Bullish or Bearish? Where Stocks And Bitcoin Are Headed Next

0:00Hello, everyone. Today, we are going to deeply analyze all the current economic data with the goal of deciding whether we are bullish or bearish right now. We'll discuss the U.S. government's new obsession with buying equity in important companies. And finally, we're going to ponder the big question, whether the Bitcoin four-year cycle, is that going to remain or not? We're live today from the desk of Anthony Pompliano.

0:30Before we get into today's episode, I need your help. My goal is to get to 1 million subscribers on YouTube, but we only have 25 ,690 right now. So hit that subscribe button and let's get into it today. All right. I have been spending an inordinate amount of time trying to answer one question. What's going on in financial markets right now? Some of you believe that we're in a tech-enabled economic boom and it's going to go on for years. I like that idea. But others of you believe that everything is overvalued and a significant market crashes right around the corner. I don't like that idea. Now, it's that enthusiastic disagreement between all of you that interests me though.

1:05The market's ultimately the referee, and so that's what's gonna determine the winner. But the work that I've been doing is focused on ensuring that I'm on the right side of the outcome, whatever it may be. So let's start with some of the negative views of the market. Bad news first. Charles Schwab's Kevin Gordon explains that the S &P 500's Ford PE is at the same level today as it was in January of 21. Today, the effective funds rate is over 4%. In January of 21, it was only 0.09%. The ex-capitalist sees this as a major red flag. He writes that the market is basically more overvalued today than it was back in 2021.

1:39Investors are counting on AI to grow corporate earnings at an unprecedented rate. He says we haven't seen that yet, and he doesn't think that we'll see it anytime soon. It's time to be more fearful than greedy, according to him. But I don't know if people should be as pessimistic as this data as it seems on the surface. Kevin Gordon goes on to explain that the S &P 500's forward profit margin that's been rising sharply and now it sits at a new all-time high. Good news. That's a great sign that profit margins are rising. This reinforces the idea that companies are growing revenue and profits, but they're doing it with less employees.

2:12Congratulations. A big reason for the investor enthusiasm is that we're seeing all the artificial intelligence come to fruition. JP Morgan's Michael Simblast writes that AI-related stocks have accounted for 75 % of the S &P 500's returns, 80 % of earnings growth and 90 % of capital spending growth since ChatGPT launched in November 22. The AI boom is not happening in a vacuum though. Carson Group's Ryan Dietrich says that when the S &P 500 makes a new all-time high in the month of September, which it did, Q4 is higher more than 90 % of the time. Wow, I'm excited. This September all-time high is being driven by a persistent bid in the market.

2:48You want proof? Well, Bloomberg reports the S &P 500 has gone 107 sessions without a drop of 2 % or more. It's the longest streak in more than a year. And the backdrop of continued bullish momentum in the stock market is locking arms in solidarity with the fact that the odds of an October rate cut, those are now 94%. Pretty hot. There's plenty of folks who will see all this economic data and they'll say, Pomp, shut up. This time is different. They'll point to some weird political policy or a critique of the existing administration. But to me, that's all noise. Dietrich shows that stocks go up under almost every single president, regardless of whether they're a Republican, a Democrat, an Independent, or a freaking alien.

3:29Don't let your politics ruin your portfolio. Stocks are structurally built in a way where they will continue to go up forever over a long period of time. And maybe most importantly, it's not just stocks. Consumers are showing the bullishness in the market is warranted. We just saw this morning, Q2 real GDP number. It was revised higher to 3.8%. That's significantly higher than the estimated 3.3 % from economists. So take a listen to how surprised CNBC was this morning. Now, on the GDP side, this is our third time around the block on Q2, and we see a really solid revision, 3.8%. I'm a bit shocked, to be honest.

4:07Usually the revisions as you get to second and third become smaller and smaller. So 3.8 % would be the best quarter going back to, and we have to go back a ways here, to 4.4%, and that was the third quarter of 23. Now, it is important to point out that if you look at the first quarter final down half a percent, there's a balance there. But the balance is moving in favor and momentum is moving in favor for better growth. So there you have it. We have a much stronger than expected consumer spending. We have rising incomes and lower imports. That all sounds like positive developments to me. After reviewing all the economic data, I understand why some people are bearish.

4:45I just think that they're wrong. Let's see what happens, though. Maybe I'm wrong. Time will tell, and ultimately, the market will be the referee. All right, guys, there's something that's happening in the market that I think is worth talking about. We are seeing the United States government step in in a way that we haven't seen really since the global financial crisis. Our friends over at Geiger Capital say the United States government is openly looking to buy stakes in public companies and that they're doing it with companies they consider vital for national security. Outside of the bailouts, we haven't seen something like this since World War II.

5:14Well, where are those areas? artificial intelligence, chips, nuclear, rare earths, et cetera. Geiger says that we should realize where we are and take advantage. But my take might be a little bit different here. The United States government participating in the market, yes, there's always going to be trade-offs, but I think it's actually a net positive. And the reason is because really what they're doing is they are trying to stimulate the free market. If the government goes ahead and provides funding, incentives, or deregulation to the private market, they're essentially saying we cannot do it ourselves.

5:43I don't think that there's a politician or a bureaucrat that we're gonna put in charge of artificial intelligence and tell them to actually go build the models. Instead, what happens? My friend Sriram Krishnan, he's in charge of AI policy. He's trying to help actually coordinate at a large scale, what should the rules of the United States be? What should we allow people to do and what should we not allow them to do? That's what we need the government to do. Set the rules, set the framework, and then let the private market go do what they do. On top of that, we've seen areas where the government has stepped in and said, you know what the biggest problem is for some of these companies to solve these large problems?

6:15They need capital. And so whether it's through some sort of incentive or subsidy, or it's a straight out investment, the United States government is saying we want to stimulate this activity to solve this problem. And we've seen this around the world throughout the decades. Many countries all around the world actually have sovereign wealth funds and they go and they invest. They take risk and they get paid for the risk that they take. That helps them not only create an economic return for their citizens, but it usually also creates all sorts of GDP growth and it actually allows them to upgrade their infrastructure.

6:44See, the thing is that the government's actually the sucker at the table if they constantly are putting money out and they're getting nothing in return. So what we now have is a bunch of business people and investors who are inside the government and they're saying, no problem, we'll help solve these problems. We'll help empower the private market. But in exchange for doing that, we've got to be able to get paid for the risk that we take. I actually think that the United States government becoming an economic actor is something that we not only have not seen, but it's something that is going to become standard moving forward.

7:13Because ultimately what we have in the US government is we have an exploding national debt. We've got no way to repay it. And we constantly are running a loss. So if we're going to actually operate under some sort of economic P &L, well, then we should probably start trying to figure out how do we grow our assets? How do we drive revenue? How do we actually get this country back to a balanced budget? That's all things that are under consideration here. And so, yeah, the government is going to buy stakes in these companies. We should be cautious. We should be vigilant. We should pay attention. Make sure that there's no nefarious activities.

7:43But at the same time, I like that the government's doing this because I think it'll stimulate the private entrepreneurs to go solve these problems. And ultimately, what I care about is getting these problems solved. So let's see what happens. One of the biggest trends going on in the Bitcoin world right now is that these public companies keep buying a Bitcoin, the treasury company. That's the big thing in 2025. These companies now collectively own 1.3 million Bitcoin, according to BitcoinTreasuries.net. The reason why that's a big deal is they finally have crossed over owning more Bitcoin than all the Bitcoin ETFs combined.

8:15The Bitcoin ETFs, remember, that's the single greatest product launch in Wall Street history. BlackRock, which obviously makes money from tons of ETFs and different asset management services, they now make more money from their Bitcoin ETF than any other product they've offered to their investors. It's a big deal. So anytime that you see companies eclipsing the ETFs, that's also something to pay attention to. But the thing I'm taking away from this river chart is that this is only public companies. Imagine how many private companies all around the world own Bitcoin on their balance sheet. I have private companies that have Bitcoin on their balance sheet.

8:46Many of you have companies that have Bitcoin on their balance sheet. And so actually it's not 1.3 million Bitcoin held by companies. The number is much, much higher. I think it could be as high as three times. So ultimately there are millions and millions of Bitcoin that are all sitting on the balance sheet that actually are sitting under the control of companies, not individuals. I keep getting asked by a lot of people, what's going to happen to Bitcoin's price now that the Federal Reserve has cut interest rates? Well, our friends over at Binance Research just came out with a brand new paper, and it says that with Bitcoin trading near record highs during this week's cut, this marks one of the first instances where the asset is experiencing liquidity easing while it's at a peak level.

9:22Historical equity market data offers useful precedent. When the Fed has cut rates near all-time highs, equities have typically extended their rallies, with the S &P 500 posting a near 10 % median return over the following 12 months. If crypto follows the same equity playbook, the combination of policy support and momentum at highs could reinforce the uptrend. This positions digital assets for continued strength into Q4. That doesn't surprise anyone. If you put cheaper capital into the market, Bitcoin should go higher. But it also calls into question whether the four-year cycle is actually going to be extended or not.

9:53Raoul Paul, global macro investor, he has come out and said he doesn't think that the four-year cycle will last any longer. He thinks it's now a five-year cycle. Take a listen to his logic. Why is Bitcoin sort of not wildly off to the races yet? And it's this chart. Bitcoin is basically, this is a detrended Bitcoin and it's basically the ISM, which is the business cycle. Remember, we've always said it's the business cycle, stupid. It is always the business cycle, stupid. And all of these people who claim it's the four-year cycle based around this and that, they don't understand the fundamental of what the business cycle is, why there's a four-year cycle in everything.

10:32We've explained it. We'll go through it in great detail tomorrow in our Everything Code presentation. But basically, it's following the ISM. Rates have been following the same pattern. You see, rates should have come lower. They need to come lower because we need to roll the debt. We've talked about this. That's part of the Everything Code, fundamental part. And ISM, because rates are so high, has meant that Main Street has been screwed while Wall Street's made money from debasement. Earnings versus scarce assets. This is the issue that they need to solve and they need to get rates lower. They get rates lower.

11:08Why? Why do we have an elongated business cycle that looks like virtually no other real other time? it's because and i only just found this out doing redoing the work on the everything code recently is that in 2021 22 that actually extended the maturity of the debt from four years to five years so that extension of the maturity of debt has pushed out the business cycle a year the four year cycle this time around is a five-year cycle we don't know what the next one will be until we see where they all get end up getting refinance whether it comes back to four because they must to get some stuff at the long end, or whether they shorten it because everything's in the short end, we don't know yet.

11:49But this one is a five-year cycle. And this is what it looks like, a 5.4-year sign curve. 5.4-year is the exact average weighted maturity of the debt. And it tells us the ISM should peak by 2026. We think liquidity probably peaks before that as the rate of change of ISM changes and the rate of change, the liquidity changes. Our best guess remains well into 2026, probably Q2. So there you have it. Raoul Paul, global macro investor, somebody who's been studying markets and liquidity for a long time. He thinks that the four-year cycle is over. What do you think? I have no clue, but I do think it's the single most important in Bitcoin right now.

12:32That's it for today's show. Thank you so much for watching. Remember, we only have 25 ,690 subscribers on YouTube, and I need your...