September week 4 - 2025

BITCOIN RESET
The Fed Cuts Rates by 25 Basis Points, What Now?

The Fed delivered the widely expected 25 bps cut, but the real story was the signal. Policy is pivoting toward easier liquidity as a softening labor market, not headline inflation takes center stage. The dot plot wasn’t a shock (limited cuts penciled in for 2026 vs. markets leaning toward more), but it opened the door to a sequence of reductions into next year. In this phase, direction beats magnitude, a cutting cycle rarely stops at one and done.

Why that matters for assets? roughly $7T are currently parked in money market funds which have enjoyed 4–5% “safe” yield. As front end rates trend 100 bps lower, the cash carry looks less compelling. Expect some of that capital to creep out the curve and toward equities and crypto, despite the sticker shock. On earnings math alone, one view is that equities still screen 10% undervalued at current macro settings.

Risks? Consumers still feel the pinch, softer jobs, high shelter and loan payments, and the psychological drag of prices that never “go back.” Tariffs could add a late inflation lag (10 months), though potential offsets, productivity, especially AI-enabled, may keep stagflation risks contained for now. Bottom line, the near term green lights with caveats.

On crypto, ditch the calendar memes. Coinbase research finds no statistically reliable edge in “Uptober” or any month once you control for real catalysts. Price is still about flows and this year, a huge chunk comes from DATs (public vehicles that warehouse BTC/ETH/SOL). We’re likely mid cycle there, but closer to the end than the beginning. MNAVs have compressed toward 1.0, trading volumes are off the highs, and the next phase favors cost, transparency, and consolidation over hype. Expect a few large DATs to dominate while smaller ones merge or get acquired.

Catalysts to watch, a string of Fed cuts, continued institutional adoption (boards that prefer equities may still buy DATs as proxies), and any macro upside surprise. If those align, the next leg could be parabolic one, and yes, this is still a “most-hated” rally, until sidelined capital capitulates. Stay tuned! 😎

AI RESET
The Coming AI Upheaval

Former Google CEO Eric Schmidt is once again making waves with bold predictions about artificial intelligence and this time, the timeline is even shorter. In a recent interview, Schmidt warned that artificial general intelligence (AGI) is not decades away, but just around the corner. He argues that most humans could see their jobs replaced within the next three to six years, with a wave of agentic AI systems capable of reasoning, memory, and autonomous workflows reshaping society.

According to Schmidt, the so called “San Francisco consensus” among top researchers pegs AGI’s arrival at roughly three years. He places his own bet at closer to six, but emphasizes that once recursive self-improvement begins, AI systems learning and improving on themselves, progress will become “combinatorial,” racing ahead at a pace humans cannot comprehend.

From there, Schmidt draws the line between AGI and artificial superintelligence (ASI). AGI will be broadly capable, but ASI will be smarter than the sum of all humans, and this will arrive within the decade, he claims. One unsettling benchmark for ASI, producing mathematical proofs we know are true but cannot understand. That level of intelligence, Schmidt cautions, could frighten humanity to the point of resistance.

The national security implications are equally stark. Schmidt describes a potential arms race where countries racing ahead in AI innovation gain irreversible advantages, forcing rivals into preemptive action. He also highlights the geopolitical divide between Western closed-source AI and China’s open-source push, suggesting global adoption may favor the latter.

Schmidt’s closing message? Time is everything. Just as companies fumbled opportunities in the mobile era by moving too slowly, hesitation in the AI race could be fatal. For governments, businesses, and individuals alike, the arrival of AGI demands immediate preparation, because this revolution won’t wait.

AI RESET
Could The AI Industry be Propped Up by Hype?

On The Majority Report, writer and podcaster Ed Zitron lays out a blunt case for how the AI boom could unravel and why the fuse may already be lit.

The catalyst, he argues, is the shaky math behind the industry’s biggest domino, OpenAI. Oracle told investors it has $317B in future AI revenue lined up starting FY2027 $300B of which allegedly comes from OpenAI. Problem: OpenAI reportedly loses billions, has nowhere near the cash to honor such commitments, and Oracle doesn’t even have the full capacity built to deliver. If OpenAI can’t complete its nonprofit to for profit conversion, Zitron says, key funding (e.g., SoftBank) shrinks or basically disappears, an IPO is off the table, and the company risks becoming a “functional Ponzi” dependent on new money to cash out old.

The deeper issue is unit economics. Many Gen-AI startups spend over 100% of revenue on compute. Cloud’s old promise of asset-light software with fat margins has flipped into capital heavy industrialization (GPU farms, power, cooling) with uncertain payback. Even infra providers may be waiting years for profits. Meanwhile, enterprise adoption is high but disruption is kinda low. Most integrations deliver no ROI, and use cases remain stuck on summarization, text/image spit outs, and occasionally a PowerPoint, useful, but certainly not transformative.

What about NVIDIA? It’s the outlier winner for now. But its growth is tethered to a handful of hyperscalers and market expectations that are mathematically hard to sustain. GPUs are pricey ($50k–$70k each), racks need dozens, and utilization often lags demand, meaning customers burn cash to stand still. CUDA gives NVIDIA a moat, but it doesn’t fix customers’ economics.

Zitron’s final warning targets retail investors, breathless revenue claims (like Oracle’s) mask thin, fragile fundamentals. Big Tech will survive, but Oracle and latecomers may not. If OpenAI stumbles, the narrative and a big chunk of gen-AI revenue could basically vanish with it.

Definitely food for thought! 😳

DISCLAIMER:
This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions or investments. Please be careful and do your own research.