Are AI Chips the New Crypto Trade? | Markets Outlook

**Pierre Rochard** (0:00)
When we think about the four-year cycles for Bitcoin, I think a big part of that was the mining industry and its relative size to the market cap of Bitcoin. Now that Bitcoin's above a trillion-dollar market cap and the mining industry is shrinking, I think that ultimately this is going to lead to much better price discovery for Bitcoin and that those four-year cycles are going to transform.

**Jennifer Sanasie** (0:29)
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**Pierre Rochard** (0:41)
Jen, thanks for having me on.

**Jennifer Sanasie** (0:42)
Yeah, thanks for being here. I want to unpack some of the narratives that have been driving the industry lately, but I just want to ask you, I mean, what do you have your eye on? What are you watching as we head to the latter half of the year?

**Pierre Rochard** (0:56)
Really watching monetary policy. So what is the outlook for the Fed? What is sentiment about a interest rate hike or pause or even decrease?
So watching Warsh carefully, and then also watching the Treasury. We just saw an announcement about Besant trying to stabilize some of the longer term interest rates on US Treasuries because at the end of the day, Bitcoin is a monetary asset, and so we have to look at what monetary conditions are like to understand where Bitcoin is headed.

**Jennifer Sanasie** (1:30)
And what's your read on that? I mean, our audience is focused on on-chain markets, some new investors when it comes to crypto, when you're watching the Treasury, when you're watching the Fed. What's your read on where we're heading and how might markets react?

**Pierre Rochard** (1:43)
I think that we're heading towards monetary debasement, meaning that I'm very bullish on Bitcoin at this point.
There's structural challenges that really can't be easily fixed without more dollars entering into the system. And so that's really kind of the baseline expectation here. On my end is that the Bitcoin bear market, if it's not over, it's close to over. And really, I'd put odds on us entering into a new bull market in this year.

**Jennifer Sanasie** (2:14)
I ask almost every guest this, where do you see Bitcoin headed towards the end of the year? If you were to give me a prediction.

**Pierre Rochard** (2:20)
Yeah, I think that my solid base case would be 80K.

**Jennifer Sanasie** (2:23)
Well, we invited you on to the show to talk narrative.
And I did see your response to some commentary we saw from Mark Cuban recently. And I want to unpack that. Mark Cuban said recently that chips as an asset class will be the new crypto. Of course, a lot in the industry reacted to that. It is always interesting to see with these figureheads, these people who have large audiences across many different sectors have to say about crypto when we're both down and up. But just talk to me a little bit about your initial reaction to Mark Cuban's comments.

**Pierre Rochard** (2:57)
I think that first off, there is a kernel of truth in what he's saying. And today when we talk about tokens, for example, usually it's AI tokens that we're talking about, not crypto tokens. And so I think he's on to something.
There was a lot of disappointment with some of the investments made in ICOs and in blockchain where it didn't really pan out, or at least it didn't 10x where people thought it would be. Where I really disagree though is at the intersection with Bitcoin, where if we think about AI, AI is really a technology of abundance, and Bitcoin, its scarcity will continue. And so I think that if you mash those two up, Bitcoin's purchasing power is going to increase, and Cuban's comments are a little bit off in that regard.

**Jennifer Sanasie** (3:47)
Part of his point was about scarcity, the GPUs are hard to get, demand is insane, Wall Street's building futures markets around compute. And some people might read that and say, oh, I hear similar narratives when it comes to Bitcoin. Just talk to me about how we should be thinking here.

**Pierre Rochard** (4:04)
I think in the short run, he's right, in that to ramp up the production of memory chips, for example, the manufacturers have to be able to put in the capex, and that takes two to three years to get that additional capacity online and to be able to meet where demand is. And then when you think about where will demand be in three years, well, they might already be a step behind. So I think that he's right, there's short-term scarcity in a lot of bottlenecks in different parts of the AI stack, which is growing exponentially.