How Bitcoin Can Be Killed For $8 Billion – Duke’s Cam Harvey

**Scott Melker** (0:00)
Everyone keeps asking why the recession that was promised never came, why Bitcoin is still so volatile, and what the next real use case for crypto actually is. Today, I'm talking with Campbell Harvey about all of it. The yield curve.

**Campbell Harvey** (0:11)
The yield curve tells us something about what's expected by the market. And I believe that there is good news ahead.

**Scott Melker** (0:20)
AI-driven productivity.

**Campbell Harvey** (0:21)
So we've not really seen the impact of AI yet. This is just the tip of the iceberg in terms of productivity.

**Scott Melker** (0:30)
Bitcoin versus gold.

**Campbell Harvey** (0:32)
My paper makes the case that Bitcoin is not a substitute for gold. So some people say, oh, well, Bitcoin's digital gold, dot, dot, dot.
It is not a substitute. It's better to think of it as a compliment.

**Scott Melker** (0:49)
Tokenized real-world assets, stable coins, and why crypto may become the payment layer for AI agents.

**Campbell Harvey** (0:54)
Agents need to be able to transact 24-7, not during banking hours. They need a way to do transactions cheaply and securely. All of this invites crypto.

**Scott Melker** (1:09)
This one goes way beyond price charts. It's about where markets, money and technology are actually headed next. Would you rather hold Bitcoin, gold or tokenized assets in the next cycle? Let's go.
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And if leverage is more your thing, CalShe's got regulated perps too. Either way, it's fully regulated. Head to CalShe and use code WOAS. Trading carries risks, perps use leverage so you can be liquidated, not financial advice, offer subject to CalShe's terms. Cam, we've spoken quite a few times over the years. This is the first time when I feel like markets are completely broken.
And it's very difficult to project what comes next. The recession that was promised has effectively never come, I guess, depending on how they define recession and what metrics you look at. And markets seem to continue up no matter what. My friend, Matt Hogan, made a joke that recessions are now illegal.
You've obviously done quite a bit of work on the relationship between yield curve and recessions. How do you view what's happening right now?

**Campbell Harvey** (3:09)
So I'm actually very positive. Deald curve tells us something about what's expected by the market. And it has been a remarkable indicator over the last 60 years, with a very good track record. And when it's normal, so the slope is upward, meaning short rates are lower than long rates, that's good news.
And right now, we're in that phase. And I believe that there is good news ahead in terms of productivity increasing. So we've not really seen the impact of AI yet. So this is just the tip of the iceberg in terms of productivity. The US in particular is in the driver's seat.
I will say as usual, but it is kind of surprising that it's still in the driver's seat in terms of this innovation. So I do think that with this surge of productivity, this will lead to surprisingly higher growth.

**Scott Melker** (4:22)
I tend to agree. I'm just curious your thoughts on why we didn't get a recession that seemingly was being projected for all those years.

**Campbell Harvey** (4:30)
So there are many different reasons for that. So the yield curve did invert, and when that happened, it was different than previous inversions.
Because previous inversion, people just ignored.
It was only after the global financial crisis that people realized that, oh, the yield curve inverted before the global financial crisis. So maybe there's some information in it. So when it inverted in late 2022, people noticed, and they took actions. So think of this as, are you going to make a major capital expenditure that is financed with debt in the face of an inverted yield curve? Like, no way. So it actually changed behavior. So in the past, my indicator, you saw it and it gave you some advanced warning. However, recently, given all of the attention paid to it, it changes behavior.