Latest / The Paul Barron Crypto Show / Google Historic Crash☄️Crypto Market Update
Transcript
- 0:00Speaker 1: Google's historic crash is underway. Today, we'll break down into
- 0:03Speaker 1: all of that and why this may be a signal
- 0:07Speaker 1: that could be affecting crypto. I want to thank our
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- 0:44Speaker 1: This is the self-custody to you. So make sure and
- 0:47Speaker 1: check it out. Tell them we sent you. Let's just
- 0:49Speaker 1: jump in right into this first tweet. And that, of course,
- 0:52Speaker 1: was the announcement of where Alphabet was falling. This is
- 0:57Speaker 1: a $ 520 billion market cap erasure. Quite possibly one of
- 1:03Speaker 1: the biggest in the history. Actually, it is the biggest
- 1:06Speaker 1: in the history, and I'll show you something here in
- 1:07Speaker 1: a second. When you look at the chart on this,
- 1:10Speaker 1: I want to go over here to the earnings. Right
- 1:12Speaker 1: there is the issue, right there. 29% surprise, negative. And
- 1:17Speaker 1: that's the problem. When you go back to previous earnings
- 1:20Speaker 1: in the red, back here, you know, 10%. Even further,
- 1:24Speaker 1: if you look back into... Previous to that in 22, 16%.
- 1:29Speaker 1: I mean, we haven't seen anything that's been even remotely
- 1:32Speaker 1: close to this. So this may be a, I don't
- 1:36Speaker 1: know if this is a top signal, but it definitely
- 1:37Speaker 1: is an issue that I think there is a transition
- 1:40Speaker 1: underway for Google in a big way. And if you
- 1:43Speaker 1: look at their business in general, search is, of course,
- 1:46Speaker 1: being cannibalized by AI. Alphabet shares, of course, all being
- 1:50Speaker 1: hit by that. I think revenue is going to continue
- 1:53Speaker 1: to fall and they're going to need a new model,
- 1:55Speaker 1: which is why I think they've also announced the custody
- 1:58Speaker 1: plan with what they're doing with Google for blockchain. So
- 2:02Speaker 1: this starts to also look at other major technologies that
- 2:05Speaker 1: are being disrupted. And that is the clear issue that
- 2:09Speaker 1: the market is facing right now. So is the AI
- 2:12Speaker 1: trade unwinding? A lot of you guys out there right now,
- 2:14Speaker 1: after we did our live stream yesterday and we took
- 2:17Speaker 1: a poll, many of you, I think it was over half,
- 2:20Speaker 1: had AI unwinding post-2028. And some of you, I think
- 2:24Speaker 1: about maybe another 20% in 2027, very few of you
- 2:29Speaker 1: thought that this unwind would be taking place. So maybe
- 2:32Speaker 1: that is the case because we are brewing into a
- 2:35Speaker 1: next generation hit right now. And if you look at
- 2:39Speaker 1: the model releases that Google is making, they announced it,
- 2:43Speaker 1: Gemini 4 Carbon. All of this, of course, is pointing
- 2:47Speaker 1: toward quantum threats, security, AI hacks. I think this is
- 2:51Speaker 1: going to be their angle in which they try to
- 2:53Speaker 1: go to market. The real question is productivity and what
- 2:56Speaker 1: kind of tool sets does it provide the market that
- 2:59Speaker 1: will be better than what we've seen both with Anthropic
- 3:02Speaker 1: and also with GrokBot and some of the other tools
- 3:05Speaker 1: out there, even with Muse. So this is a very
- 3:08Speaker 1: competitive layer right now, and it is one that is
- 3:10Speaker 1: starting to stick into the market for a $ 520 billion erasure.
- 3:13Speaker 1: This is a serious issue. that these executives are going
- 3:19Speaker 1: to get punished on, I believe. And there are some
- 3:22Speaker 1: analysis and some strategies out there that maybe Google should take.
- 3:28Speaker 1: Take a look at this clip.
- 3:29Speaker 2: Now you have the emergence of Muse as a personal agent.
- 3:32Speaker 2: People are using Cloud for similar things. Then the search
- 3:36Speaker 2: doesn't even happen in Google. That's their bigger problem. Converting
- 3:40Speaker 2: within Google, they can do that. That's a matter of time.
- 3:44Speaker 2: Their challenge is that they're going from 90% share in
- 3:47Speaker 2: search to a lot less than that in a world
- 3:50Speaker 2: where people start their commercial queries within a chat environment.
- 3:54Speaker 2: Are you suggesting they break up the company? I am
- 3:58Speaker 2: and I have been. And that's something that when the
- 4:01Speaker 2: stock was trading at 30 times earnings, nobody was really
- 4:03Speaker 2: thinking about. As it opens today at 18 or 19
- 4:06Speaker 2: times earnings, you have to ask yourself, why do you
- 4:08Speaker 2: want to penalize this very fast growing AI business? Look,
- 4:13Speaker 2: I can make the argument that Waymo. fairly could and
- 4:17Speaker 2: probably will ultimately be spun off.
- 4:18Speaker 3: And I don't even know if you think that's valued properly.
- 4:20Speaker 2: Waymo still needs capital. Waymo is going to lose money
- 4:23Speaker 2: for many, many years. And therefore, it makes sense for
- 4:26Speaker 2: that to be attached to a cash flow positive business.
- 4:30Speaker 2: But the benefits from Google Cloud to the advertising are
- 4:33Speaker 2: actually relatively limited.
- 4:36Speaker 1: All right. So the strategy, I think, is clear. And
- 4:38Speaker 1: this is one that we've talked about here on our
- 4:40Speaker 1: show about that issue, and that is that the centralization
- 4:44Speaker 1: of Google's products are really the problem. Now that AI
- 4:48Speaker 1: has really kind of reset the table, I think that
- 4:51Speaker 1: a spinoff on many of these products are going to
- 4:53Speaker 1: be in order. Be watching because I think their ad unit,
- 4:57Speaker 1: there's some core elements around what we've seen in the
- 5:02Speaker 1: enterprise side of things when you look at Gmail and
- 5:05Speaker 1: just Google Cloud in general. But I also think YouTube
- 5:09Speaker 1: will play into this of how they go forward. And then,
- 5:12Speaker 1: of course, the AI unit. I'm not sure about Waymo.
- 5:15Speaker 1: That's the real question, Mark, because it's got such a
- 5:17Speaker 1: long way to go to compete with where Elon is
- 5:19Speaker 1: heading on full self-driving. And that's the problem right now.
- 5:24Speaker 1: There's a lot of players that are competing on all
- 5:27Speaker 1: fronts with exception of a few. And one of them,
- 5:31Speaker 1: of course, is I think the golden child, which is YouTube,
- 5:33Speaker 1: and then possibly their cloud business, which is potentially a
- 5:39Speaker 1: little bit more competitive. So we'll see how it plays out.
- 5:41Speaker 1: But the point is, this starts to look pretty bad
- 5:44Speaker 1: for the market in general, and it could be signaling
- 5:47Speaker 1: the AI top and an unwind that could be happening. However,
- 5:51Speaker 1: there is someone out there, the permable, that says, no,
- 5:55Speaker 1: that's not the case. And that, of course, is Tom Lee.
- 5:57Speaker 1: He's saying, and this, of course, coming off the FOMC
- 6:00Speaker 1: meeting yesterday, I came away from that meeting very, very hawkish,
- 6:05Speaker 1: and much more bearish in terms of how this market
- 6:09Speaker 1: could respond with a couple of caveats. And there's many
- 6:12Speaker 1: things that could still come into this that are more
- 6:15Speaker 1: on the global macro side. But Lee says it right here,
- 6:17Speaker 1: inflation expectations holding, no need to hike. That's not going
- 6:21Speaker 1: to happen. We're going to see a hike in December.
- 6:23Speaker 1: Noted oil and rates are diverging dovish. I think that's
- 6:27Speaker 1: also a narrative that is not yet here. Oil is
- 6:30Speaker 1: still going to be a problem. The real question is,
- 6:33Speaker 1: what does it look like post midterms? And then CapEx growth,
- 6:36Speaker 1: not necessarily inflationary. It isn't necessarily inflationary unless we're dealing
- 6:42Speaker 1: with a complete unwind of the AI trade and we
- 6:45Speaker 1: start to see everything from neoclouds and many of these
- 6:49Speaker 1: AI projects starting to take some real hard hits. So
- 6:52Speaker 1: this is a lot different than I think a lot
- 6:55Speaker 1: of people are prepared for. So just pay attention. And
- 6:59Speaker 1: there was some things that he said yesterday, and I'm
- 7:01Speaker 1: talking about Warsh. that you have to pay attention to.
- 7:05Speaker 1: We drew this out in the meeting or in the
- 7:07Speaker 1: interview we did. We just came out of a heck
- 7:10Speaker 1: of a family fight. That simply tells me these governors
- 7:14Speaker 1: are in no way aligned. They are in a position
- 7:18Speaker 1: where we could see a very fast track toward advanced
- 7:22Speaker 1: rate cuts, or excuse me, rate hikes. Additionally, within this,
- 7:26Speaker 1: the last statement right there, is one that you need
- 7:30Speaker 1: to pay attention to. Five months into the job, Warsh
- 7:32Speaker 1: refused to take the bait from the topic of he
- 7:36Speaker 1: should be cutting rates because the president told him to.
- 7:39Speaker 1: So this is something, and he dodged a lot of
- 7:41Speaker 1: questions yesterday. So that also tells me that this is
- 7:45Speaker 1: a very, very uncertain Fed. So what do they know
- 7:51Speaker 1: that the rest of the market does not? We're still
- 7:54Speaker 1: seeing mostly the market in the red today. There are
- 7:57Speaker 1: a handful of flyers, and I'll explain one of them,
- 8:00Speaker 1: which is going to be hype, and we'll talk about that.
- 8:02Speaker 1: But I want to go to a clip real quick,
- 8:04Speaker 1: because this gets into the other major factor into this,
- 8:08Speaker 1: and that is the midterms. Take a look. He was
- 8:11Speaker 1: asked repeatedly about sort of where we find ourselves in
- 8:14Speaker 1: the political cycle. Like you can't ignore the fact that
- 8:17Speaker 1: the midterms are around the corner.
- 8:19Speaker 4: I mean, nobody will admit it. And even though the
- 8:22Speaker 4: increasing interest rate will not do anything to the economy
- 8:25Speaker 4: within the next five days, At the same time, people
- 8:29Speaker 4: might be unhappy. In my mind, looking at the language,
- 8:33Speaker 4: there is no clear justification for not raising interest rates.
- 8:37Speaker 4: The economy is strong, the inflation is higher than my target,
- 8:39Speaker 4: but we want more data. But the data is saying
- 8:43Speaker 4: that this is not the right interest rate for this target.
- 8:46Speaker 4: So the only explanation is, yeah, let's wait for the
- 8:50Speaker 4: elections to pass.
- 8:51Speaker 1: And it will be interesting to see how many governors
- 8:55Speaker 1: dissented on what this might look like. But definitely December,
- 8:59Speaker 1: look for it, guys. It's coming. We will see a
- 9:01Speaker 1: rate hike. The question is, is it a quarter point
- 9:04Speaker 1: or do they get aggressive on this? All of this
- 9:07Speaker 1: will come clean after the midterms because there's going to
- 9:12Speaker 1: be some very clear signals that come out of that.
- 9:15Speaker 1: Another thing that plays into this is AI. And the
- 9:18Speaker 1: Fed is somewhat sensitive to this. This was BlackRock talking
- 9:22Speaker 1: about how sensitive they are.
- 9:25Speaker 5: Was a lot more discussion on financial conditions. He kind
- 9:28Speaker 5: of opened with the financial conditions, unwilling and unable to
- 9:31Speaker 5: call them tight, but noticing the tightening and linking it
- 9:34Speaker 5: back to AI with this really important marker that AI,
- 9:39Speaker 5: interest rates matter to AI. So we're going to pay
- 9:42Speaker 5: more attention to that. And I think that's probably the
- 9:43Speaker 5: most important takeaway.
- 9:45Speaker 2: So, Jeff, is the Fed put alive and well right
- 9:48Speaker 2: now for risk assets?
- 9:50Speaker 5: Oh, our favorite topic. I don't know if I can
- 9:53Speaker 5: say it's alive and well. He's sensitive to it. He's
- 9:56Speaker 5: sensitive to looking at AI. We also got another piece
- 10:00Speaker 5: of information that we hadn't maybe heard before when he
- 10:02Speaker 5: answered the Korean reporter with, I'm really more focused on
- 10:07Speaker 5: your markets than you may imagine me to be. That's
- 10:10Speaker 5: really important because he understands just how important the AI
- 10:14Speaker 5: driver is to growth. But certainly what we saw this
- 10:18Speaker 5: month was the market sort of sniffing out that AI
- 10:22Speaker 5: is a macro event as much as it is a
- 10:24Speaker 5: micro event. And if there is a undermining of it,
- 10:28Speaker 5: it's going to be a macro event that is primarily disinflationary.
- 10:35Speaker 4: All right.
- 10:35Speaker 1: So there's a few things to look at that. Short term,
- 10:37Speaker 1: you could look at inflationary. This would kind of flow
- 10:40Speaker 1: into infrastructure and energy strain and also the electric usage
- 10:44Speaker 1: that plays into Long term, it could be deflationary because
- 10:48Speaker 1: just productivity and automation and possibly a complete shift as
- 10:53Speaker 1: we start to see other industries that will be affected
- 10:56Speaker 1: by many of these advancements. And I think we might
- 10:59Speaker 1: be on the cusp of something very big there. The
- 11:01Speaker 1: question is, can the market hold as that times in?
- 11:07Speaker 1: Because there's a lot happening in AI that up to now,
- 11:10Speaker 1: I don't think we've seen the major breakthroughs. I think
- 11:14Speaker 1: for the first time, we are now seeing major breakthroughs,
- 11:16Speaker 1: and that's going to value the product, which will get
- 11:19Speaker 1: these companies into profitability possibly faster. And that's the whole
- 11:24Speaker 1: issue with unwinding this. When you look at tech stocks
- 11:27Speaker 1: in general, it looks like a bear market out there, guys.
- 11:29Speaker 1: Is this a stealth bear market that we are entering?
- 11:32Speaker 1: I mean, look at CoreWeave. CoreWeave, I understand, being a neocloud,
- 11:37Speaker 1: but look at Coinbase, down 56%. You've got Western Digital down,
- 11:42Speaker 1: Oracle down 50, Arm, Circle down 44, Robinhood down 40.
- 11:47Speaker 1: I mean, this is, dude, this looks like crypto land
- 11:51Speaker 1: and it is the stock market. So think about that
- 11:56Speaker 1: and how does this fall out? Do we continue to
- 11:59Speaker 1: see this structure continue to get pressure heading into and
- 12:04Speaker 1: post midterms? Other points that play into this is going
- 12:07Speaker 1: to be the ant or anthropic IPO. And I think
- 12:11Speaker 1: this is a problem right now because it may be
- 12:13Speaker 1: another catalyst that could cause more pressure on the market
- 12:17Speaker 1: with some pretty heavy black hole scenarios that would play
- 12:22Speaker 1: out here. Because I think you're going to see a
- 12:23Speaker 1: very SpaceX-esque type approach to how the market will respond. Sure,
- 12:28Speaker 1: everybody's going to play it. There'll be a handful of
- 12:30Speaker 1: others that will start to get away from it. But
- 12:33Speaker 1: I'm getting away from it just like with SpaceX. And
- 12:36Speaker 1: then there will be an opportunity As AI starts to
- 12:39Speaker 1: mature and we do see the profitability and also just
- 12:42Speaker 1: the idea of where it's heading start to pay out,
- 12:45Speaker 1: and then you'll figure out who the winners are. And
- 12:47Speaker 1: this happens in every market. We've seen it multiple times before.
- 12:52Speaker 1: Look at this, though. This is Robinhood. This falls more
- 12:55Speaker 1: than 4%. This was their third, because despite of the
- 13:00Speaker 1: third quarter revenue, Revenue rose 12%. The problem is, is
- 13:03Speaker 1: that where it's earning it from and how that cycle
- 13:06Speaker 1: might play into this. So crypto revenue fell 55%. The
- 13:12Speaker 1: prediction market was the thing that was holding it up.
- 13:16Speaker 1: So play into that and understand how the market looks
- 13:19Speaker 1: and says, well, the prediction market may fall off after midterms.
- 13:22Speaker 1: This is a big deal that's leading into it. And
- 13:25Speaker 1: right now, that may be the case with Robinhood. Here
- 13:29Speaker 1: is Vlad trying to explain this. See if you think
- 13:33Speaker 1: it makes sense. Here we go.
- 13:35Speaker 6: Was event contracts in prediction markets made up a bigger
- 13:38Speaker 6: chunk of at least transaction-based revenue compared to crypto? I mean,
- 13:42Speaker 6: that's a huge.
- 13:43Speaker 1: Shift for you guys.
- 13:44Speaker 6: Are they kind of bailing on crypto to go into
- 13:47Speaker 6: event contracts? And what does that look like for you guys?
- 13:50Speaker 3: I don't think there's cannibalization. So I think now it
- 13:54Speaker 3: happens that crypto is in a relative winter. That said, though,
- 14:00Speaker 3: you also look at Robinhood Chain, which we launched on
- 14:04Speaker 3: July 1st. That's been a top five chain. Even though
- 14:07Speaker 3: that's crypto technology, it's fundamentally different than trading Bitcoin or
- 14:12Speaker 3: Bitcoin trading volume. So even within crypto, our business is diversifying.
- 14:19Speaker 1: All right, so you saw Vlad there. I think the
- 14:20Speaker 1: concern right now I would have, especially with crypto down
- 14:23Speaker 1: 55% in terms of earnings, prediction could get a little wobbly.
- 14:28Speaker 1: And the real question is, do we see an RWA explosion?
- 14:32Speaker 1: So watch the Q4 earnings. That, of course, will come
- 14:35Speaker 1: out in January. That is the one that I think
- 14:37Speaker 1: will be significant to keep an eye on. Other things
- 14:40Speaker 1: that are happening right now, you got Backpack and SK
- 14:42Speaker 1: Hynix coming to a partnership deal. This is going to
- 14:45Speaker 1: be bringing SK Securities to bring Korean stock market trading
- 14:49Speaker 1: to backpack users. More validation, I think, of where this
- 14:54Speaker 1: next generation of finance is heading. You have all sorts
- 14:57Speaker 1: of new players that are making inroads to old, basically
- 15:03Speaker 1: old model finance that are embracing this. And I think
- 15:06Speaker 1: that's the key with the market. Here's SK Hynix right here.
- 15:11Speaker 1: This is another one that has been kind of performed.
- 15:12Speaker 1: That's the weekly guys. These guys just went public not
- 15:14Speaker 1: too long ago, but there's the weekly chart up from
- 15:17Speaker 1: what was trading right there on its low at around 136,
- 15:20Speaker 1: holding at 161. SK Hynix, the Korean chipmaker for some
- 15:24Speaker 1: of you if you're new to that one itself. And
- 15:26Speaker 1: then if you look at the other token out there
- 15:29Speaker 1: that has absolutely taken off today, part in what we've
- 15:33Speaker 1: seen in the partnership with the NYSE, but also in general,
- 15:38Speaker 1: we've got Elon also tweeting about this. And of course,
- 15:41Speaker 1: that's hype. Up 17.8% right now, time of recording. This
- 15:46Speaker 1: thing is bumping into its all-time high, 95.10. I think
- 15:50Speaker 1: we're going to see this probably around the $ 100 mark
- 15:53Speaker 1: as the psychological question. And I'm going to ask you guys,
- 15:58Speaker 1: do you think hype starts to go up beyond this?
- 16:00Speaker 1: Because we've seen opportunities for a token to move with
- 16:06Speaker 1: a lot less narrative than what we're seeing right now
- 16:10Speaker 1: with Hyperliquid. And the opportunity of where this could be going,
- 16:14Speaker 1: especially with what Duffy was saying at Swell, his kind
- 16:18Speaker 1: of rant around what hyperliquid means for the next generation
- 16:24Speaker 1: of investors. I don't know, guys. Let me know in
- 16:27Speaker 1: the comments if you think hype goes up. I'm going
- 16:29Speaker 1: to say another 50% higher than what its all-time high
- 16:33Speaker 1: has been around $ 100. Let me know what you guys think.
- 16:36Speaker 1: As you guys know, we also follow what's happening in
- 16:39Speaker 1: the Bitcoin world quite a bit. And we have some
- 16:42Speaker 1: of the titans out there fighting it out. And you
- 16:45Speaker 1: got Grant Cardone challenging Jason Calacanis of the All In
- 16:48Speaker 1: pod after Jason kind of said this thing goes back
- 16:52Speaker 1: down in the 50s, talking about Bitcoin. And the situation
- 16:57Speaker 1: was simple. Cardone says he's going to bet Jason a
- 16:59Speaker 1: million bucks if Bitcoin breaks the all-time high of $ 126, 210.
- 17:06Speaker 1: before October 28th, 2028. I think this is a bad
- 17:11Speaker 1: bet for Jason. I think the other side of this
- 17:14Speaker 1: is that I think Cardone might win this, not Calacanis.
- 17:18Speaker 1: I think he might win this because I do think
- 17:20Speaker 1: Bitcoin gets another bid. Question is when and how does
- 17:23Speaker 1: it tie into this? Now, there are always factors that
- 17:25Speaker 1: could play into this that could still put pressures on
- 17:28Speaker 1: Bitcoin if, in fact, we are entering a bear market.
- 17:32Speaker 1: So Jason is very convicted on this. Remember, though, Both
- 17:36Speaker 1: of them are talking their book. Cardone, very heavy into Bitcoin. Calacanis,
- 17:41Speaker 1: very into the AI play. He wants that investment opportunity
- 17:45Speaker 1: of every investor out there to put into AI and
- 17:49Speaker 1: that kind of technology. So I get it. I love
- 17:52Speaker 1: to see it because I think it's fun. You know,
- 17:54Speaker 1: it's fun news. But anyway, we're going to cover this
- 17:56Speaker 1: a lot more this week. But guess what, guys? We
- 17:58Speaker 1: got midterms next week. That is going to set the
- 18:01Speaker 1: stage for the rest of this year and how these
- 18:04Speaker 1: market plays in will play out. And the real question is,
- 18:08Speaker 1: do we get a bid in terms of a little
- 18:11Speaker 1: mini bear market or a mini bull market based on
- 18:14Speaker 1: what the midterms will result in? Stay tuned. If you
- 18:25Speaker 1: like this video, hit like and subscribe, drop a comment
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- 18:31Speaker 1: The link is in the description.