and nobody around that actually wants to acquire it at a yield that's affordable they print money and so if I think about the Fiat liquidity situation from a Global Perspective and and a U.S perspective as the reserve currency issuer this is going to be the biggest bull market and issuance of money that we've ever seen because this Market is the largest it's ever been globally and we just don't have the people here that want to buy this stuff at these yields all right so moving on from the Fiat side let's take a look at technology so what is the you know dominant theme today it's ai ai ai ai I was at a lunch yesterday um that uh pinga put on a bunch of you know Global asset managers family offices Auburn wealth folks and we all run around the table and we said what's our highest conviction idea or theme I'd say 75 percent of people mentioned something about AI this is the trend right in 2000 it was the internet's going to take over the world you know there's always a thing and when in 1929 it was radios it's been railroads like every cycle we all focus on some new technology that's going to completely change The Human Experience AI is no different because of how pervasive computers are and how fast we've upgraded human civilization since the Mainframe computer and internet has been invented you can understand why investors are so focused on what AI can do when their computers can think for themselves what can happen with our civilization right and so we have you know this chart here some you know tens of trillions of dollars of value that's going to be created by AI chat gbt right the the standout story of the last sort of six months fastest adopted piece of technology ever in human history right and this is the chart I'm sure there's other ones that show different pieces of technology versus chat gbt and it's a standout right it's why openai is worth so much money it's why all these startups are saying we're going to pull an llm model on some particular part of the economy and thus Drive savings and some sort of uh productivity increase for other companies using our product oh all right so what does that mean the AI stock of the moment is NVIDIA since chat gbt was launched as a thing that we could consume publicly Nvidia is almost up 200 percent and that's pretty astonishing given how large of a market cap Nvidia already was before this invention came out also I didn't put a chart up here but Nvidia trades at 100 times earnings which is absolutely absurd if you think about it on a five to ten year Horizon how much money does Nvidia have to make for it to grow into the valuation currently now some would say this is a bubble and I would agree but I think it's going to get even worse and even more ridiculous in terms of how much people are willing to pay in terms of price of our earnings for anything deemed AI so back to the formula we have a bull market in Fiat liquidity driven by no kids and a lot of debt we have a bull market in Tech driven by AI I've written a few essays trying to connect crypto and I Ai and at a fundamental level I believe an AI is its own type of economic unit and person if you want to personify it that does not care about human laws and regulations because the government which deals in violence cannot kill an AI yes you can try to eradicate computers and all that but that looks almost sort of eradicate the society in and of itself if you take away the connectivity that we have so I argue that it's almost impossible for a government a singular government to unilaterally punish an AI and therefore AIS will create decentralization and the base attributes that crypto offers so we put together these two bull markets I call it Double Happiness we're going to get Tech and Fiat as a reason why we should own crypto all right what does an AI need an AI needs compute power and an AI needs data storage these are the two things when I think about my portfolio and how I want to run Maelstrom my family office and we want to get into AI I understand that I'm already too late in the game to invest in some sort of startup that's coming up today I'm not going to get liquidity by 2026 or 2027 whether that's a token where I'm unlocked or it's in the IPO window because it takes five to seven years for a company to mature to be able to offer itself so I need to find things that can be used for these food groups today now I could just buy Nvidia at 100 times earnings [ __ ] that um or I could think about data storage and how there is possibly a crypto ankle so let's focus there so some of you in this room are VCS I wouldn't say that you're Muppets but the people who puts their money with you are probably Muppets um so what's gonna happen a bunch of VC firms are gonna go out there and see I'm gonna do an AI fund right because you need a new fund got to have management fees and all that kind of [ __ ] right and then they're going to turn around and they're going to see hundreds of billions of dollars into anything with AI on a pitch deck and then they start to get all this money what are they gonna do with the money they're going to go out and buy gpus and cloud storage right so if I don't if I want to profit off of the AI Mania I want to be where the money is going the money is going in these two food groups because without any of these things whatever AI solution you claim to offer is going to essentially be dead in the water here's a chart of estimated AI data usage up and to the right half a trillion dollar industry blah blah blah not very controversial here but why does AI need to centralize storage right should I guess by Amazon if if I believe that AIS are going to use a lot of data storage well what's from an ai's perspective they don't they're not human right and you have this organization and so you put your data with a centralized company which can shut you off because the government told it to can change its pricing whenever it wants because it's you know it's their data center they can abrogate a contract whatever they like what today are going to do is going to go go to court and sue somebody you know hire a human lawyer and like spend two thousand dollars an hour for a bunch of No Name Associates to go sue somebody it's not going to happen an AI is going to Crave from from a fundamental level a decentralized storage opportunity so now I need a [ __ ] coin I've got this macro uh thesis I want a listed token so I can buy it and sell it today I don't want to be locked up for months or years I want this scene to have completely [ __ ] the bed down greater than 90 from the 2021 all-time high why do I want that because I want protection right okay I want the most um motivated sellers to have already sold everything so that when this thing starts Rising potentially it has a lot of room to grow and from a low level it doesn't take that much of effort in terms of money coming in the system for this thing to go up 10 or 20x and that it needs to be related to an AI Food Group filecoin is just such a [ __ ] [ __ ] coin this thing is down like 99 [ __ ] percent from like 300 to I think it's a trading around three dollars uh right now but people are there is data on the falcoin network there are real clients and I'll talk about two of them in a second that are actually using this thing lots of room to grow AWS is obviously the buy and far out away the winner but they're a centralized solution there is a market for decentralized storage to grow into if the End customer values the things that the centralization brings to their data their data their protection all the things I talked about so I'm an investor in a file coin stealing platform called seal storage and they are helping bring institutional the large data users onto the filecoin network they have a project called Atlas which is a data project by CERN the um particle accelerator in Europe they are using seal to help them reduce their data costs and seals in turn earning foul corn rewards by putting this data on the network UC Berkeley is also using seal to do something similar um steel also has projects with NASA and a few other universities in in the United States so I have a minute left here I hope I've given a very short overview of why I think filecoin is going to pump uh and I'm still I've got bags that only do I have a mining bag I've got token bags hopefully you guys can help me pump them pump them further now before I finish I have two other public service announcements obviously I still am a board member and large shareholder of bitmex the derivatives exchange we just launched some prediction markets that clients can engage in some interesting uh if for net uh if then sort of uh bets on the market those just launched this afternoon and more importantly for your party health I hope to see everyone at the party tonight in Sentosa wear your best swim gear we're gonna have a [ __ ] Rave thank you everybody