The AI Crypto Bubble Is Coming

[00:01] The railroad bubble, the various crypto bubbles, the dot-com bubble, they all follow a very specific playbook. A new technology appears, people vastly underestimate it, prices start moving before the masses believe, and then when

[00:13] liquidity finally shows up, the mania begins. And I think we're seeing that pattern play out right now. Only this time, I don't think that the mania is going to be in, you know, various AI stocks. I actually think the vast

[00:25] majority of wealth is going to be generated in AI crypto. And that the reason we haven't seen this category really explode upward yet is because macro hasn't yet given it permission. We haven't seen the conditions present in

[00:37] order to have a bubble like we've seen in the past, but if I'm right and we're about to see liquidity turn the other direction, this could become one of the biggest money-making opportunities of our lifetime. And to show you exactly

[00:49] what I mean, I compiled 230 years of different bubbles and the data and conditions around those bubbles to show you the pattern that plays out literally every single time we have a big leap forward in technology. And basically

[01:01] that pattern is every time you have that sort of real innovation and it meets any sort of loose macro conditions, you get a lot of retail mania and speculation around that category where people start bidding up all these garbage stocks, all

[01:16] these garbage opportunities, and people make vast fortunes speculating on those seen this time and time again with Terra Luna, uh with EOS, Neo, Harmony One, all these crazy crypto tokens. Some of them

[01:29] they ended up collapsing, their prices have gone down vastly from 2021 heights. But during the actual bubble period, Some people made hundreds of millions of

[01:41] and then just selling before the bubble was over. And there are five phases of despite, you know, whatever the mania is, it plays out literally exactly the same every single time. First, you have a new genuine technology arriving, few

[01:55] people understand it, almost nobody owns it. Retail thinks this could change winners emerge from that category. A handful of legitimate businesses prove the model. They become household names. Retail thinks people are getting rich.

[02:08] copycats appear. We're going to be the next Bitcoin. We're going to be the next Ethereum. We're going to be the next Amazon. Stage three is the FOMO spreads. News spills past financial pages into

[02:20] culture, cab drivers, podcasts, group chats, etc. Retail thinks I missed the leader, so I need the next one. Low-quality names explode and go vertical on basically no news or, you know, fake partnerships and all kinds of

[02:32] nonsense. Stage four, proxymania. Anything thematically adjacent re-rates. business. Retail thinks anything related to this trend can moon. If you remember the metaverse in 2021, Meta or Facebook

[02:46] ended up rebranding themselves to Meta, and then all these metaverse crypto projects just started popping up all over the place. And anything that was skyrocketing. And then stage five is collapse. Liquidity dries up, margin

[02:59] calls cascade, the wrappers detonate first, survivors get bigger. Retail thinks it was all a scam, and most of the garbage just dies off. Now, in order for these bubbles to happen, there are three ingredients that have to be

[03:12] lot of people are missing right now. The first piece that needs to be present is some sort of technology that's actually innovative and actually, you know, going genuinely new technology arrives, it changes how things work, the economics

[03:26] underneath are real, and that's exactly why the bubble can form on top of it. Examples would be canal mania, railroad mania, electricity, radio, automotive, internet, crypto, AI, etc. The second ingredient is you need loose macro. And

[03:39] this is a really important one. This is the fuel for the bubble. Growth or recovery, abundant liquidity, cheap or easy credit. Two of the three is usually enough, and history shows the form changes by era. Canal mania was run by

[03:52] bank credit, rail and radio were margin lending, auto was consumer financing, dot-com was VC plus IPO windows, crypto was QE plus zero rates. You have to have loose macro conditions in order to fuel the bubble mania. And I want to pause

[04:07] we are today in terms of macro conditions because this is the point I showed this chart a couple weeks ago. This is the last 13 years of cycle conditions and you can see the last few manias or the last few bubbles that have

[04:22] happened over the last decade or so. You saw in 2013, the Bitcoin bubble where the macro conditions were pretty positive. You saw the 2017 crypto ICO mania and again macro conditions were really positive. You saw the 2021 crypto

[04:37] were really positive. And since then, because of the craziness that happened in the 2021 everything bubble, which if you remember 2021 wasn't just crypto, it was stocks, it was real estate, it was

[04:49] skyrocketing in 2021. That's why it was called the everything bubble. After the everything bubble, everything collapsed and then just sort of stayed flat. And it's been flat ever since. We haven't had since then positive macro conditions

[05:03] to fuel another bubble. Meaning since then, we have had a real innovation emerge in AI. But we haven't had the loose macro conditions in order to fuel that bubble in the way that we've seen in past bubbles. And basically until you

[05:16] start to see macro conditions improve and really start to move higher, the and can never really take off. And the third ingredient, the fire, is retail FOMO. This comes after loose macro conditions. The leaders look too

[05:29] expensive, retail rotates into smaller, cheaper, more explosive proxies. The real thing and stays up longer than skeptics expect. If you've been in crypto again, you've seen that this process play out many, many times. And

[05:42] the bubble formula is real tech plus loose macro plus retail FOMO equals that I'm really focusing on and I've talked about this before in past videos. genuinely changes the world. You have a small handful of companies and assets

[05:55] that capture the long-term value. And then underneath that you have a just a massive layer of copycats, weak rappers, speculative shells, and vapor projects that end up exploding in value as people look for the next great opportunity.

[06:09] have on my list. This was back in the early 1800s. It had a bunch of garbage investments that duped all of retail, including things like the Grand Junction including things like the Grand Junction Canal, which went up 372% in 1 month.

[06:23] That's the equivalent of if in 1 month Bitcoin skyrocketed to $363,000. You had Railway Mania, which is a classic bubble. Again, had those macro tailwinds present in order to fuel the bubble. And then just an entire layer of

[06:36] garbage and copycats and all sorts of things that did really, really well while they were around. You know, for some people, they made a fortune off of these things. But then obviously all eventually collapsed. You had Insull and

[06:48] electricity, which is another type of crypto bull run, another type of dot-com tailwinds. They had a ton of garbage investments that ended up duping a ton of retail. You had the invention of radio, same exact story, same exact

[07:02] thing. You had of course the infamous dot-com bubble, which a lot more of us And basically any company that put dot-com at the end of their company, next great thing that they're going to be rich. In the same way that in 2021

[07:14] thought it was going to be the next Ethereum or the next Bitcoin. Same thing, a lot of scams that ended up going nowhere, a lot of companies just adding dot-com rebrands to their company in order to get a boost in the stock

[07:26] market. And then of course many of us are familiar with the multiple crypto single one of them has corresponded with strong macro conditions. Some of you guys might remember BitConnect from the 2017 days if you're around. I'm sure a

[07:38] which was absolutely insane. I actually made a lot of money on Terra Luna. EOS are so many other ones. There are There are literally thousands upon thousands of crypto tokens that have gone from zero, done a 100 X

[07:52] or 1,000 X or 10,000 X or to some even more, only to, you know, fully round going somewhere with all this. I just want to really highlight how similar all these bubbles are and how they all play out literally exactly the same way over

[08:07] 230 years, which means it'd be crazy to expect AI to not play out the exact same way, especially because the cycle is compressing. The cycle between these bubbles has been compressing over the last 230 years. You can see this is the

[08:21] canal bubble. This is the railway bubble. This is the roaring 20s and then two happen to be close together. Dot-com, Bitcoin 2013, crypto ICO 2017, notice the vast majority of bubbles are really heavily clustered towards modern

[08:38] times. And that the time between bubbles has been accelerating over the past 230 reasons for this. One is that we've gone from physical to digital. You used to stuff in order to create these scam companies. Now you can literally just,

[08:51] you know, spawn a ticker and like a a website, and people believe it's real. accelerated. You used to have to get your news in newspapers. Now you can get lot of work in order for retail to actually get access to these things,

[09:04] Now most people have direct access to all these things and all sorts of financial tools that they didn't have access to in the past. And along with supply limit. Only so many railroads could be chartered, etc. But today every

[09:17] tradable wrappers, stocks, micro caps, SPACs, ETFs, options, tokens, NFTs, DeFi farms, launchpads, pre-sales, derivatives, etc. And lastly, and maybe used to be that crashes scarred a generation. Pre-1971, when we were on

[09:33] decades of caution came after a crash. So you had the Great Depression, the stock market crashed, and it really just destroyed people's lives, destroyed the economy, etc. Post-2008, though, rate cuts, QE, liquidity facilities, and

[09:47] from happening. Anytime you have a crash, the government steps in and says, things to make sure this crash goes away, smooth it over." And they actually end up fueling the next bubble by their policy response that they end up doing

[10:01] to clean up the previous bubble's collapse. Basically, every past bubble that's even bigger. And then when that one explodes, that one gets cleaned up that are going to create an even bigger bubble, etc., etc. And what makes this

[10:15] figured this out. So, most people now know that when something crashes, the means that basically this crash is just an opportunity to buy the dip. And I did thought was really interesting going through this data, and that's that the

[10:28] Roaring Twenties is really, really similar to today in that the Roaring bubble where you had electricity, you had the radio, you had automobiles, and crisis, which was kind of bumping up against the Roaring Twenties, which was

[10:43] just this period of tons of financial stimulus in really, really positive macro conditions that allowed a lot of these bubbles to end up forming. And you had the Great Depression, which this period of unprecedented just depression,

[10:57] which was just like complete economic destruction that came after this. That kind of the consequences of this period of, you know, abundance came this period of lack. it's really interesting because after 2021, we sort of have had maybe

[11:10] something that rhymes. In that before 2021, you had these waves and rhythms of ups and downs. And after 2021, because things got so out of hand, you had this can see it in charts, but you can also just see it like looking around. Like if

[11:24] etc., you know a lot of people are having a hard time. You can see this in like the election of Mondami in New York and this kind of rise of socialism all over the US, people feeling like things are so unfair, they're just struggling

[11:36] we had this kind of period of abundance post really what you could probably say is 2008 when QE was basically invented and and we started pumping all the stimulus into the economy that culminated in 2021 that

[11:50] now we're kind of sort of paying for in this, you know, over the last 5 years within many ways a stunted economy outside of AI which obviously AI has been its own little bubble forming which is exactly my point in what I'm talking

[12:04] said, I believe what's coming next is the AI bubble. I actually believe this is going to be one of the biggest bubbles of all time and the reason I believe that is a a couple different things. One, we got to reaccelerate post

[12:17] period that we've been in. So, that requires a lot of mac macro stimulus and towards the economy today than they I number one issue when it comes to the election, midterms, etc. People want to

[12:31] to stop feeling poor. And so, I believe you're going to see an unprecedented uh happen. But two, AI is probably the most transformative technology we'll ever see combine those things together, as soon as those macro conditions are present,

[12:45] you're going to see an AI bubble of the likes of which we've never seen. Like I bubble, any crypto bubble we've had. I think it's just going to be absurd and I innings of that. Obviously, we've had a lot of funding in AI already. We've had

[12:59] centers, etc. I I believe that's just early game. Uh we have not any sort of mania as far as retail, etc. We've had little pops here and there but nothing widespread, nothing comparative to, you know, some of those past bubbles. And

[13:13] are saying we're in an AI bubble last year and now all these companies are very clear that like these companies are fine. They're going to be able to support themselves and that the spending and party will continue for quite a bit

[13:25] is so real that it will attract one of the largest speculative bubbles ever step one. The innovation category has already been lit. We have models, agents, robotics, inference, economics, and improving in public. The macro piece

[13:38] of the puzzle has not yet started, and the retail FOMO has not yet started. But, when the retail FOMO phase shows up, I believe all of the AI garbage plays, or at least the vast majority of the AI garbage plays, are going to be on

[13:52] crypto rails. This is just the natural resting place for for these kind of plays. And I believe retail is going to go bananas investing in AI crypto tokens. And I think that's going to be things like AI agent tokens.

[14:06] We've already kind of seen that. Proof of inference, decentralized AI, DAI, compute marketplaces, data labeling, model ownership tokens, AI DePIN protocols, AI launchpads, presale platforms, AI influencer, AI MPC, AI

[14:19] meme tokens, tokenized OpenAI killer L1s, on-chain rag, training data networks, and all sorts of crazy stuff. And it's going to go just like all past bubbles have gone. They're going to say, "I missed Nvidia. I can't buy OpenAI.

[14:32] Microsoft is too big. I need the next one." And although I believe, just like with crypto in 2021, just like crypto in 2017, just like the dot-com bubble, the vast majority of these things are going to be trash. They are going to be scams

[14:44] or just really stupid things to invest money into. I do believe that bubbles opportunity of all time, and that there's going to be a lot of those plays that ultimately end up crashing down to zero. But, in the middle in the middle

[14:58] fortunes. And those are going to be opportunities that I personally am not be like, "Oh my gosh, this is really gosh, this is going to really be the next Nvidia." You know, some of these

[15:11] things could be really transformative. And I'm sure, like, a very, very, very that's how it always is. There always is an Amazon, Google, etc. But, the vast And so, you have to just be real with yourself that the goal isn't necessarily

[15:25] to ride these things over the next 20 years. The goal is to ride them up the bubble and then exit while it's safe. You know, while everyone else is telling you you're an idiot to sell, etc. That is the goal of riding up a bubble. And

[15:38] so that means you could be investing in something like Neo. Neo was one of those put in 100 bucks and it turned into, you know, a couple hundred grand back in 2017. Nobody knows what Neo is today. No nobody talks about Neo as a blockchain

[15:51] that turned $100 into a couple hundred grand and sold regret having invested in that? The answer is no. Like they they don't care that it's able to take that opportunity and make money while it was an opportunity

[16:05] today. I believe we're heading for a arrived when macro conditions are present. And I believe although the vast majority of these investments will be absolute trash, they will present a

[16:17] massive wealth building opportunity to those people who show up early, invest in those things early, and ride the wave up, and then are kind of saying enough to sell before things get too out of control and they lose all their money.

[16:29] entire portfolio or you want to see every time I buy and sell various tokens, as well as different weekly video market updates, uh currently the waitlist in the description of this

[16:41] to do anything with your money. I'm clearly not your financial advisor. This think's coming next and what I'm doing with my own personal money. If this videos like this, make sure you hit that subscribe button and the little bell

[16:55] release a new video. Thanks for watching and I'll see you next week.