Dialogue with Wall Street Strategists: AI-Driven Deflation Accelerates Capital Flow to Scarce Assets

Compiled by: Felix, PANews

Wall Street strategist Jordi Visser appeared on the Bankless program to discuss how AI is destroying software moats, reshaping inflation patterns, and pushing capital toward scarce assets, with Bitcoin at the heart of this transition. The show explored his argument that "AI is the new quantitative easing," the potential dilemmas facing the S&P 500 index in the age of AI, and more. PANews collected the highlights of the conversation.

Host: Last week, you said on CNBC: "I bet that next time I come on your show, the price of Bitcoin will have risen significantly." When do you plan to come back?

Jordi Visser: I've told the producer that I won't come unless the price has gone up, but I probably go every four weeks. The slice you saw was more about the world undergoing a transformation; we will soon see negative real interest rates. When the next CPI data comes out in May, it will be very close to the breakeven point for real interest rates. I briefly talked to her about Bitcoin because I work most of the time in traditional finance, where most of the business revolves around AI stocks and how AI disrupts the macroeconomy, but ultimately all of this points to one place: this disruptive force is greater than people imagine and will ultimately reveal the benefits of Bitcoin. Part of this is the physical limitations of AI, which is also what we are currently facing and is part of the inflation that is about to happen.

Host: Do you mean that the long-term trends of the current market mechanisms are so immense that they will inevitably converge and culminate in assets like Bitcoin that possess similar properties?

Jordi Visser: Yes, this is not a guess; it is inevitable. The digital economy has long been merging with traditional finance and the old industrial economy. Since the Manhattan Project, we could foresee what technology would look like. Taking Bitcoin as an example: the market cap of Bitcoin is less than 2 trillion dollars, while the market cap of fiat currency systems is nearly 750 trillion dollars. For all the people who are optimistic about Bitcoin, what you are hoping for is the repricing of dollars as they transition from one system to another. In terms of the U.S. economy, the U.S. economy is now 30 trillion dollars. Among this, home builders are not a major part of the growth, nor are automobiles. The major parts of growth now are semiconductors, artificial intelligence, robotics, etc. But these things no longer rely on labor and manpower as they did in the past. So the issue of wealth distribution began to widen from the personal computer era. AI has entered another field; it has disrupted our last advantage in relation to technology: our brains. Another advantage is our ability to use our hands and move objects, which will also be replaced by humanoid robots. This labor versus capital opposition, one could say, is what makes so many people angry and think of digital currency, think of decentralization, think of breaking out of the system, and AI is accelerating this long-standing process. That's why I say this is not a prediction; it is inevitable.

The only question is whether Bitcoin will be the final outcome. But it has already been chosen by people. I always like to say, there are three things in the world that are decided by people and have stood the test of time: gold, religion, and now Bitcoin. Perhaps in the future, something else might be chosen by people as a store of value in the digital economy, but so far, in the sense of being accepted by users and the only one acknowledged, I believe Bitcoin is inevitable.

Host: You have said, "Bitcoin is the purest form of AI trading." For many listeners, AI represents intelligence, while Bitcoin represents scarcity. How are they connected? Why is AI good for Bitcoin?

Jordi Visser: Everything that people possess as a store of value will be disrupted by AI. Anything you own in your life is likely to be disrupted by AI. Some disruptions have already happened, and jobs of certain professions have been replaced. Over time, if you own art, how do you know it's real? And in the future, you will not be able to distinguish genuine from fake online. For example, AI can now create multilingual voiceovers and lip-sync for my videos at an extremely low cost. So there will no longer be a boundary between real and fake. The world is changing too quickly; the work and assets you consider valuable will lose value. I feel that people will only realize how fast it is evolving if they use AI all day long.

Anything in the digital economy based on code is being killed off. Salesforce, Adobe, all these businesses that once had moats are being rapidly dismantled. So I believe we are in the most critical phase for Bitcoin; it is no longer seen as software or code but as something scarce. Scarcity is valuable, just like DRAM, CPUs, silver, gold, and all those components. The question is when Bitcoin will be more commonly regarded as scarce? I believe that moment will come soon.

Host: Does this explain the so-called "SaaS apocalypse"? Every time Anthropic releases a new version or feature, stocks of those software companies plummet by 20% to 40%.

Jordi Visser: Exactly. People always ask me what the biggest risk of investing in Bitcoin is. The answer is usually quantum computing; people fear it will eventually crack Bitcoin. And for all software companies built on code, AI is their "quantum computing," and that is already happening. People buy stocks hoping for the "ultimate value" of future cash flows. If three years from now you can directly ask AI to write software via voice commands, the future value of those software companies will go to zero.

Host: How does AI affect inflation and deflation? I heard you call AI the new quantitative easing (QE), what does that mean?

Jordi Visser: Past QE was designed to save companies in crisis. As a new QE, AI allows companies to lay off employees while continuing to grow, which comes at the expense of labor. Because AI has greatly enhanced productivity, it will not only make knowledge services like software cheaper; in the future, even physical services through humanoid robots will become extremely cheap. This is a tremendous deflationary force.

Host: But that sounds like a paradox: since AI is such a powerful deflationary force, why do you predict we will face inflation above 4% in the short term?

Jordi Visser: Ultimately, deflation will prevail, but before that, we need to go through a "under-investment phase" in physical assets. As Jensen Huang said, we are transitioning from "bits" back to "atoms." For the past 17 years, our investments in the smartphone and cloud era have focused on software. But now, AI requires vast physical infrastructure: computing power (chips) and energy.

We have transformed the digital economy into our world, where every appliance and every car needs semiconductors. To support AI, we are facing an extreme shortage of copper, silver, natural gas, and electric power facilities. So you will see a strange world: commodities are experiencing inflation while services and wages are under deflationary pressure.

Host: What does this mean for the stock market? Because layoffs and profit margins are pushing the stock market to historical highs. Will this continue?

Jordi Visser: The stock market is a discount mechanism for the future. Silicon Valley understands the disruption happening best; therefore, smart money is pulling out of software companies that will be disrupted. I think that in the next 10 years, the S&P 500 might be at about the same level as it is now, but the overall economic scale will double.

Host: The economic scale doubles, but the S&P 500 doesn’t rise? Where does all that extra value go? Is it eaten up by super AI agents and super individual entrepreneurs?

Jordi Visser: Exactly. Large listed companies are the least suited to survive in this deflationary world because they have large, hard-to-cut employee costs and corporate cultures. In contrast, decentralized individual entrepreneurs utilizing AI can swiftly monetize ideas. Big companies cannot be as agile, and entrepreneurs will capture those profits.

Host: You wrote an article about the "Bitcoin IPO," what is that concept?

Jordi Visser: In fact, it refers to the situation where some so-called OGs sell when the price of Bitcoin approaches its peak for some reason. To me, it makes perfect sense, just like an IPO; you will see something similar with SpaceX. SpaceX just announced it would allow some employees to sell more shares than they usually would. The reason is that if the project you are involved in was worth zero at first and is now worth 2 trillion dollars, it creates a massive distribution of chips. New ETF buyers take over these chips. Like any company after an IPO, the chips will go through a circulation wash. When the turnover is complete, the next time it breaks out upwards, its momentum will be unstoppable.

Host: Is there anything different about this cycle?

Jordi Visser: The biggest difference is that when Bitcoin peaks this time, altcoins do not break historical highs simultaneously like they did in 2021. In addition, Bitcoin's volatility has been decreasing (currently around 30%), making it easier for traditional ETFs and wealth managers to include Bitcoin in their private wealth management portfolios. In contrast, due to AI disruption, current tech stocks are now experiencing volatile swings like altcoins used to.

Host: Do you think the bottom for Bitcoin has already occurred?

Jordi Visser: Yes. I have done data statistics; since the release of the white paper, 100% of Bitcoin's returns have concentrated in a specific macro quadrant: when CPI year-on-year exceeds the yield of 3-month Treasury bills (negative real interest rates), and the Federal Reserve is either on hold or cutting rates. We will soon re-enter this quadrant.

Because we have created zero net new jobs (excluding healthcare and even negative growth), the labor market is weak. Even if inflation rates are high due to physical constraints, the Federal Reserve cannot raise interest rates; they will have no choice but to bet on the productivity gains brought by AI. Furthermore, Bitcoin is a global asset (for example, Iran uses Bitcoin to settle oil), and many emerging market countries will also use it as a hedging choice to cope with currency devaluation.

Host: What is your outlook for other assets in the crypto market, such as Ethereum and Solana?

Jordi Visser: AI has commoditized code and creativity instantly, and the lifespan of moats has become extremely short. I currently hold Ethereum and Solana as they perform well as network infrastructure and stablecoin carriers in this phase, and may even outperform Bitcoin in certain periods. But this is only temporary. Only Bitcoin possesses a moat truly based on scarcity. In this world, Bitcoin is irreplaceable.

Host: Can you disclose what is specifically in your current "scarcity investment portfolio"?

Jordi Visser: Everything related to the underlying infrastructure and computing power required to support the AI agent world. This includes: memory and storage (Micron, Pure Storage), chip design and manufacturing (Marvell, Nvidia, Cadence, Synopsys), as well as the physical commodities needed to support them (silver, lithium miners ALB and LAC, and Brazil's mineral resources). If you want to know what to buy, hand over all of Jensen Huang's speeches this year to Claude and ask which companies he mentioned, that is basically a level of insider information investment guide.

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Dialogue with Wall Street Strategists: AI-Driven Deflation Accelerates Capital Flow to Scarce Assets

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