Author: Jordi Visser

The author is a professional investor with over 30 years of experience in traditional finance and macroeconomics on Wall Street. The views expressed in this article are solely those of the author and should not be considered as a basis for investment decisions, nor do they constitute any investment trading advice or recommendations.

As early as April 8, when tariff fears and the shadow of Liberation Day loomed over the market, I published an article titled "The Dawn at the End of the Storm." At that time, the S&P index had plummeted by 20%, economists were predicting a recession, and panic was spreading throughout the market. I pointed out that this self-induced sell-off would ultimately become an excellent buying opportunity due to artificial intelligence, and I predicted that six months later, people would realize that the current panic was excessive compared to the advancements in artificial intelligence.

Ultimately, things developed as I had anticipated. The market recovered, risk assets rose, the narrative around artificial intelligence accelerated, and people adapted accordingly.

By November, the Bitcoin market had become sluggish due to price consolidation and underperformance compared to stocks. I wrote an article titled "The Silent IPO of Bitcoin," pointing out that Bitcoin's frustrating consolidation, while other assets were rising, was not a sign of weakness but rather a necessary distribution phase. The old whales finally had the opportunity to release liquidity, methodically selling off to meet the substantial demand from institutional investors such as ETFs and corporate bonds. It was akin to the end of a traditional IPO lock-up period; the process was uncomfortable and torturous, but ultimately healthy in the long run.

Well, this consolidation phase has been broken. The dividends from the silent IPO triggered a deeper pullback, and stock prices finally began to retreat, with AI speculative stocks, which have a higher proportion of retail investors, leading the decline. I emphasized this point in my weekly video last weekend. This trend led to a slight decline in Bitcoin for the year. The cognitive dissonance that had previously frustrated the cryptocurrency community has now evolved into genuine bearishness and skepticism. The optimism surrounding "Liberation Day" seems like a distant memory. Discussions about the end of the four-year cycle have intensified. The sentiment that "Bitcoin has lost its upward potential" echoes on social media platforms like X, and even the supporters of "this time is different" are beginning to waver.

This year's decline has pulled the CMC Cryptocurrency Fear and Greed Index back to a low of 15, around the time of "Liberation Day." All hope seems to have been extinguished. For this reason, it is time to launch Part Two of "The Dawn at the End of the Storm." For me, the core idea of this story is akin to "Liberation Day." All assets are driven by advancements in artificial intelligence, and I will continue to argue that in the coming years, all investors will ultimately realize they have missed a significant story. And Bitcoin is the best interpretation of the artificial intelligence narrative.

In addition to being close in publication dates to the 2008 Bitcoin white paper and the 2009 Raina-Madhavan-Ng paper (the first research to prove that GPUs could accelerate deep learning by over 70 times, effectively igniting the modern GPU-driven machine learning era), both are part of exponential innovation that would not have occurred without each other.

Exponential innovation reduces the need for people to work in offices, or even eliminates the need to work entirely. Exponential innovation leads to unequal wealth distribution, forcing governments around the world to continue running fiscal deficits and driving up financial assets as a form of universal basic income (UBI). Today's UBI is not a government-issued check but rather a universal beta income: your wealth grows because the system has no other choice.

For those without assets, they will receive transfer payments as another form of UBI. This creates the K-shaped economy we are familiar with and leads to the anger of the majority, as the cost of living decreases, stemming from both concerns about employment and wage pressures due to reduced hiring, as well as inflation driven by government UBI. Bitcoin benefits from this upward spiral, closely related to risk assets, until artificial intelligence begins to consume capitalism and public markets. The combination of stablecoins and AI agents increases the velocity of money circulation, thereby reducing the demand for leverage; tokenization allows concentrated and idle assets such as real estate, private debt, private equity, and venture capital to trade freely around the clock, thus reducing the leverage that supports their prices.

As artificial intelligence develops, the deflationary pressures it brings will gradually become apparent. By 2026, applications such as AI drug development, autonomous taxis, and AI agents will drive up prices, as increased profit margins and intensified competition from commoditized intelligence will further elevate prices.

What is most captivating at this moment is that people once worried about Bitcoin not following the stock market higher during its rise, and now its performance finally aligns with expectations. As the stock market pulls back, especially those bubble-like retail AI concept stocks, Bitcoin also declines in tandem. The divergence that had puzzled everyone during the silent IPO period has disappeared. Bitcoin is once again trading as a risk asset, closely related to growth expectations and liquidity conditions. I believe this will create the necessary purchasing power and momentum to drive a new round of upward movement.

This means that looking ahead to 2026, I see the dawn once again: the light at the end of the storm is in sight. Just as the tariff panic in April created a buying opportunity for those who could transcend fear, this Bitcoin pullback—synchronized with the broader weakness in risk assets—is laying the groundwork for the next significant rise.

Why Bitcoin's Correlation with Stocks is a Positive

A long-standing misconception is that Bitcoin should trade independently of traditional risk assets. This notion posits that Bitcoin is digital gold, a means of hedging against risk, and is unrelated to the stock market. Therefore, if Bitcoin declines alongside stocks, it must indicate some sort of malfunction in the mechanism.

This is incorrect. Bitcoin is a risk asset. I have written on my blog: Yes, Virginia, Bitcoin is a risk asset.

Yes, Bitcoin has a store of value function. Yes, it is decentralized. But in terms of market psychology and capital flows, Bitcoin behaves more like a high-beta risk asset. ETF investors will allocate Bitcoin alongside stocks, and when they reduce portfolio risk, Bitcoin will be replaced by stocks. Retail investors will use the same funds for both cryptocurrencies and stocks. Even those who advocate for Bitcoin's depreciation will be more aggressive in accumulating Bitcoin during periods of strong economic performance and ample cash flow.

So, when the Nasdaq index declines, Bitcoin will also decline. When AI stocks are hit, Bitcoin will also be affected. This is not a flaw but rather a characteristic of Bitcoin. It is a rational response within its holder community.

This is why this is a positive factor: if Bitcoin is linked to risk assets, then Bitcoin's outlook is closely tied to the outlook for risk assets. This means that to understand Bitcoin's future, we need to understand the future direction of the stock market.

Let me tell you why I am extremely optimistic about the outlook for risk assets in 2026.

The 2026 Landscape: The Fusion of Fiscal, Monetary, and Artificial Intelligence

The market continues to climb under the weight of anxiety. Currently, this high wall is built upon concerns about an AI bubble, worries about an economic recession, and pessimism regarding cryptocurrencies. However, the situation in 2026 is promising.

Fiscal support continues. The Infrastructure Bill, the CHIPS Act, and the Inflation Reduction Act are not mere talk; they are multi-trillion-dollar spending plans that are creating real economic activity and bringing about deficits. This initiative, dubbed "One Big Beautiful Bill," aims to prepare for the midterm elections. Data centers are being built at an unprecedented pace. Semiconductor manufacturing plants are under construction. Power infrastructure is being upgraded.

The Federal Reserve still has room for easing. Currently, inflation is under control. Wages, housing prices, and oil prices have been under pressure this year, so as the effects of tariffs gradually manifest, inflation should remain stable relative to a weak labor market. Artificial intelligence is both a deflationary factor and a contributor to a weak labor market.

Artificial intelligence is on the verge of breakthroughs. The pace of AI development over the past year has been astonishing. We are about to see tangible, real-world breakthroughs that will undoubtedly capture mainstream attention:

AI Drug Development: The first drugs discovered by AI are nearing clinical trial stages. Once positive news emerges, the impact on healthcare and economic productivity will be enormous. As of now, the performance of pharmaceutical stocks in November has set the best record for the same period in 30 years. All pharmaceutical companies will compete to integrate AI into their R&D processes. Billions of dollars will flow into the AI healthcare sector.

Autonomous Vehicles: For years, people have said "five years from now," and now we are at a turning point. Waymo is expanding. Tesla's FSD system is continuously improving. Chinese companies are deploying autonomous taxis on a large scale. By 2026, as autonomous vehicles become commonplace in major cities, speculation about humanoid robots will flood the scene.

AI Agents and Productivity: AI agents capable of autonomously executing complex tasks will begin to appear across various fields, including enterprise software, customer service, and the creative industry. This will greatly enhance productivity and expand profit margins across the entire economy. AI makes every business more efficient, productive, and profitable.

Manufacturing is expanding. The construction of AI infrastructure is driving a revival in American manufacturing. After years of contraction, signs of recovery are emerging in the manufacturing sector. I believe that driven by the aforementioned catalysts, the Purchasing Managers' Index (PMI) will rise in 2026. Historically, when the PMI rises, cryptocurrencies, especially altcoins, tend to perform exceptionally well.

Bears will shout "AI bubble!" Perhaps. But the formation of bubbles often takes longer than anyone expects, and the increases are usually larger. The peak of the internet bubble did not occur when valuations began to seem crazy in 1997, but rather reached its height in March 2000, three years later. From the end of 1994 to the end of 1999, the Nasdaq 100 index (QQQ) rose by 800%. In contrast, the QQQ has risen less than 100% in the past five years. Compared to the internet bubble, this hardly qualifies as a bubble. If we are indeed in an AI bubble, it is merely in the early to mid-stages. The mainstream market has not fully embraced AI yet. At Thanksgiving, your relatives will not ask you about AI stocks. That will take some time, and I believe it will also happen with cryptocurrencies.

Bubbles require catalysts to burst, typically aggressive tightening policies from the Federal Reserve during periods of economic weakness. But the Fed has already completed its tightening. They may begin to ease monetary policy in 2026 rather than initiate a new tightening cycle. The typical catalysts are absent.

Bitcoin Catalysts for 2026

If risk assets perform strongly overall in 2026, Bitcoin, as a high-beta risk asset, should significantly outperform other assets. However, Bitcoin also has some unique catalysts that make its outlook even more enticing.

The Clarity Act. For years, regulatory uncertainty has hampered the development of cryptocurrencies. The Clarity Act, expected to be passed by the end of 2025 or early 2026, will provide a clear regulatory framework, define jurisdiction, and eliminate legal ambiguities, thereby preventing institutional investors from remaining on the sidelines. Groups, including some large asset management firms and pension funds, that have been saying "we are still waiting for regulatory clarity" will ultimately be permitted to invest. Compared to the upcoming situation, the ETF fund flows we currently see will seem trivial.

Tokenization is thriving. Major financial institutions are tokenizing government bonds, real estate, commodities, and stocks. JPMorgan, BlackRock, Franklin Templeton, and others are building tokenization platforms. This validates the feasibility of the entire cryptocurrency infrastructure and proves that blockchain is not limited to digital gold. As the scale of tokenization expands and idle assets begin to trade around the clock with lower leverage requirements, Bitcoin, as a neutral settlement asset, will increasingly highlight its value, akin to the TCP/IP of the digital finance realm (payment/payment protocol).

Stablecoins are accelerating in development. This is the most underrated positive factor. The proliferation of stablecoins is experiencing explosive growth globally, especially in developing countries. Tether and USDC are becoming the dollar payment channels for a significant portion of the global economy. When Nigerians receive USDC instead of naira, when Argentine businesses hold dollar-denominated stablecoins instead of pesos, and when cross-border payments are made through stablecoins rather than intermediary banks, the cryptocurrency infrastructure becomes an indispensable part of global commerce.

Stablecoins and Bitcoin are not competitors but rather components of a two-part system. Stablecoins serve as the medium of exchange in the digital economy, while Bitcoin acts as a store of value. As more activities and funds flow into the digital economy, Bitcoin's share will naturally continue to grow. You can think of stablecoins as the M2 money market of the digital world, while tokenization serves as the bridge to bring traditional fiat assets into this system. This will create powerful network effects: the proliferation of stablecoins will introduce millions of new users to the cryptocurrency space, and these users will ultimately need a long-term store of value for the funds they no longer use in stablecoins. Bitcoin will become their preferred choice. The network effects brought about by the growth of stablecoins will accelerate the adoption of Bitcoin in unpredictable yet undeniable ways.

History Repeats Itself

Decades of market experience tell us that initial lows are often retested. We saw this in April when the market bottomed out and then retested those lows before continuing to rise. This is a normal and healthy pattern, as the market builds support and flushes out weak investors in the process.

I expect Bitcoin's trajectory may be similar. We may have already seen a bottom, but it is likely that we will retest this low in the coming weeks. As the last few shaky investors capitulate, a new wave of selling may occur. Bitcoin might experience one final sell-off, leading to a brief decline.

If a retest occurs, it will present the best opportunity of the year. During the retest, smart money that missed the first bottom will get a second chance. A retest with lower volume and fading panic will further confirm that the initial low was indeed the true bottom. I will not wait for a retest. I believe that for both Bitcoin and stocks, now is a good time to enter the market while fear is prevalent and greed is low.

Bitcoin has been on a downward trend this year. While the original share (OG) allocation of the IPO has not yet been completed, some progress has been made. Bitcoin ownership is more decentralized than ever. Retail investors are generally bearish and taking a wait-and-see approach. ETF buyers are patiently accumulating. Meanwhile, those expecting Bitcoin to depreciate continue to systematically increase their holdings. Developing countries are steadily adopting Bitcoin as financial infrastructure.

At the same time, the outlook for 2026 looks very optimistic. Fiscal support continues. Monetary policy provides a tailwind. Breakthroughs in artificial intelligence will drive speculative activity and actual profit growth. Manufacturing is expanding. The Clarity Act has brought regulatory certainty. Tokenization is scaling up. Stablecoins are accelerating network effects.

Bitcoin is trading as a risk asset. Risk assets are expected to perform strongly in 2026. Therefore, Bitcoin is also expected to perform strongly in 2026.

The Dawn is Here

I always think back to Liberation Day. The S&P 500 index fell by 20%. Economists predicted an impending recession. People were panic selling. I said at the time that six months later, we would look back and find that the panic was unfounded. My judgment was correct.

I now have the same feeling about Bitcoin. Yes, this pullback is painful. Yes, market sentiment is terrible. The "Fear and Greed Index" has dropped to 15, matching the lows of Liberation Day. But pullbacks in a bull market always feel like the end of the world. This pullback seems to be different. They always make people feel that this round of rising has come to an end.

They always provide buying opportunities for those who can overcome fear.

In my trading career, I have experienced enough crises, such as the 1994 Mexican financial crisis, the 1998 Brazilian financial crisis, the global financial crisis, the COVID-19 pandemic, and Liberation Day, so I know well that although these moments are unsettling, they are far from as bad as they seem. One truth is evident: if you can overcome fear, these moments often hold the best investment opportunities.

Bitcoin has not collapsed. Digital assets will not disappear. Everything happening now is exactly what should happen: a maturing risk asset is still recovering from the winter of 2022. Currently, it is pulling back alongside other risk assets during a period of uncertainty and position adjustment. Unlike in April, this pullback is narrower, primarily concentrated in growth stocks and cryptocurrencies, rather than widespread market panic. This is healthier. It means the market is differentiating. It also means that when recovery comes, it may be stronger and more focused.

For those who can see the situation clearly, now is a good time to accumulate wealth. But not recklessly, not abusing leverage, and not with money you can't afford to lose. Rather, it is about being thoughtful, acting cautiously, based on fundamentals rather than emotions, and maintaining conviction.

AI-driven investments will yield excess returns, and market volatility will increase. Given the numerous challenges governments face in addressing this disruptive force, there will inevitably be some concerning moments in the future. Doubts will abound, and sensational headlines about crashes and bear markets will emerge. Please ignore these and focus on the fundamentals. Artificial intelligence is the most important and powerful innovation of our time, and it will bring a better future in the coming years.

When everyone suddenly realizes this, it will be too late to enter. Now is the opportune moment for cryptocurrencies, with the Fear and Greed Index at 15, as the crowd is panic selling and the tunnel remains dark.

Six months from now, just like Liberation Day, the narrative surrounding Bitcoin will be completely different. We will look back at these prices and the prevailing sentiment at the time and wonder why we ever had doubts.

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