AI Shock Spares Bitcoin, Wall Street Moves On-Chain, and Leveraged Crypto ETFs Explained

**Jennifer Sanasie** (0:00)
On today's Public Keys at the New York Stock Exchange, a Chinese AI model rattles the chip trade. DTCC brings tokenized securities live, and we break down the first ever 2X leverage spot Bitcoin and Ether ETFs. I'm Jen Sanasie, let's get into it.
Happy Monday, everyone. Joining me to set up the week is Chief Investment Officer and Founder of FedWatch Advisors, Ben Emons. Hello.

**Ben Emons** (0:27)
Good morning, Jen. Good to be here.

**Jennifer Sanasie** (0:29)
Good to have you here. I heard you're a Spain fan, so you are happy this morning?

**Ben Emons** (0:34)
I am happy, you know? This is like Spain, everything on the sun is the slogan if you go on vacation there. So it's a good slogan, you know? That was a good game.

**Jennifer Sanasie** (0:41)
I became a Spain fan just last week, so as a fair weather fan, I'm very happy this morning as well.
All right. Let's set up this morning last week an AI model from China. I just mentioned it in my intro there, intensified to sell off in chip stocks on Friday. Just talk to me a little bit about what happened and what you're making of it. Yeah.

**Ben Emons** (1:02)
I think what really happened is that people realize that these models are as good as Claude or as good as Gemini, any of that, but the price is less than a third. So it's just that price competition narrative that comes into this space. And because the AI boom has been all about gap action spending and we have to yet see the return if the price of the actual AI starts to decline because of competition, the margins in the future will be lower. I think that is why markets reacted so negatively.
These companies will spend way too much and therefore they have to potentially stop that spending or do cost reductions which again affects margins. I think that was the story.

**Jennifer Sanasie** (1:42)
Markets reacted negatively but Bitcoin hardly budged. I think there was a little reaction. We're back at around $64,000 this morning. How are you looking at the AI trade in correlation to crypto?

**Ben Emons** (1:54)
So they're actually non-correlated as you mentioned. Like it is not really the case currently.
Obviously the Clarity Act is hanging in the Senate and as I think related to the Save America Act as a political issue, I think that's really depressing the Bitcoin price or put it into hibernation in this low level. And then if there is any liquidity effect in markets like over the weekend you got a bit of escalation and Bitcoin went a little bit down, that's kind of standard. It's not related to AI at all. And I think if AI trade sells off more, there will be pressure on Bitcoin but there's no profit-taking trade there. The profit-taking will take place in the memory stocks, in the chip stocks that people want to get out, especially if they're levered, which is commonly now, most people are levered in that space.

**Jennifer Sanasie** (2:38)
Yeah, no real correlation between AI and crypto, but a little bit of a capital rotation that we saw. We saw money flowing out of crypto ETFs into some of these AI trades. I saw this morning HUT8 is up as much as 14 percent on the news that they have a 15-year lease for its next data center.
Just talk to me a little bit about how you're watching the crypto companies, specifically the miners that are pivoting into AI. It seems like this is a successful pivot for most of these companies right now.

**Ben Emons** (3:13)
Yeah, I think it's an important macro factor because I always thought of it like taking another idea of this.
If blockchain gets implemented, say here, everywhere, and combined with AI, we are having 24-hour, seven days a week, super-efficient, tradable markets in anything, right? That's the power, I think, of the crypto market, that's why there's value there. Now, to these particular companies, they're an analyst exactly on all of them, but I guess any one of them combining the two, people have always looked at crypto like this is a payment efficiency, cost reduction of payment, so to speak. That's what it originally was. So AI obviously makes it only more efficient. That's, I think, why these companies potentially have a lot of upside potential from here, yeah.

**Jennifer Sanasie** (3:58)
We all remember that DeepSeek moment in 2025, and I know you wrote that this is different than that moment. Talk to me a little bit about what's different this time around.

**Ben Emons** (4:07)
Yeah, this is more about amplification of what's already been happening. DeepSeek was the first moment of like, wait a minute, China is actually much more competitive than we thought, and they're far more advanced. This Moonshot that came out on Friday, this new model, yes, it's as good as Colorado Closer, but not exactly. It takes a lot of tokens, right? So it's like shows that there's a fair bit of like efficiency there. But it's really again, back to price, like China is just very good at competing in price in anything. Whether it's AI, whether it's with BYD cars, or it was with Rare Earths in the past, that's what China is about. I think again, I think that's overshadowing the psychology going into this week, which is a big important earnings week. You know, Google, Intel, IBM are all reporting.