Investors should wait for Bitcoin (BTC) to break back above its 200-day moving average (currently near $70,000) before entering new long positions, as the asset is currently in a sentiment-driven "capitulation" phase. While NVIDIA (NVDA) and Micron (MU) face a mid-cycle slowdown, the $90 trillion hardware infrastructure opportunity remains intact; look to buy MU on pullbacks to its 50-day moving average for a potential Q4 recovery. Shift focus toward the "application layer" by targeting companies like Eli Lilly (LLY) and Travelers (TRV), which are using AI agents to drive productivity and improve profit margins. As tech volatility remains extreme, diversify into Banks and Healthcare to benefit from a "broadening out" of the market beyond high-growth software. Maintain a hedge in "outside the system" assets like Gold, Silver, and Bitcoin to protect against potential AI-driven cybersecurity shocks or shifts in Fed policy.

Bitcoin (BTC)

• Bitcoin has faced significant headwinds recently, including being lumped in with "software code" trades and losing its status as the primary "beta" play for tech as investors moved directly into AI and memory stocks. • The asset is currently experiencing a "capitulation" phase where retail interest is low and 60-70% of existing holders are questioning their involvement. • Jordi Visser notes that Bitcoin has recently made new lows (relative to February) but is showing technical "divergences" that suggest a bottom may be forming. • A key technical level to watch is the 200-day moving average, which is currently north of $70,000. Visser suggests not "playing on the other side" (going long) until it breaks back above this level.

Takeaways

• Bullish Catalyst: If the "easy money" in AI slows down and volatility in tech stocks remains at extreme levels (80+ vol), institutional money may rotate back into Bitcoin due to its relatively lower volatility. • Macro Alignment: Weakness in the labor market and a potential shift toward a more "dovish" Fed (lower interest rates) would be highly positive for Bitcoin in the second half of the year. • Sentiment Indicator: The current "give up" phase and lack of interest from new investors are often contrarian signals that the market is nearing a cycle bottom.

Artificial Intelligence (Infrastructure & Chips)

• The market is entering an "AI mid-cycle slowdown." The "easy trade" where everything related to AI goes up is likely over. • Micron (MU) and NVIDIA (NVDA): While earnings remain robust, these stocks are seeing "multiple compression," meaning investors are less willing to pay high premiums despite good news. • Memory Bottleneck: Memory (HBM/DRAM) remains the most critical physical bottleneck for AI. Visser believes the shortage will last for years because "IQ requires memory" to retrieve and connect data points. • Compute Shortage: There is an "insatiable" demand for compute that cannot be solved quickly. Even with new energy solutions, the physical build-out of data centers is lagging behind demand.

Takeaways

• Investment Strategy: Expect a "volatile consolidation" for the next three months. Stocks like Micron may pull back to their 50-day moving averages before making new all-time highs in Q4. • Hardware Focus: Do not "fade" the hardware. The physical infrastructure build-out is estimated to be a $90 trillion opportunity over the next decade. • Risk Factor: Government intervention (regulatory capture) and political headwinds are increasing, which may slow down the "frontier" model companies like OpenAI.

AI Application & Agentic Layer

• The focus is shifting from "infrastructure" (chips/servers) to the "application layer" and "AI agents." • Companies are moving from "buying everything to catch up" to demanding ROIC (Return on Invested Capital). They want to see how AI actually improves profit margins. • Sectors to Watch: Healthcare (Eli Lilly) and Insurance (Travelers) are highlighted as early adopters using AI agents to drive productivity and manage risk.

Takeaways

• Productivity Boom: The real economic story is a "productivity boom" that will eventually lower core inflation as AI agents take over complex tasks in services and finance. • Enterprise Adoption: Look for companies that are successfully integrating "agentic systems" into their workflows to increase margins, rather than just the companies selling the chips.

Macroeconomic Themes & The Fed

• Interest Rates: There is a debate regarding the Fed's next moves. Visser argues that the labor market is weaker than the data suggests and that "wage inflation" is overblown. • Kevin Warsh (Potential Fed Chair candidate): His recent comments suggest a desire for less "forward guidance" and a belief that AI-driven productivity could allow the Fed to be less hawkish even if inflation stays slightly elevated. • The "Outside the System" Trade: As governments get more involved in AI and fiat systems, there is a growing case for assets "outside the system" like Bitcoin, Gold, and Silver.

Takeaways

• Broadening Market: Expect a "broadening out" of the stock market. While tech may consolidate, sectors like Banks, Insurance, and Healthcare are expected to perform well. • Volatility Warning: The "Tech Momentum Index" is at an 85 volatility level—higher than the dot-com bubble. This makes it difficult for institutions to maintain large positions, potentially leading to sudden 10-20% market shocks. • Cybersecurity Risk: Visser predicts a potential "market shock" within the next year caused by a major AI-driven hack of a global bank or infrastructure, which could cause a temporary 10% global market drop.