Dialogue with Wall Street strategist: AI-driven deflation accelerates capital flow into scarcity assets

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Source: Bankless

Compilation: Felix, PANews

Wall Street strategist Jordi Visser appeared on Bankless to discuss how AI is destroying software moats, reshaping inflation patterns, and pushing capital toward scarce assets, with Bitcoin at the core of this shift. The episode explored his argument that “AI is the new quantitative easing,” potential challenges facing the S&P 500 in the AI era, and more. PANews has summarized the highlights of the conversation.

Host: Last week, you said on CNBC, “I bet that the next time I come on your show, Bitcoin’s price will have risen significantly.” When do you plan to return?

Jordi Visser: I’ve told the producers that I won’t come unless the price has gone up, but I probably go about once every four weeks. The clip you saw, the full context is actually more about how the world is transforming, and that we’ll soon face negative real interest rates. When the next CPI data comes out in May, it will be very close to the breakeven point of real interest rates. The reason I briefly mentioned Bitcoin to her is that I spend most of my time working in traditional finance, focusing on AI stocks and how AI is disrupting macroeconomics, but ultimately all these will point to the same conclusion: this disruptive force is so immense that it will eventually reveal Bitcoin’s benefits. Part of this is AI’s physical limitations, which is also a current problem and part of the upcoming inflation.

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

Jordi Visser: Yes, this is not speculation but an inevitability. The digital economy has long been merging with traditional finance and old industrial sectors. Since the Manhattan Project, we’ve been able to foresee what technology would look like. Take Bitcoin as an example: Bitcoin’s market cap is less than $2 trillion, while the fiat system’s market cap approaches $750 trillion. For all Bitcoin enthusiasts, what you’re expecting is a re-pricing as the dollar shifts from one system to another. The US economy is currently worth about $30 trillion. Major growth sectors now are semiconductors, AI, robotics, etc. But these no longer rely on labor and manpower as they did in the past. So wealth distribution issues have been expanding since the personal computer era. AI has entered another realm, disrupting our last advantage over technology: our brains. Another advantage is our hands and mobility, which will also be replaced by humanoid robots. This labor-capital opposition is precisely what makes many people angry, leading them to think of digital currencies, decentralization, and breaking out of the system, and AI is accelerating this long-standing process. That’s why I say this is not a prediction but an inevitability.

The only question is whether Bitcoin will be the final outcome. But it has already been chosen by people. I always like to say that there are three things in the world decided by people and tested by time: gold, religion, and now Bitcoin. Maybe in the future, other assets will be chosen as stores of value in the digital economy, but so far, in terms of user acceptance and being the only recognized one, I believe Bitcoin is inevitable.

Host: You once said “Bitcoin is the purest form of AI trading.” For many listeners, AI represents intelligence, and Bitcoin represents scarcity. How are they connected? Why does AI favor Bitcoin?

Jordi Visser: Everything people own as a store of value will be disrupted by AI. Nothing you own in your lifetime is immune. Some disruptions have already happened; certain jobs have been replaced. Over time, if you own art, how do you know it’s authentic? And in the future, you won’t be able to distinguish real from fake online. For example, AI can now produce multilingual voiceovers and lip-sync videos of me at very low cost. So the line between real and fake will blur. The world is changing so fast that work and assets deemed valuable will lose their value. I think people don’t realize how fast AI is developing unless they use it daily.

Anything created in the digital economy based on code is being killed. Salesforce, Adobe, all those businesses with moats are rapidly being dismantled. So I believe we are in the most important phase for Bitcoin: it’s no longer seen as software or code, but as a scarce asset. Scarcity is valuable, just like DRAM, CPUs, silver, gold, and all those components. The question is, when will Bitcoin be more widely regarded as scarce? I believe that moment is coming soon.

Host: Does this explain the so-called “SaaS end times”? Every time Anthropic releases a new version or feature, those software stocks plummet 20% to 40%.

Jordi Visser: Exactly. People often ask me what the biggest risk is for investing in Bitcoin. The answer is usually quantum computing—people fear it will someday crack Bitcoin. For all software companies built on code, AI is their “quantum computer,” and this has already happened. People buy stocks based on the “ultimate value” of future cash flows. If in three years you can directly instruct AI via voice to write software, the future value of those software companies drops to zero.

Host: How does AI influence inflation and deflation? I hear you call AI the new quantitative easing (QE). What does that mean?

Jordi Visser: Past QE was to save companies during crises. AI as the new QE allows companies to continue growing while firing employees—at the cost of labor. Because AI greatly boosts productivity, it will make software and knowledge services cheaper, and in the future, physical services via humanoid robots will also become extremely cheap. This is a huge deflationary force.

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

Jordi Visser: Ultimately, deflation will win, but before that, we will go through a period of underinvestment in physical assets. As Huang Renxun said, we are shifting from a “bit” to an “atom” phase. Over the past 17 years, investments in smartphones and cloud computing have been mostly in software. But now, AI requires massive physical infrastructure: computing power (chips) and electricity.

We’ve turned the digital economy into our world—every appliance, every car needs semiconductors. To support AI, we are extremely short of copper, silver, natural gas, and power infrastructure. So you see a strange world: commodities are inflating, but services and wages face deflationary pressures.

Host: What does this mean for the stock market? Because companies are laying off workers and profit margins are rising, the stock market is at a historic high. Will this continue?

Jordi Visser: The stock market is a discount mechanism for the future. Silicon Valley understands the disruption happening best, so smart money is pulling out of those software companies that will be disrupted. I think in the next 10 years, the S&P 500 level might stay roughly the same, but the overall economy will double in size.

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

Jordi Visser: Exactly. Large public companies are least suited to survive in this deflationary world because they have huge, hard-to-cut employee costs and corporate cultures. Conversely, decentralized individual entrepreneurs leveraging AI can quickly monetize ideas. Big companies are too inflexible; entrepreneurs will take their profits.

Host: You wrote an article about “Bitcoin IPOs.” What does that mean?

Jordi Visser: It refers to situations where, when Bitcoin’s price nears a high, some so-called OGs sell for some reason. In my view, this makes perfect sense—like an IPO, you see SpaceX doing this too. SpaceX just announced that some employees can sell more shares than usual. The reason is that if your project was initially worth zero and now is worth $2 trillion, that’s a huge distribution of chips. New ETF buyers step in to take these chips. Like any company after an IPO, there’s a shakeout of chips. Once the shakeout is complete, the next breakout will be unstoppable.

Host: Is this cycle different?

Jordi Visser: The biggest difference is that this time, when Bitcoin peaks, altcoins don’t hit new highs like in 2021. Also, Bitcoin’s volatility has been decreasing (around 30%), making it easier for traditional ETFs and wealth managers to include Bitcoin in their private portfolios. Conversely, due to AI disruption, current tech stocks are now as volatile as former altcoins.

Host: Do you think Bitcoin’s bottom has already been reached?

Jordi Visser: Yes. I’ve analyzed data since the white paper’s release: Bitcoin’s 100% returns have all concentrated in a specific macro quadrant—when CPI exceeds the 3-month Treasury yield (negative real interest rates), and the Fed is holding steady or cutting rates. We will soon re-enter this quadrant.

Because we’ve created zero new jobs (excluding healthcare, even negative growth), the labor market is weak. Even if inflation remains high due to physical constraints, the Fed can’t raise rates; they have no choice but to bet on AI’s productivity gains. Also, Bitcoin is a global asset (e.g., Iran settling oil sales in Bitcoin), and many emerging markets will adopt it as a hedge against local currency devaluation.

Host: What about other crypto assets, like Ethereum and Solana? Are you optimistic?

Jordi Visser: AI has commoditized code and creativity instantly, shortening moats’ lifespans. I currently hold Ethereum and Solana, which perform well as network infrastructure and stablecoin platforms, even outperforming Bitcoin at times. But that’s temporary. Only Bitcoin has a true moat based on scarcity. In this world, Bitcoin is irreplaceable.

Host: Can you share what’s in your current “scarcity investment portfolio”?

Jordi Visser: Everything related to the underlying infrastructure and computing power needed to support the AI agent world. This includes memory and storage (Micron, Pure Storage), chip design and manufacturing (Marvell, Nvidia, Cadence, Synopsys), and the physical commodities supporting them (silver, lithium mines ALB and LAC, mineral resources in Brazil). If you want to know what to buy, give Huang Renxun’s speeches this year to Claude and ask which companies he mentions—those are basically insider-level investment tips.

Related: Latest Huang Renxun podcast transcript: Nvidia’s future, “AI doomsday,” corporate moats…