Nasdaq is down over 5%. You just have complete blood in the markets. Crypto is not the main story this year for financial markets. Crypto is downstream of these other stories. The bill for the Trump administration is coming due now. We pay that bill over the next two years. I think it's pretty clear we already won. But if you were to find one asteroid that had huge gold deposits in it, you could double the world's gold supply overnight. You cannot do that with Bitcoin.
Hello. Welcome back to Cointelegraph Trade Secrets, our very own crypto market show right here on X. My name is Kieran. I'm your host. And today I'm joined by Haseeb Qureshi, managing partner at Dragonfly Capital. Haseeb, how are you doing?
Doing okay, doing okay. It's quite a day.
Indeed, man. The markets are red. The markets. What's happening? Why is the market. What's happening with the market?
Uh, it seems like. So on the day of the midterms. So yesterday, markets were actually quite green. And there seemed to be some exuberance about the idea that maybe Trump's worst instincts are going to be checked by this new incoming Congress. And usually political gridlock is perceived to be a good thing by the markets because it means that nothing happens. And if nothing happens, then capitalism can kind of do its thing. And companies can grow and build things and not have to worry about policy volatility. Well, today we have a very different reaction. Nasdaq is down over 5%. Uh you just have complete blood in the markets. And I suspect that what's happening here is the AI trade is bleeding into crypto as opposed to crypto having some idiosyncratic sell off. Uh, so you've got a bunch of AI names are down 15 to 20% today. And it seemed a little bit surprising. I mean, AI names were down somewhat yesterday, but the overall market was pretty up. Um, and now you just see a total wipe out and a lot of AI names and, uh, you know, being, being down 15, 20% in a single day for a lot of the neo clouds. And I think the story here, you know, at this point, Nvidia is flat on the year. Nvidia has not actually gone up this year, which is crazy given how much revenues an AI have inflicted this year. And yet the market is like, yeah, I don't think Nvidia is is really been a winner for for 2026. So it seems to me like people are pricing in data centers are not going to get built. And there's going to be a very strong squeeze from a regulatory perspective on the entire compute complex. It seems like, you know, yesterday you saw Nvidia was down, but you know, the hyperscalers were up. Um, and that's why the market rallied so strongly. Now everybody is down. And it seemed like people were thinking that, okay, with this data center build out being constrained, there's going to be more that we're going to kind of save the hyperscalers from themselves. They're not going to be able to spend more money. They're going to be forced to be cash flow positive. And the market likes that. Well, now the market doesn't like that. I think it's unsurprising. That was what I would expect is that actually compute is good. And if we're not able to get more compute online, that's bad. And that's bad for the economy. It's bad for growth. It means that a lot of the things that we were going to expect to buoy an economy that otherwise is facing high oil costs, high inflation, uh, you know, low consumer sentiment, like all the stuff that made the blue wave, uh, that motivated the blue wave, which was this economic anxiety and angst. That's all still there. We're just not going to have data centers now. So the thing that was saving us, which was, you know, the AI trade and the AI boom, that is not going to be coming in as full force as it was before. So it's hard to say exactly what to expect from here. But the risk off attitude that that has now inflected in markets is bubbling over into crypto is that people just want to get the hell out of the way, because holding risk assets right now is just not what you want to be sitting. When there's so much economic anxiety that now is being is now metastasizing to the rest of people's portfolios.
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I don't want to ask, oh, is this the start of the bear market? Is this the, you know. But for an investor that's on the sidelines right now, maybe they haven't bought crypto yet. They're waiting for the right time. They're seeing this, uh, you know, start to fall is, is now the time to be jumping in Haseeb or do you think that it's only going to go down further and potentially there's another bottom coming in for Bitcoin?
So I mean, first thing I'll say, um, right now what you're really pricing is the AI trade not the crypto trade. Um the short term volatility has everything to do with AI very little to do with crypto. So the AI trade it's kind of like that is macro. Now I trade the AI trade is macro and the AI trade. Um I think it's very difficult to prognosticate from here where we're going. I think almost certainly I mean things have been so explosive this year on the AI side. Um you should expect that there will be very sharp downturns, but I don't think we're done. I don't think this is the end of the show. Um, you know, anthropic hasn't even gone public yet. There's still so much revenue growth that we've seen even from Q2 to Q3 in Anthropic's numbers. I think the show is just getting started, and there's going to be a lot more craziness from here within the AI trade alone. And I think crypto is going to be, again, largely along for the ride in that respect. If you're talking about the short term, in the longer term, you know, I remain bullish on crypto and on crypto assets. Uh, but I think, you know, what are you going to see between here and December cryptos? We have very little to say about that. Uh, is my, is my view.
So for people that are saying Bitcoin is going to go to 100,000 by the end of December, you're like, that's, that's probably not a possibility. The way things are going right now. That's probably not going to happen in terms of, yeah, having a, I mean, at this point, that's like a 30% move. Um, I don't think it's super likely you're going to see a 30% move by end of year. It's not impossible. But, you know, this is a restrictive environment. If it's going to be tougher to grow, if tax rates are going to increase, if like, you know, there's going to be gridlock in Congress for the next couple of years. If there's going to be now very little approvals for data centers, all of that stuff is going to be a headwind to the economy. And, you know, uh, if you can get Congress to actually check some of the things that Trump is doing, like let's say you can get them to end the war or you can get them to end the tariffs. Uh, those things, it might be okay. That's actually constructive and maybe the economy is going to have a boom. Maybe that's going to lower inflation, maybe that allows rates to rise, rates to fall. Right now, it doesn't seem the market actually believes that any of those things will happen. We have not seen a significant change in the outlook on rates. Uh, we've not seen if you look at the prediction markets for the Iran war, they basically didn't move. So it's not like, you know, of course, the president has pretty much total control over foreign policy. You know, it's too slow to have impeachment proceedings be able to affect tariffs. So the reality is it's still the Trump show. Uh, it's just going to be with, you know, more side plots of impeachments and hearings and so on. But Trump's still in charge. Trump's still running the economy. And, uh, absent any ability for laws to get passed, Congress right now is mostly going to be running, uh, you know, basically a, a political campaign for the next two years.
And, uh, you know, the Clarity Act was definitely a catalyst that a lot of people in crypto were looking forward to. And a lot of people were, you know, on the fence either way, whether it was actually going to do anything for the market, given that it was probably priced in at the start of the year. But I was talking to Anthony Scaramucci the other day, and he was saying that, you know, the reason why the Clarity Act didn't go through the singular reason was because Trump launched a meme coin. So I know Scaramucci has a bias against Trump as well, but what's your thoughts on that? Do you think that was the reason?
I think that is clearly true. Yes, that is clearly true in that crypto would not be polarized in the way that it is now, were it not for the Trump family and the association with, uh, Trump, with World Liberty Financial and the Trump and Melania, let's not forget using crypto to enrich themselves and to enrich the the first family. So I think if you draw the line forward, the reality is that clarity didn't really move the market very much. If you look, you can just do the regression yourself. You can go on polymarket, look at the odds of clarity and regress it against the Bitcoin price. And what you'll see is that had almost no impact. And even in the days that you saw that when clarity failed, the cloture vote in the Senate, um, the odds or sorry, the Bitcoin price was actually up the next week and it barely moved on the day that that clarity failed the cloture vote, which essentially tells you what you need to know, which is that markets don't think that clarity actually mattered that much for asset prices. It mattered for a lot of things, but it didn't matter for asset prices. And so all of that is to say macro's in the driver's seat. It has been the entire year. You've seen it with what's happening with data centers, with memory stocks, with with gold. Um, crypto is not the main story this year for financial markets. Crypto is downstream of these other stories. So until you see some volatility dampening in the AI trade and I think that is possible. Um, but we have to see companies go public first and we have to see some predictability of revenue and some predictability of the AI build out the inputs and the outputs of the AI trade. Once we get some predictability around that, that's when I think you will see a lot of the retail bid start to coagulate again around crypto. But right now, if AI is the most volatile thing in the market, which right now it is. I mean, look, AI, ASR has moved more than Bitcoin did. Yeah. Uh, crypto is supposed to be super volatile. It is not as volatile as like nebulous. So that is why you are seeing so much retail energy, not in the crypto market, but in these other markets right now.
And do you ever think then like, you know, because when Trump won the election and he was coming in. Everyone in crypto, everyone in AI, everyone was bullish. Do you ever think now, looking back, uh, you know, two years ago, would the markets have been better right now if if it was a different administration?
It's possible. It's hard to say. I mean, these kind of alternate histories are always difficult to parse because at the end of the day, Trump did do a lot to improve crypto. Uh, standing in America. So he got rid of Gary Gensler. He brought in a very, uh, constructive administration. Now, if you have a Kamala Harris presidency, you know what? What does that look like? Probably you don't get Gary Gensler, uh, or Gary Gensler look alike, but you get somebody who's maybe somewhere in between. Would that person still be railroading Coinbase? Would that person still be keeping the cases that the SEC ended up dropping? Uh, would we, would we have the kind of favorable legislation that's allowing a lot of these big financial institutions and corporations and banks to come into crypto, to adopt stablecoins, to do all these things we don't know. Now, it's definitely true. We wouldn't have the baggage of the Trump administration enriching themselves, the meme coins, the reflexive Democratic outrage toward, you know, all of the presidential ethics stuff that that railroaded the Clarity Act. But what would we have instead if we had a Kamala Harris presidency? We don't know. So that's why I say it's not obvious. The bill for the Trump administration is coming due. Now. We pay that bill over the next two years. When we see the congressional hearings, there's going to be people from World Liberty Financial who are dragged in front of Congress and who are going to be subpoenaed. And like all the everything's going to come out. Whatever Jefferson's son did, whatever the World Liberty people did, whatever the meme coin people did, all of that stuff is going to be in public view because it rates, it really rates. It's great TV. Everybody wants to know, how exactly did Trump make billions of dollars when the oil industry is down, you know, 30, 40% from the highs. Or no more than 50% plus from the highs. That is going to be on TV every night for the next couple of years. So you know, that's the bill that we have to pay as an industry for what we got. Was it worth it? We're going to know at the end of those two years. It's hard to say at the beginning of it.
Do you think Bitcoin is a success story. Do you think that like we're at where we want to be right now in terms of adoption? I mean, from when you look back, Haseeb, when you got into crypto, when you got into Bitcoin, uh, would you say it's exceeded the expectations of how far we've come along with everything from institutional adoption to just, you know, where it is right now in the world? Or did you have higher expectations?
I mean, look, when I came into crypto, Bitcoin was on the order of a thousand, a couple thousand dollars. So since then, obviously, it's been an incredible, incredible run up and incredibly returning asset. Probably the most the best investment of anything you could have owned at that time. Ethereum even more so in the time since I originally came into this industry. Now, all of that said, Bitcoin has gone through a lot of ups and downs. But I think the story here for crypto is not really about Bitcoin. So if you remember, Bitcoin was deemed a commodity a long time ago. This was early Biden administration that Bitcoin was deemed a commodity. Or maybe it was under Trump won that Bitcoin was deemed a commodity. Ether won the same positioning under Biden. It was not under Trump that ether was decided to be a commodity. It was guaranteed that ether is a commodity. When the grayscale ETFs were approved and BlackRock started trading ETH, that was under Biden, that was under Trump. So we've had regulatory clarity on a lot of this stuff for a while. You know, if you look at the genius act, the genius act was bipartisan. It was like, you know, two thirds of Democrats voted in favor of the genius act. So this was not a like most of the things in our industry are already there. Most of the things in our industry are already baked into the bread. Bitcoin is already there. Ethereum is already there. Stablecoins are already there. The only thing that clarity really needed was, okay, what about altcoins? What about exchanges? What's the regulatory status of DeFi? You know, can Americans trade like, okay, those are important questions, but they're actually not the lion's share of what's happening in our industry. Right? I mean, Bitcoin is more than half of the entire crypto market cap. And in Ethereum, you know, another 300 billion roughly. And those things are already done. It's a done deal. These things are commodities. They can be bought by Americans. There's no question that these things are legal and belong within the firmament of financial assets in the US. So so the reason why I say all of that is that I think it's pretty clear we already won. Now, winning is not a binary. There's scales to winning. Uh, and you want to eventually get Bitcoin to the place where it becomes this reserve currency becomes this competitor to gold. And that's going to take time. You know, like that's not an overnight thing. Whether Bitcoin goes to 100 K at the end of this year, or if it takes 2027, 2028, it doesn't really matter for the long stretch, for the long stretch, like, what am I talking about? The long stretch I'm talking about over the next 15 to 20 years, is Bitcoin going to usurp the place of gold, and is it going to ultimately be a part of the financial universe? When people think about neutral non-sovereign stores of money, I think the answer to that, it really doesn't matter if Bitcoin hits 100 K this year or next year or the year after that, it really doesn't matter. That big sweep of history is much more about larger technological phenomena, such as, for example, you know, you might have seen the story about this startup that is transmuting Mercury into gold, and that we now have the chemistry and physics to be able to do that. Okay, so people are manufacturing gold now. You've got SpaceX going in on asteroids and mining asteroids. And the reason why they're doing that is they think they can get rare chemicals and rare minerals, the most valuable of which being gold. If you find a single asteroid, you know the entire world gold supply, if you collected it and fit into a cube, would be roughly half a football field. It's not that much gold in the world. That's why it's scarce, and that's why people value it so much. But if you were to find one asteroid that had huge gold deposits in it, you could double the world's gold supply overnight. Um, you can't do that with Bitcoin overnight as well. That's right. That totally destroys the idea that gold is the non-sovereign store of value for the 21st and 22nd centuries. That immediately makes people realize that, oh, shit, technology has invalidated our previous way of thinking about scarcity and a store of value. Bitcoin is. It's immune to that. There will never be an asteroid that you will find a bunch of Bitcoin on. Um, and so that story is a deeper story. It has nothing to do with the midterms, has nothing to do with the trades, has nothing to do with, you know, what happens in, you know, what price action is between now and the next presidential election. And that is the story that I'm fundamentally confident in. And I have a zero question in my mind that that's going to be true, as you see. And you see it already with the midterms of younger and younger people taking the seats of power. You know, the biggest story of the midterms was not this blue wave. Obviously, there was a blue wave. But the the bigger story is that so much turnover in the House and the Senate toward younger candidates, which like, yeah, about time. We have millennials now really starting to take the reins of control and being the next generation of Democratic hopefuls. And that is a very, very good sign for crypto because, you know, take take James Talarico, the senator from Texas who won a huge upset. He's a Bitcoin guy. You know, he was voting on the Texas Bitcoin Reserve. And, you know, is that because he's like a crazy, you know, Texas yahoo? No, because he's young. Because young people overwhelmingly are more crypto sympathetic. So seeing that turnover in the political apparatus is the most bullish thing for crypto and seeing those young people who don't have the bias against crypto, who don't think, oh yeah, crypto is a scam, crypto is for cryptos, for, you know, crazy criminals and blah, blah, blah. Those people will retire or they will die. And as they retire and they just sink into irrelevance, you will see younger and younger people will take the halls of power. And to them, crypto is normal, crypto is normal and unsurprising, and they'll get it. And that's a big part of the reason why I remain long term unshakeable in my confidence that digital assets crypto and Ethereum are. All of them are going to benefit a lot over the next few decades.
