The LAST Correlation Standing 📊 | Why AI & Bitcoin Will Melt Faces 🚀

The year 2026 is progressing, with April behind us and May underway. This analysis focuses on current market trends, particularly the "AI goes burr" phenomenon, a play on "money printer go burr," which suggests AI is driving market exuberance. Starting with some concerning news, the crypto market exhibits illogical valuations. Solana, for instance, is 230 times cheaper than Ethereum based on market cap per transaction. Ethereum's market cap per daily transaction stands at a staggering $114,000, compared to Solana's $500. This disparity highlights a significant inefficiency. There's been a slight exchange inflow of Bitcoin, with approximately 8,500 BTC hitting exchanges in recent days. However, holders are not selling into the rally, indicating no significant selling pressure, which is positive. Digital asset flows saw a fifth consecutive positive week, with a modest $118 million inflow last week. This week also started strong, and only one of the last ten weeks registered negative flows. Bitcoin ETFs are back, playing a crucial role, with $192 million flowing into Bitcoin. Conversely, Ethereum saw an $81 million outflow, breaking a three-week positive streak, possibly due to unstaking activities. Other altcoins experienced minor movements. On the AI front, a single ChatGPT query consumes ten times the energy of a Google search (2.9 watt-hours vs. 0.3 watt-hours). At this rate, AI data centers could soon consume as much power as two-thirds of all American homes, underscoring energy as a critical bottleneck. Solving energy issues is paramount for future growth, leading to considerations of space-based data centers and solar power. Shifting to positive news, there are significant bets on Bitcoin reaching $120,000 by Christmas on Darabit, a platform known for accurate predictions. While not an all-time high, this target suggests a strong year-end. The Fear & Greed Index is back to neutral at 50, indicating a balanced market sentiment after a period of extreme fear despite market pumps. A key focus is the "last of the Mohicans" correlation: the PMI business cycle framework. All other historical Bitcoin correlations have seemingly failed, leading to confusion about the four-year cycle, the absence of a historical blow-off top, and the current market behavior. However, the PMI (Purchasing Managers' Index) has historically correlated with Bitcoin bull runs. Previous bull markets (2011-2013, 2016-2018, 2020-2021) coincided with PMI recoveries and expansions. Currently, a massive CapEx boom driven by AI is underway, potentially the largest ever. If Bitcoin doesn't pump during this CapEx boom, the speaker questions what will. Another interesting correlation is Bitcoin versus gold. From late 2020 to late 2024, gold significantly outperformed Bitcoin. Then, from late 2024 to mid-2025, Bitcoin surged while gold lagged. If this pattern continues, a new Bitcoin bull market and gold bear market could emerge. This suggests a potential trading strategy of shorting gold and longing Bitcoin, though with inherent risks. If Bitcoin were to reach gold's market cap, each Bitcoin would be worth $1.82 million. Bitcoin is currently 35.98% away from its all-time high, while many other assets are 90% down. Bitcoin bears have lost $8 billion in liquidations since February, with spikes in liquidations being the highest since early 2025. This indicates persistent shorting despite Bitcoin's upward trend. Over the last 30 days, Bitcoin is up 20.57%. Zcash and Ton have been top performers. In the last week, Doge, Zcash, and HYPE also outperformed Bitcoin against USD. Privacy coins like Monero, HYPE, and Zcash are showing strength. May has started strong, up 6.37% so far. Historically, May is the second-best month for Bitcoin. November, traditionally "Moonvember," was negative last year, breaking the seasonality correlation. The speaker pledges to abandon Bitcoin correlations if the PMI correlation doesn't hold this time. Bitcoin season is currently at 29, meaning Bitcoin bulls are in control over altcoins. However, the "Clarity Act" could trigger an alt season. There's a 71% chance of it being signed into law this summer, with the US president reportedly aiming for it before July 4th. This act is expected to accelerate stablecoin transactions and the tokenization of everything. Stablecoin transaction volume has seen massive growth, with USDC transaction volume on Solana reaching $198 billion in the last 30 days, nearly as much as total stablecoin volume three years ago. Tether's volume was $60 billion in comparison. The "winner takes most" principle is evident here, with smaller stablecoins becoming irrelevant. Bitcoin ETF flows are robust, with two of the three biggest days this year occurring recently. Yesterday's flow was $532 million. Investors are rotating out of software and other sectors into energy, AI, and scarcity assets. ETH ETFs are also seeing inflows, with $60 million pulled in, while SOL ETFs are still small at $3 million on their first day. The stock market's Fear & Greed Index is at 67, indicating greed. Recent stock performance has been remarkable, with Micron and Intel up 30% in a week. Google is up 11%, Tesla 5%, Amazon 6%, and Broadcom 8%. Nvidia dipped 6% post-earnings, and Microsoft and Apple are down 4%. Google added $1.4 trillion in market cap in 30 days, illustrating the wealth creation driven by AI. The S&P 500 earnings growth outlook shows extreme optimism, primarily driven by AI, hence "AI goes burr." These secular bull markets require investors to ride the trend until it loses steam, as eventually, they all do. The speaker advises rotating into different asset classes when the time comes. The ISM manufacturing PMI is also showing huge strength, aligning with the "AI goes burr" narrative. Micron is up 900% in a year, demonstrating significant returns in the stock market driven by AI. AMD, with earnings today, has seen massive returns, up 74% in April alone, also due to AI. The future of AI will be dominated by "inference" rather than learning. Self-driving cars and humanoid robots will primarily need inference capabilities to make real-time decisions. Jensen Huang, CEO of Nvidia, believes inference will account for 99% of all compute in the future. Cybercabs are being built as inference machines, requiring significant cooling. Tesla is projected to scale to 10,000-30,000 robotaxis by year-end. If 10,000 robotaxis are deployed, Tesla's stock price could reach $1,000. Tesla's manufacturing process can produce a cybercab every five seconds, making 10,000 easily achievable once safety concerns are fully addressed. Tesla is expanding robotaxi services to Florida and Nevada, indicated by new job postings for field response specialists. The discussion concludes with a reminder that these videos are available as podcasts and emails, offering quick insights.