Research Summary
The report discusses the intersection of artificial intelligence (AI) and cryptocurrency, predicting that the next bull market in crypto will be driven by an explosion of fiat liquidity and the commercialization of AI technology. The author anticipates that major central banks will print the most fiat in history, which will fund the craze around new AI technology. The report also highlights the potential of Filecoin (FIL) and the global economic system’s unsustainable imbalances.
Key Takeaways
Intersection of AI and Crypto
- AI and Crypto Convergence: The author predicts that the next bull market in crypto will be driven by an explosion of fiat liquidity and the commercialization of AI technology. This convergence is expected to fuel the growth of new AI technologies and cryptocurrencies like Filecoin (FIL).
- Role of Central Banks: Major central banks, including the US Federal Reserve, the People’s Bank of China, the Bank of Japan, and the European Central Bank, are expected to print the most fiat in history to save their government’s bond markets. This increase in fiat liquidity will fund the AI and crypto boom.
Global Economic Imbalances
- Debt Growth and Economic Growth: Governments rely on debt growth to drive economic growth, along with population growth and productivity growth. However, the global debt-to-GDP ratio has surpassed 100% and continues to grow, creating a vicious cycle of increasing debt and the need for higher GDP growth to offset it.
- Flaws in the Global Trading and Financial System: The report highlights the flaws in the post-WW2 global trade architecture, which necessitates the printing of more money to sustain the system. The breakdown of the relationship between China and America illustrates how cheating around the edges occurs to maintain the system.
AI Investment Opportunities
- Flow of Capital into AI: The printed money is expected to flow to new technology companies, particularly those related to AI, which promise high returns and have high profit margins. However, investing in this sector is challenging due to the lack of protective moats and the risk of replication by larger companies.
- Investment in Established Companies: Instead of trying to invest in individual AI startups, it may be more prudent to invest in established companies like NVIDIA and Amazon, which are leaders in GPU chip manufacturing and cloud data services, respectively.
Role of Filecoin (FIL)
- Filecoin’s Potential: Decentralized data storage projects like Filecoin (FIL) are appealing for AI investments, as they provide a censorship-resistant and decentralized solution that is crucial for AI’s reliance on data. The author is confident in the potential for FIL to perform well in the 2023-2026 cycle.
Actionable Insights
- Investigate the Potential of AI and Crypto: Given the predicted explosion of fiat liquidity and the commercialization of AI technology, there may be opportunities to invest in AI and crypto-related ventures.
- Consider Established Companies: Instead of investing in individual AI startups, consider established companies like NVIDIA and Amazon, which are leaders in their respective fields.
- Explore Decentralized Data Storage Projects: Projects like Filecoin (FIL) could be worth investigating due to their potential role in AI’s reliance on data.