원문 보기
Uh, we did not expect this much of a correction. It's still not as bad. It's about a 50% correction. It's still not as bad as we have seen in the past. Still, if there is a whale out there who's going to be forced to sell Bitcoin because, uh, he or she is so underwater and, uh, receiving margin calls from prime brokers.
We heard recently that, uh, that is indeed what has happened. Uh, that was a rumor. And if that is what has happened, uh, then I feel we're pretty close to the bottom. Over the past year, headlines have emphasized dollar weakness and the supposed erosion of American dominance. Many global investors interpreted early dollar softness as confirmation that US outperformance had peaked.
Capital rotated internationally. Gold surged. The debasement narrative gained momentum. Wood disagrees fundamentally. She argues that recent US policy actions, particularly tax incentives, deregulation, and pro-capital measures, mirror a modern version of Reagan era reforms. During the 1980s, under Ronald Reagan, the United States experienced a dramatic increase in return on invested capital.
The result was a surging dollar and massive capital inflows. Wood sees parallels toda. If we're right on what's going to happen here, that debasement trade is it is going to be wrong because the dollar is going to go up perhaps more dramatically than anyone expects. And all other things equal, that alone would drive the gold price down.
And I think this end of US exceptionalism concept being fed by the dollar's recent decline um misses this point that all of the policy actions in the last year are so positive for United States assets that I think the head fake is going to be the dollar going up as more foreign direct investment heads here and as more capital after this rotation comes back.
In terms of where we are in the cycle, well, because we didn't have the kind of soaring up cycle after the having, we did not expect this much of a correction. It's still not as bad. It's about a 50% correction. It's still not as bad as we have seen in the past, which was in the beginning down 95% and I think the last cycle was down 75%.
So maybe we've bottomed. I don't know. That's it's uncanny this four-year cycle, but we do have to wonder how much of this has been caused by the flash crash on October 10th, which um many people have have um wondered if I've been saying this correctly. We had the flash crash. Binance didn't cause it at all.
Uh there was excessive leverage, but Binance exacerbated what happened in terms of the deleveraging because of a software glitch that it had. Uh and caused a lot of auto deleveraging. Uh so, I think that unnerved many people and they're waiting to see still if there is a whale out there who's going to be forced to sell Bitcoin because uh he or she is so underwater and uh receiving margin calls from prime brokers.
We heard recently that uh that is indeed what has happened. Uh it that was a rumor. And if that is what has happened, uh then I feel we're pretty close to the bottom. The green light that regulators gave Bitcoin and the ETFs here in the United States, yes, was the beginning of institutional investment, but as institutions started learning more about Bitcoin, they learned about this 4-year cycle.
And so, my guess is there are a lot of institutions that have held back and are saying, "Uh let me see. Let me wait until the the dust settles and around this 4-year cycle and I'll pick my spots." Uh but they know they have a fiduciary responsibility, advisors do, asset allocators do, because Bitcoin is not correlated to any other asset class.
And gold? Well, it's interesting. Bitcoin, if you look um if you if you look since uh uh late 2019 to today, the correlation between gold and Bitcoin has been 0.14. Hardly any correlation whatsoever. But if you zoom out a bit, uh you can see the last two cycles were led by gold, uh not by Bitcoin. So,
we shall see. One of the most fascinating charts I've seen recently is um the market cap of gold to M2. Now, we we use US M2 because we can get those data back into the early 1900s. Um so, if you look at that chart, gold hit an all-time high 2 weeks ago relative to M2. There have been only two times that we're even close to it.
One was at the end of the '70s, early '80s, when inflation here in the United States was raging at a double-digit rate. And so, that was understandable, but that was the peak. And then, gold went down for 20 years. The price went down for 20 years. And then, the other peak was I believe it was 1934, the Great Depression.
And what was happening then was a deflationary bust. Money supply was collapsing. So, the denominator pushed it up dramatically cuz the gold the gold price was fixed back then. Uh so, that was a deflationary bust, and which defined the Great Depression. We're not anywhere near that. So, that's how extreme gold has become.
And so, I would say, if I were a betting person, and I am, uh uh uh as an investor, we have to It's not these are not uh bets without uh without being backed up by research, but um I would say the gold price has peaked. Uh again, famous last words. Uh if uh if there something goes wrong in Iran, I I could be very wrong.
But absent that, I really do think the gold price has peaked. Another topic frequently raised in crypto circles is quantum computing's potential to compromise blockchain cryptography. Wood addresses this directly. In ARK's research, particularly analysis led by chief futurist Brett Winton, quantum computing progress, especially at Google, is measured by qubit scaling.
Google has doubled qubit counts over 4 years. At that pace, quantum computing would not reach commercial viability until approximately 2064. Even if progress accelerates to Moore's Law-like scaling, commercialization might arrive around 2045. Quantum risk is real, but not imminent. Moreover, blockchain ecosystems are already developing quantum-resistant wallet structures.
Understanding the problem is half the solution. Proactive mitigation reduces systemic vulnerability. In big ideas, you can see a kind of a preliminary thought. In big ideas, and in a section called called the great acceleration by Brett Winton, our chief futurist, we show the progress in quantum that Google, which is at the bleeding edge of quantum computing, that Google has made.
And it has doubled the most important metric in terms of gauging are we ready for prime time. It has doubled the number of qubits in the last 4 years. That is slower than Moore's Law scaling, right? And if it continues at that pace, and typically technologies do continue at the pace you know, at which they start, then quantum computing is not going to be commercially viable
until 2064. If for somehow Google speeds this up to Moore's law, so twice as fast the progress, then we're talking 2045, I think, something around that time. Now, that doesn't mean you know, we should dismiss the quantum as a threat. We we need to take any new technology seriously or any new technology that in my career, practically since I'm going to say for the last 25 years, quantum has always been 20 years away, right?
So, here again we're saying 20-ish years away. So, nonetheless, we we shouldn't dismiss it and we do know that half of the solution to a problem is understanding the problem. And we're learning, okay, if you make a change in these OG wallets, so to an updated wallet, that will be quantum resistant. So, I think that's very healthy for the ecosystem to anticipate this.
We are not worried about quantum in the short term and that will be the gist of the paper. That that we're putting out in the next few weeks. Kevin Warsh is a hawk, so he tends to be very disciplined in terms of monetary policy. So, I think some people are saying, wait a minute, you know, he's he's going to be tougher than Powell.
Be careful. I actually think the stars are aligning perfectly for him Uh because if you look at inflation measures in real time, there's a measure called Trueflation. It measures in real time 10,000 items 24/7. And that measure of inflation peaked at 12% in '22. And it is now below 1%. And the traditional measures of inflation or the government measures of inflation tend to follow this measure of inflation.
So, I think inflation's going to break down well below 2% this year. And according to the official measures, and I also think real growth will accelerate with productivity a very important part of the real growth acceleration. The most potent anti-inflationary force out there is productivity. And so, I do believe, now consider the source, I've been saying this for a while, not understanding that the supply shock from COVID was going to last 3 years, and not understanding that President Trump would do another round of tariff increases bigger in his second term.
Uh but so, I've been saying what I'm about to say now for the last year. We think that that prices will move into negative territory in the next few years. So, the burden of proof is on us, but I'm so I'm happy that Trueflation has dropped below 1%. It's a natural rotation after such a valuation increase in the US.
How high is too high? Uh and so, I can see taking profits from the US and moving elsewhere where the valuations are much more reasonable. Now, one of the reasons I think this is happening is psychological. Many people took or were keeping track of the dollar last year and in the first half of the last year the headlines were screaming the dollar has had its worst first half since 1973 and the '70s were a disaster for the United States.
Now, we have a contrarian view on the dollar. We think that the Trump administration has created an environment much like Reaganomics did in the '80s. And what happened to the dollar in the '80s was it skyrocketed. And it was because the return on invested capital in the United States went up relative to that elsewhere in the world.
Why did that happen? Deregulation, tax cuts, pro-business policies, pro-capital policies. This administration is is Reaganomics on steroids. And so we think that the dollar is going to turn around and that will be the big head fake. Now, we've been saying this for the last half or of last year and into this year.
It seems to be stabilizing. We'll see what happens here. But, you know, I think many people in the rest of the world and even in the United States don't understand how profound the tax cuts were in the July 4th package last legislated and passed last year. And and the reason they don't know about it is the refunds are just starting.
So, any company that uh builds a manufacturing facility in the US and starts it before the end of 28 will be able to depreciate it completely in its first full year of service. And that's uh retroactive to uh the early part of last year. Uh so, we're going to see massive refunds both at the individual level and at the corporate level uh starting right now.
And uh I think that's going to turn the dollar. I think it is turning our economy. We're seeing some green shoots here. And I think people are going to be surprised. Cathie Wood's thesis is cohesive, even if controversial. She sees markets positioned for debasement, inflation persistence, and US relative decline.
She instead anticipates a stronger dollar driven by pro-capital policy, a potential peak in gold valuations, disinflation accelerating below consensus expectations, productivity-led real growth expansion, Bitcoin stabilizing as forced deleveraging subsides, and institutions position strategically, and quantum computing evolving far more slowly than alarmists fear.
At its core, her worldview rests on innovation. Technological acceleration, AI, robotics, blockchain, genomics, compresses costs, expands productivity, and reshapes capital flows. Investing in her framework is not about reacting to fear-driven narratives. It is about identifying structural transformations before they are widely priced.
Comments 0