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2025 Predictions & 2024 Prediction Results
213 Plays1 month ago
This week's episode is a bumper episode where we look back at our predictions from the start of 20245 and see how we performed. Plus, we make predictions for 2025 across the following topics:
- What will be the highest price BTC hits in 2025?
- What will be the highest price ETH hits in 2025?
- How many rate cuts will the Fed make in 2025? And by how many bps will they cut (in total)?
- Which area of crypto will get the most hype and attention/price action in 2025? And why?
- Will inflation in the US remain sticky or will we get back to 2% in 2025?
- What will the S&P 500 index peak at in 2025?
- You have to pick one crypto asset (excluding BTC, ETH, or SOL) that you think will perform strongly from today to December 31, 2025. At the end of the year, we’ll see which of us picked the best gain.
- You have to pick one publicly listed stock that you think will perform strongly from today to December 31, 2025. At the end of the year, we’ll see which of us picked the best gain.
- What’s your contrarian prediction for 2025 (across any topic)?
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Transcript
Welcome to 2025 and Recap of 2024
00:00:12
Speaker
Hello and welcome to the Decrypting Crypto Podcast. It's January 17, 2025. And this is Offchain, your weekly recap of the biggest stories in the crypto space. Our first episode back of 2025. We've all had quite a bit of travel, so we're just catching up. Of course, I'm here with my wonderful co-host, Austin Knight. How are you doing?
00:00:35
Speaker
I'm doing well, Matt, you know refreshed, excited about 2025. This is going to be a fun episode. you know Looking back at our predictions from last year, we had some hits, some misses, some near misses, ah and we've got some pretty spicy stuff coming up this year. I think this is going to be a really dynamic year for crypto and beyond.
00:00:59
Speaker
It's it's
Reviewing 2024 Predictions and New Forecasts
00:01:00
Speaker
gonna be dynamic. That's for sure um Yeah, so what we're gonna do in this episode is we're gonna go back through at the start of last year We we did all of our 2024 predictions. So, you know, we're gonna hold ourselves to account We're gonna go back through see how we performed against those and then lay down a Few different 2025 predictions. We kind of we've got a bit of structure to this. So we've set out um I think seven or eight questions that we're gonna ah we're we're We're each gonna answer And then we're going to give our prediction for each of them. And we'll we'll give a little bit of rationale. We're going to cover a few different areas, right? Like crypto, um some of the the the policy stuff that's going to happen, and a tiny little piece around equities as well, just ah to to mix it up a little bit. But why don't we kick things off with our 2024 predictions? Yeah, let's see how we did.
00:02:03
Speaker
Okay. 2024. We made a few pretty bold predictions, but, um, I don't think we did too bad overall, you know? but So for, for, for, for any of you that need a quick refresher, don't remember offhand everything that we discussed a year ago, we went through.
Bitcoin's Unexpected Peak
00:02:25
Speaker
What is going to be the Bitcoin peak price in 2024? It's going to be the ETH peak price for 2024. We asked the question, will the Fed reduce rates? If so, when will the first one happen? And what will the Fed interest rate be at the end of 2024? And then we went through and gave three open predictions for things that would happen in the year. So let's start with the the important stuff, the numbers.
00:02:51
Speaker
Um, let's kick off with Bitcoin. So we did this in January of 2024. I think we just had the BTC ETF. Bitcoin was trying to think where it was. It was probably at like the 50 55 K mark, something like that, maybe, uh, maybe a little bit less.
00:03:16
Speaker
You said the peak price for BTC would be 70K. And I remember saying, I'm feeling really bullish. I think it's going to be 79K.
00:03:31
Speaker
Well, we were very pleasantly wrong because the peak price ah December 17th just over 108k. So, unbelievable. I was 27% off. That was like the best type of failure we could possibly have there, I mean. I will fail at that every year, I'm happy. Yeah, truly. I remember during the episode we were saying, you know, there's some really outlandish, optimistic predictions that are putting it at 100k. And yeah, you know, we were not feeling so optimistic for a handful of what I think are at the time, like pretty rational reasons, you know, around the regulatory environment, inflation, Fed policy, all of that stuff, risk potential recession, that type of thing.
00:04:21
Speaker
Having i also at that point, at that point, item was kind of a lock-in like for for for another term. Yeah, that's what you thought Matt. Very true. um At least, at least like if we took a look at like the prediction markets back then. Yes, I mean, all of the data.
00:04:41
Speaker
All of the data pointed towards it, right?
US Politics and Crypto Performance
00:04:44
Speaker
so Yeah. and And macro was looking really shitty. I mean, it was it was not looking good at all. Yeah. yeah So what we were what we were thinking at the time was, and by the way, I joked, but you're right. Biden was a lock-in at that point. All signals were were pointing toward that. And so there was this looming fear of, you know could this this hostile regulatory environment persist?
00:05:10
Speaker
for an additional four years you know beyond 2024. And of course that would depress the the price of Bitcoin. um At the time, I don't think that you know we could really predict quite the strong stance that Trump would take on crypto either, which I think there's a fair argument to be made that that is a lot of what pumped the price you know prior to the election and after it. yeah you know I remember us a couple episodes after our January episode talking about how there was polling saying that crypto was like a top 10 political issue in the US election. And both of us were like, you got to be kidding me. Like there's no way that it's that important. And I was like, I was like, we're in our bubble. Like no one gives a shit about this. And also remember with Trump, right? In his first term, he was saying stuff like crypto is scam.
00:06:02
Speaker
like you it like okay Since then, he'd launched NFT collections, for that but he hadn't been open and public about crypto at that point. so It was such a drastic change through the year, a reversal in in many, many places. yeah um But you also you had a prediction as well, which will come on to a little bit later, which I think you know you got half right, but I think was was a pretty good one. um we'll we'll we'll we'll come We'll come back to that one. but Let's take a look at ETH price. This is what I'm most proud of. I want to get this one out there. So the peak ETH price was March 12.
00:06:43
Speaker
Which kind of sucks when you think about it, right? Man, we had such an absolute rip through Q4 across everything, apart from ETH. I am a very public ETH bag holder, and I just would love this thing to perform well. ah But it it hit $4,070, so $4,070 in March 12.
00:07:10
Speaker
You predicted 4,500, so you were not far off, 11% off. I predicted 4,100, so I was 0.7% off. That's probably the closest I've ever got to a price prediction, I think. ah So i'll take I'll take that as a win. It's um it's all win man. one ah you're you're right on the money there i i know ah based off of the numbers that i'm seeing here you know with our error margins i'd be better off just ah outsourcing my entire portfolio management to you carefulcap what you wish for austin a bunch of fucking pudgy penguins ah
00:07:52
Speaker
which, coincidentally, wouldn't have performed that badly through the last year. ah All right. Fed rates.
Economic Challenges and Rate Cuts
00:08:00
Speaker
This was a big topic and is going to be another topic right for this year as well, of course, and probably for as long as inflation is above 2% will continue to be a big thing. But I was I was very bullish on, on the fed reducing rates. Right. And we said, okay, will the fed reduce rates? If so, when will the first one happen? We both answered. Yes. First of all, the fed is going to reduce rates. You had a very different view to me on this. I remember at the time, so I said may you said Q3 and I remember kind of like flip-flopping around. Cause I was like, maybe it's before may.
00:08:40
Speaker
that this happens, I don't know. And then I was like, I'm going to hedge out a little bit just in case a few of that happens. You nailed it. September Q3. This was like, you got this bang on. And I remember you feeling very strongly about, about this one. Um, and, and that at the time was definitely a contrarian take, uh, for sure. Yeah. Yeah.
00:09:02
Speaker
Yeah, I mean, Powell has stepped up and done the the difficult job. um As I've said many times on this podcast, you know he failed in 2020 21 and maybe 22, but he's done some difficult stuff. Yeah, truly. um the you know the The last couple years, um he's definitely done the unpopular thing, but the thing that was necessary to do. and ah we'll We'll see what happens you know this coming year um and and if that trend holds true. but
00:09:37
Speaker
Definitely, um I felt at the time that the there there was a lot of um manufactured optimism and in the media around ah fed Fed policy and markets and inflation and everything like that, which though there we had other predictions related to that, um which we'll go through. um So this was an interesting one. Yeah, it was kind of hilarious because um you know we had that whole time of The Fed being extremely hawkish, it was getting close to September. It was like um in August, it was like, I don't know if they are going to cut, maybe they are. Then it was like, okay, September, they're going to cut. And then they went 50 bits. We were like, holy shit. And then it was just like, okay, let's go.
00:10:23
Speaker
ah but um So yeah and then, and then the yield curve inverted after that, you know, exactly. They, they, they took this 50 bips cut and then it's like, okay, well let's see how that does. I think, uh, had to have been the logic. And then it's like, Ooh, actually there were some really, uh, strong indicators of fragility and in, in the market with cuts, which as we've discussed previously on this podcast, you know, um, you, you can argue chicken or egg with this trend.
00:10:56
Speaker
But ah recessions tend to be preceded by some form of a an aggressive rate cut. um Now, maybe that's because we were already heading into the recession and then the Fed panics or something like that. But um I think that you know the the one mission that Powell might have had going into this year was like, don't cause a recession during an election year. um So there was a lot of effort to to not play with that fire.
00:11:24
Speaker
Yeah, well, um and I think on that on that note, our final prediction that we both got right related to this was actually what the Fed interest rate would be at the end of 2024. We both agreed that it would be 4.5%. We got that one correct. So at least we've got the dot plot ah correct. we We were solid on that.
00:11:46
Speaker
um All right, we went through and we did our three other predictions. This was kind of like a a a mixed bag of different things. um The first one that I really thought was was going to kick on was that Real world asset protocols will be a major crypto narrative in the second half of the year. And it's going to kind of kick off a new wave of excitement in DeFi. I think that the first half of the year, especially with the high um high bond yields, we did start to see a lot more happening in real world assets. And certainly there was a lot more adoption. we had
00:12:26
Speaker
BlackRock deployed their BIDL money market fund, but I'm going to say this didn't quite materialize because while there was like a lot of ah activity in RWA, I don't think it truly kicked off that wave of excitement across DeFi um for for it to really happen. No doubt it's expanded enormously um as a market vehicle. but I don't, I don't think I can get myself that one. Um, maybe, maybe over the next, uh, 12, 18 months, we, we see that start to happen. Yeah. i Your, your first prediction. I love this because you nailed this one completely. So, uh, I mean, the first half of this is no big surprise, but the second ah half of it is, is good. So you said there was going to be additional crypto regulation crackdown.
00:13:18
Speaker
Yes, definitely. I've been living through that one. ah And then you said, CZ was going to have a rough year, but probably so will Gensler. And this is the most bang-on prediction that I think you could possibly say. So, I mean, chokepoint 2.0 was in full of effect. CZ gets sentenced to four months in prison in April. This was prior to the predictions, any of this happening.
00:13:46
Speaker
Gensler basically losing every single um case that he did and then ending the year with his resignation. yeah you've You've absolutely nailed that prediction in every stretch. I think you need to just like retire from predictions after that. I know, oh man. I should quit while I'm ahead there. um yeah well What an interesting year, right? I think um Gensler, you know he he pulled a little Icarus there, flew a little too close to the sun. um And look, this ah this train will keep a rolling. um that I don't think that the US government or a hostile you know regulatory regime is is going to be able to stop crypto at this point. And you know of course, that's also wishful thinking, but I think that 2024 stood testament to that.
00:14:39
Speaker
Yeah. And I think it's kind of, it's now really strengthened it and we're, we're kind of seeing with friendly regimes coming, uh, in already a complete reversal, um, on that front. Yeah. All right. We'll blast through these last few. Um, I said an ETH spot ETF would be approved in Q4. Um, at the time there was a lot of euphoria around the BTC ETF, but everyone was saying ETH was not going to be approved. And I think, you know, even up to the last few days,
00:15:09
Speaker
of the the first approval, I was pretty dubious as to actually whether that was going to come true. I can give myself an orange for
ETH Spot ETF Approval
00:15:16
Speaker
this. Now I can't give myself a green. It didn't happen in Q4. It actually happened in July. So it was earlier than I said, um but it did happen. I'll give myself, you know, like uh a half a half point for for that man i would i would uh i would give you a hit on this because um it was contrarian to say that it was going to happen in 2024 at all and then for it to happen in july was like if even more of a surprise um so yeah awesome to see that go through you know there was so much uncertainty
00:15:46
Speaker
around the the eth ETF because of all again going going back to all of the regulatory scrutiny that was being applied to eth in general yeah it's looking like um um on the note of ETFs, looks like Litecoin might be, throwback, ah might be getting an ETF approval probably coming up soon. I think probably Salama will end up being soon after that. XRP is probably going to be the next one. That thing is just
00:16:20
Speaker
each With each of these ETFs, I think we're going to see a diminishing um impact on the value of the the crypto itself. right like With the Bitcoin ETF that caused a rally for Bitcoin despite excessive outflows um for a handful of reasons that we've covered previously,
00:16:40
Speaker
If didn't rip quite to the sort a lot of out flows at the start, actually, it was only as we got to the end of the year, but then it's start to like rip through and have yeah the irony is that actually the institutional like capital coming in from the ETFs actually was propping up. If it's a fair bit for. Yeah. So we'll see how they those those play out in 2025. But your Your second prediction was economic recovery wouldn't happen next year, um ah as in talking about twenty four the year the year ahead. Yeah, the real estate market would continue to struggle. Consumer price index, ah CPI would prove to not be fully under control. I think this is what you felt so strong about, right, was that inflation was sticky and it wasn't going away. And I was saying,
00:17:33
Speaker
Don't worry about inflation. we're we We're all good. ah Layoffs will continue and spread to other industries. Wars will continue to be a problem, ah likely social unrest and chaos, but good opportunities to purchase assets. I think i get there's a lot in here, right? So you made multiple predictions. So let's say definitely some of this is correct.
00:17:55
Speaker
Economic recovery will not happen next year. I would say it started to happen, right? There's one thing that's undeniable that the US economy proved way more resilient than yeah actually anyone thought. um So I think that that was happening. You definitely got the inflation ah piece proved to be way stickier than we thought. Loads more layoffs happened and Fair amount of social unrest, it's fair to say. um Yeah. I'm still undecided if it was a good year to buy assets or not. Yeah, a me too. I mean, you know part of my problem is that I also consider exotic cars to be assets ah going back to, you should manage my portfolio. That's a personal financial problem you have. we It was a great year to buy a Lamborghini.
00:18:45
Speaker
um ah I think 2025 is going to be Lambo City. ah So why not? I mean, you know, it's it's interesting because I was I was looking recently at the um collectibles market and luxury and in particular watches and nearly every major watch manufacturer has seen declines in in its like asset values of like it's by and large it's like um luxury collections. Interesting. Except for Cartier.
00:19:23
Speaker
um So Cartier has been one of the only brands that has seen like asset appreciation across the aggregate of um of its watch brands. So interesting little data at point, but by and large Cartier shouldn't have done that. So, you know, that's a, I always felt like Cartier was undervalued um and in the the luxury watch market. And maybe, you know, Rolex was,
00:19:50
Speaker
Overvalued, it's high production, lots of hype, everything like that. But man, the the the luxury watch market is so bizarre. it's I guess it's ah similar in some ways to not like modern exotic cars, but classics, like maybe mid-century, like 60s, 70s, blue chip, Ferraris. Yeah, 100%. Maseratis, things like that. Yeah.
00:20:15
Speaker
Yeah, there there are like a lot of like timeless classics and it's all about entry point right into markets like that um for for sure. But I think there's been a lot of depression in luxury goods in particular and luxury collectibles because of the just general downturn in the luxury market driven by China as well. So probably 2025, things start to pick up, rates maybe go down.
00:20:40
Speaker
could be a potentially a good buy, not financial advice. yeah you know so all right ah the the last The last two, I think these two are a good hit. so I called on the inverse of you, we completely escape a US recession.
00:21:01
Speaker
equities have a big rally in Q2 and Q3 and it's led by tech. I think that's a definite green check. S&P
Political Predictions for 2024 Elections
00:21:09
Speaker
moved up from just over 5,000 in April up to 57, 60, up 15% by end of September. And we know who was driving that. It was basically one company ah and Nvidia and no recession much to the the surprise I think of of of many many people but um I think that was a good hit but I think personally this is my favorite so you get your last prediction you technically get wrong but it was such a contrarian take that I think just the the
00:21:46
Speaker
the ah The notion of it was was right, the direction of it was right. You said basically that Joe Biden would not run and it would be Gavin Newsom and Donald Trump um that would be the US presidential candidates. Calling Biden not running.
00:22:02
Speaker
I remember saying the time I was like, you are crazy. Like there is no way this happens that Biden doesn't run. And, uh, yeah, you, ah you remain strong with that all year. And while Newsom didn't do it, I think it was only because Newsom didn't want to do it. Right. Like, I think he saw it as probably the wrong. It was a suicide mission. Yeah. Yeah. yeah Yeah. I mean, I remember in the episode, we talked about this and I said that the one problem with this theory is that they have to kick Kamala to the curb. Yes. um And that doesn't really play well for a party ah that is like really fixated on identity politics, right? Because she was like basically brought in as you know the first woman of color VP and everything like that.
00:22:50
Speaker
oh So it would be insane for them to, you know, she's naturally next in line. It would be insane for them to kick her to the side for a white male. yeah Why did I say Gavin Newsom? The reason being I felt at the time and actually I so i still.
00:23:09
Speaker
feel you know for for that election, perhaps not now, given the fires in California, it's quite a problem for him. But I feel for the 2024 election that he was the the best shot that the Democrats had at winning. I thought that his debate performance against DeSantis um was ah you know really strong, regardless of the merit of the points that he made, the guy is an incredible politician and political mover. um So my thought was like logically, you know, if the Democrats want to win this election, and they can't do it with Joe Biden because of his, um you know, decline, his physical mental decline, which had become obvious to me at that point, but maybe wasn't part of like the mainstream narrative at the time, um then they're going to have to run Newsome. Now,
00:24:02
Speaker
um I also think that there is a you know beyond 0% likelihood that the Democrats looked at this election and said, maybe we need to write this one off. yeah And maybe we need to come back strong in the midterms. That could be a little bit of like a contrarian prediction because everybody thinks the Republicans are going to run the midterms. But like, gotta keep an eye on that. um And maybe maybe they come back after Trump's second term with, you know, with somebody like a Newsom or an AOC, I don't know. so Somebody that totally surprised me. I think, you know, it like it also wouldn't surprise me if
00:24:40
Speaker
there is just a whole new net new like more populist yeah than candidate like I think it's at that level right but I think the Newsome push I don't know if there was anybody that could have beat Trump in this election but when be due to the timing of when they changed candidates Right? Like you just, it would not have given Newsome enough of a platform, especially right after the assassination attempt and everything that happened there to make it happen. And yeah, you know, he's he's ah he's a really strong ah candidate for Democrats. You want to waste that, right?
00:25:16
Speaker
For sure, I mean in my opinion it would have been so tight because I think like Newsom is one of a handful of people that could handle Trump like um You know, I don't I think that Trump would have a hard time um Embarrassing him or pushing him around um Like he has with other candidates to me Gavin Newsom is like the frickin, you know Justin Trudeau of the United States like ah a a a truly, you know capable ah political mover and orator. um So probably they probably loves ski resort as well, I imagine. Oh, man, he he loves French laundry, especially when everything else in the state is closed. um so Yeah, anyway, um, okay, should we move on to 2025? Let's do it. Let's jump right in.
00:26:11
Speaker
Okay, 2025 predictions. This is where we yeah will you we we lay down our stakes in the ground. We're going to quickfire a few of these. We have quick rationale for each, but um I'll hit the question and we'll alternate in what our predictions are. You can ah ah you can go first, I'll go i'll go second. so We've got to do the first one, right?
Crypto Price Predictions for 2025
00:26:34
Speaker
What's going to be the peak price that BTC hits in 2025? It's the question everybody's asking. Um, both of us were really conservative last year, uh, you know, with our predictions. So I'm going bold, but not as bold as I think I could. Um, and I'm coming in at 200 K.
00:26:55
Speaker
Which is, yeah, I know. it's That's like a double in. So what is what is my rationale for this? um One of which is the, I do think that there's there's more to be had with the ETFs. I think that the regulatory environment is going to be cleared up and be favorable.
00:27:13
Speaker
this year. I think that the Bitcoin having effect still has to land. I think that um in general market sentiment is going to be positive. There will be headwinds um this year, but I think that as you've said previously, Matt, the the next 12 to 18 months are going to be some golden days to make some money in equities and crypto. So ah that's that's where I'm coming in with Bitcoin 200K.
00:27:44
Speaker
All right. Ooh, I'm being bearish. ah you know not I'm actually, as I've made very clear, I'm very bullish 2025. I'm gonna say 155K. And here's why. I still think that's a great price. um And like maybe we blow past it and I'll be extremely happy. ah my My theory here is that
00:28:12
Speaker
I think there's a lot of great catalysts to push BTC price forward. I'm also going to say, I think we hit 150K by the end of Q1.
00:28:23
Speaker
Right. So here's what here's what I think is going to happen is my main piece around this is that the strategic Bitcoin reserve starts to get delayed, delayed, delayed, starts to turn into more of a crypto reserve, which I've started to see Trump start to discuss.
00:28:50
Speaker
that may combine not just Bitcoin, but other things. And I think that maybe what this does is it puts this ah just a ton of euphoria into more of the like alt coins that are non Bitcoin. And we start to just see this like flood of capital on that. I still think Bitcoin is going to have a great year. And maybe this runs into 2026 where we can rip through. but I think there just could be a few headwinds that just limit out the the top. Make no mistake, 155K would be still a great place to be for sure. yeah I will tell you, my gut feeling is that you're closer than I am, but I don't want to be the guy that's predicting 70 when we hit 108. No, we'd have to close down the podcast, Austin, if we're getting 70 this year. ah All right, Ethan, I will first on this one. I actually feel like I'm getting a little bit bearish and maybe this year is like...
00:29:47
Speaker
tainted me a little bit on ETH, but I'm going with 7K. And ah last year, I was like, you know, for me, it's ETH 10K. ETH 10K, yeah. And i really I really want that to materialize, but I have an inherent bias, I think, to that happening.
00:30:05
Speaker
So I'm going to go with seven K. I, I don't think that if doubling is a top is like a tall order here. When we have an ETF already, um, momentum is going to pick up. I think that there's going to be a lot, a big narrative that starts to all come together and rally around Eve. Whenever I see people hating on Eve, it just makes me more confident that Eve is going to perform well.
00:30:32
Speaker
But I think if I had to take like a similar kind of approach and say, all right, we hit seven K this year, I'd take it. And I think that's probably going to happen in the second half of the year versus the first half for sure. Yeah. So here's where I flipped the script a little bit. I'm at six K on ETH. Don't do it to me, Austin. i know' good to me Yeah. Uh, I know that like logically speaking, it should probably be heading up toward 10 K.
00:31:01
Speaker
yeah um Given the the market factors ah that we are predicting, but um I do think that there is a a lag behind ah the market and behind Bitcoin. so Yeah. and there's There's a big mindset at all, I think as well, right? like even I need to park aside my biases against things like XRP but it's you know things like that take in front and center to stage so all these other like coins are in the vine for the same buyers right outside of BTC it's only gonna heat up um so it's all gonna come down to can eat.
00:31:41
Speaker
gather mindshare, right? All right, okay, so 155k BTC, 7k ETH for me, 200k BTC, 6k ETH for you.
00:31:56
Speaker
we'll do We'll do the Fed rate cuts in a second. but let's Let's just very quickly talk about, um we we asked a question like which area of crypto will get kind of the most hype, attention, price action in 2025.
Emerging Technologies and Market Trends
00:32:12
Speaker
um i can ah I can just start with my my take here is I actually think we're gonna run it back to the like, 2021 playbook in parts of alternative layer one blockchains. um I think, you know, if we we had a lot of hype around layer twos for Ethereum, but I think for some of the reasons that we were just saying there around Ethereum and like the scaling stuff, the narrative around it,
00:32:44
Speaker
Um, I, I think that people, it's it's becoming a bit of a Rube Goldberg machine of like many, many layers. And it's confusing. I think there's a really strong value proposition for high performance, single layer ones. And we've seen that, um, with the likes of hyper liquid, um, which has been.
00:33:06
Speaker
an absolute monster of ah of a launch s suite which came out of the, um was spun out of Facebook and is now performing kind of really well. I think that as like one piece, I would love to say Bitcoin DeFi but I I'm still a little unsure if it's going to be able to garner the attention just yet this year. um I still feel very bullish on like Bitcoin layer 2s and the Bitcoin DeFi ecosystem, but I think that's probably the the though the one. If I had to pick one, I would put my hat on, it would be that. What about what about on your side?
00:33:42
Speaker
Yeah, my pick was AI agents. I don't think this will really come as a huge surprise to anybody. you know There's obviously a lot of hype around AI in general, um some of which is legitimate, a lot of which I think you know will eventually peter out once we start so to find some of the legit use cases for AI. um But potentially, a legit use case for AI is ah interacting with DeFi. And so you know I think that that is an interesting space for an AI agent to sit. And then you add the fact that there is a lot of venture capital
00:34:21
Speaker
being put into um into AI agents and AI-driven crypto projects, Andreessen Horowitz being you know one of the larger entities that's pushing that. And they have for quite some time, I recognize. yeah But then you want the AI 16Z as well, the AI agent. And we've seen a lot of this. I think at that point, it's like,
00:34:46
Speaker
I've been s skeptical about AI crypto for quite a while, and because it's largely focused on like decentralized compute. and i'm just like I feel like this is one of those many situations where we've just slapped a blockchain on it and said it's better and it's not. um AI agents, it feels to me like, could Because there's many, many use cases for AI agents, not not just like the trading bot stuff that we're starting to see. But um I think this is the one thing that could ah kind of cross the chasm between non-crypto people yeah for for real use case. And I think we could start to see that happen. I agree with that. Is 100% the driver behind why
00:35:31
Speaker
this is standing out to me because, um, for the last, how long have we been doing this? Like seven years more 2017 was when we did our first, uh, first one. So, um, since the very beginning, we've we've talked about one of the largest barriers to adoption for crypto, just being the way that your average person has to interact with it. And it's so difficult and confusing here. You might have, um, something that, that solves part of that problem.
00:35:59
Speaker
I actually kind of feel, in in this in some ways, there's a part of that story that I have of the standalone layer ones. um like I was playing around with Sui um the the other day, and i because I hadn't spent a huge amount of time in that ecosystem. It's still relatively early in this grand scheme of like app dApps being built, stuff like that.
00:36:20
Speaker
I was like, okay, ah can I just use MetaMask? And I was like, um no, I have to get like a sweet wallet. But it was just, you know, sign up with Google OAuth. There's my wallet. Everything was abstracted. ah Fund it in the wallet. Quick place transaction. Done. I was like, oh, whoa. Okay. you know It's just like everything's a bit more UX first. I think that's why Solana did so well, especially in the last cycle, because you had like Phantom Wallet and it was just like, oh, this is like a consumer app, right? you know And um I think the the the same applies and I think, yeah, but i think it has been really ah someone that's quite skeptical around anything that gets AI slapped against it. I can see the use case here.
00:37:03
Speaker
so yeah All right, cool. Your AI agents, L1s performing ah the the top ones, we'll come back on that. Let's go to our favorite topic. How many rate cuts will the Fed make in 2025?
Inflation and Economic Expectations
00:37:20
Speaker
And by how many bips will they cut in total, if at all? Or maybe they hike, whatever whatever you say. Go, you go out first, Austin. ah Two cuts, 25 bips each, 50 bips total.
00:37:33
Speaker
All right. um I'm joining you there. I'm joining you there. I'm glad that you weren't going to come at me with some great hikes. That would kill me. That would kill me. I'm in alignment here. i was um There was a part of me that was like maybe maybe just the one, um but I would love for us to be wrong on this, uh, where we're wrong to the downside and we get more, uh, rate cuts, but we'll see. All right. Maybe we both, I think, I think we'll do well on that one. Yeah. Related to this.
00:38:12
Speaker
Let's see, this is where we often disagree. So, will inflation in the US remain sticky? Or will we get back to 2% in 2025? I'll go first on this. No surprise, I'm almost certain we're going we're go to be in different boats here.
00:38:32
Speaker
2% in 2025. Let's go. I think it's going to happen. US inflation will will hit 2% 2025. I think it's going to happen in Q3, but I'm going to inject some healthy Austin Knight Inflation pessimism. I think it picks back up in Q4 and we all start getting worried again and things start to like have a bit of a ropey end to the year as a result. Yeah. I think that's a pretty good call. My thought on this is that it's sticky at 2.5%. Which had to do with Austin, didn't you? You had to do it. Party pooper.
00:39:16
Speaker
I know, I know. um As I mentioned at the top of the episode, I think this is going to be a dynamic year. We're going to see indicators that would historically be tied to each other um behave behave in ways that are that you know on the surface look somewhat independent of each other. And that's because of some of the underlying factors ah that we've talked about ah earlier in this episode. And so that leads me to sticky at 2.5%, but that's not as bearish or concerned as I was this time last year. um i I do think that ah overall, this is going to be an economically, overwhelmingly positive year. um But with some of that growth, well what we we will have you know less less depression of inflation, if that makes sense.
00:40:07
Speaker
Yeah, I think I agree. I mean, well, we just had the print in the way, right? So it's 2.9%, I think, um with a real nice downside surprise on core inflation, which was which was good. um We're obviously going to focus on headline inflation for for this. but Yeah, my my my thinking actually is that I think the economy remains resilient, remains really strong throughout the year. And I think it makes a bit of a tough decision for the Fed. I think there's going to be um pressure that comes around the housing market that I think will start to push ah for rate reductions in the US. I think that will be one of the things that might tip them over the edge.
00:40:48
Speaker
I think you're right about that um you know that. Housing prices have come down substantially, um not across the board, but in a lot of markets that matter. ah But everything is totally unaffordable, ah despite that, because you rates are so high. Unfortunately, housing prices still haven't come down to the, to the level that they need to before we start like really cutting rates and making things affordable again. Um, but a lot of progress has been made, so they're going to start to feel the heat. ah Yeah. And and just cause I, I w my, my thinking here is, and one of the reasons why I believe actually on the, the two, uh, reaching the 2% target, by the way, is that, um,
00:41:35
Speaker
Goods inflation I think is going to dramatically cool because I I don't believe So companies had an absolute tear with you know raising prices through last year. Consumers just about you know were accepting of all this. I don't think there's any breathing room for that now ah coming into 2025. I just don't think consumers are going to accept any more price inflation. I think it will really start to hurt the owners. I just don't think companies are going to have the
00:42:09
Speaker
flexibility to start pushing that. Okay. Service price inflation. We may start to see a little bit of that creeping up still, but, um, but yeah, well, let's talk about something that's kind of related right to all of, all of this. I'm going to dig a little bit into, um, kind of the equity market with these, with this next two. What do we think the S and P 500 is going to peak at in, in 2025? I think we're at.
00:42:38
Speaker
Was it 29? Let me just quickly check where we're at S and P 500. I thought we were at 29 50, but just so we can get, Oh, we're up percent today. So 29 88. Um, let's, let's call it. We're pretty much at 6,000 right now. What's going to be the peak of the S and P, uh, in, in 2025? What do you think Matt?
00:43:02
Speaker
I'm going to go $6,700. I think that we're going to see similar dynamics to last year in some cases in that a relatively concentrated bunch of companies are going to drive the majority of that growth.
00:43:27
Speaker
um I do not think that AI stocks will slow down. I think that's going to continue even with all of the discussion around tariffs and everything else around around that.
00:43:42
Speaker
I think Tesla has basically got some kind of like you know immunity cloak that it's going to wear for a little while because it's Elon. ah That's going to bump up. Meta and a lot of like those platforms that were at Alphabet, ah Microsoft, ah where we start to see more flexibility around the kind of anti-competitive, like M and&A blockers, stuff like that, starts to... um so see that Basically tech is benefiting from deregulation. um I think that's going to be a driver, but I i so i still think there's going to be pockets of pain um in in the market, especially those that are going to be more sensitive to to earnings um and in areas where
00:44:30
Speaker
rates will hurt them more than others. So yeah, I've gone kind of like a and I mean, it's obviously bullish saying that, you know, S and&P will drive into its like uncharted territory, all time highs, but it's slightly lower than some analysts project. So 6700. Yeah. Yeah. It's a good prediction. I came in at 7000. So it's we're in the same band. I think 7000 is upper band or upper. Yeah. the the The upper ceiling of that band, if you will.
00:45:03
Speaker
um Why do I feel this way? I think that you know ah those those interest rate cuts that we talked about earlier, although they they seem you know fairly minimal um to a so throughout the history of the last decade or so, um I do think that they will have an effect on this. I think that yeah everybody's looking at tax cuts um having an effect. And then I agree with you ah about um the the AI effect in two ways, actually.
00:45:32
Speaker
um the ah ah the the equities of ah companies that are building. AI or selling AI in some way or another and then also ah just productivity gains that are regardless of how material they are they are going to be reported to the market.
00:45:51
Speaker
um you know across many industries. And ah you'll see some hype about that. I can definitely, definitely see that for sure. And also you know on the rate cuts, when those things happen, I think there's going to be disproportionate upward movement in the markets, like if they' especially if we get any in the first half of this year. it like muck So that's that was the the the next part of my thought on this is that I do think that there's the gains, the majority of the gains that we're going to see are going to be in the first half of the year. And then there could be a pullback later in the year um for for that reason, among a few others. just there There's so much market confidence um right now. So let's see. All right. We're going to have to go quick here. We've got about just under 10 minutes. I think we could cover this.
00:46:49
Speaker
Let's pick.
Investment Picks for 2025
00:46:50
Speaker
Right. We're going to pick one crypto, but let's start with ah an equity to begin it ah to begin with. Right. We have to pick one publicly listed stock, which we think is going to perform strongest from today versus we'll look at the price December 31st, 2025, and we'll see which one of us picked the the winner. I'll i'll let you you go first. Who you picking? OK, I know everybody wants to pick like Nvidia or Tesla, and I don't even think those are bad picks like you know that that that A lot of that makes sense to me. They're top line stocks that everybody's familiar with. so I went with Sentinel-1. It's a cybersecurity company that that is building AI-powered cybersecurity solutions. um Look, AI is basically going to be warring with itself ah for
00:47:40
Speaker
for the foreseeable future. um So anybody that can claim to address that with a more powerful cybersecurity-oriented AI, I think is going to do well.
00:47:51
Speaker
i you know I think we're we're along similar lines here. It's you know the the beta almost to like the core AI producers we're we're kind of looking at and anything that's jumping on that or solving for some of the problems. So I'm going with D-Wave Quantum, so QBTS. this um they're They're developing um quantum ah computing ah technologies.
00:48:17
Speaker
and of the Willow ah kind of announcement from Alphabet, they ripped off. And then you know Jensen Huang said, hey, actually, you know quantum's way far away. And then all the quantum starts to rip back down again. um My take here is, and I want to be clear, I don't think necessarily D-Wave are doing like the most innovative stuff. And actually, quantum, they're going to have this giant breakthrough, what I do believe.
00:48:41
Speaker
is We are gonna start to really begin a detailed discussion about the future of compute and how it dramatically scales and I think quantum term will have it's like um You know when like AI first started getting talked about in like the 2018 period like seriously, but everyone was kind of bit like It's so far away. But people were like beginning this the real speculation. I think near the end of this year, we're going to have the big quantum hype that's going to come up again. And I think it's going to be because we see another breakthrough similar to Willow. And people will just pile into these stocks. D-Wave is at a $1.56 billion dollars market cap, so $5.76 stock price that are clocking in. It also just had like a partnership with Karasoft, which means
00:49:28
Speaker
they can technically sell into US s government agencies. So this, I'm going to pick this one as like, it's pretty low cap in the grand scheme of tech. And I think it will just benefit from tailwinds. And if I had to pick like a, what could, what could rip? ah i'll I'll gamble on that. But I am ah obviously optimizing for, you know, what could be a potential big gainer? um This wouldn't necessarily be like my top stock pick, right? Kind of thing. Yeah. Yeah. All right.
00:49:55
Speaker
Um, let's do the same for crypto. Um, I'll go first cause you went on the last one. I'm going to pick hype. Uh, so hyper liquid, um, it's an L one. Uh, it has been on an absolute test since its launch. It's ripped up all the way from, I think like a one to a 23.57 billion dollar FDV. Um, it's.
00:50:18
Speaker
a fantastic product, it's been garnering a lot of attention. Currently at 23 bucks, 53 cent, I think this at least doubles through the year, if not more, and would not surprise me if ah hyper liquid starts challenging for being one of the top 10 tokens by end of year. So that's my my take. What are you going for, Austin? I'm going with Doge.
00:50:47
Speaker
You can't get away from it. The the meme value with Elon. i know um Yeah, you know, I think that ah this is basically just it's it's almost like putting a bet on Tesla or putting a bet on Elon or putting a bet on the Department of Government Efficiency. um Is that what it is, or efficiency or something? Yeah, yeah, yeah. The Department of Firing the federal staff, I believe. Yeah, you know, it's like purely based on meme value. But um look, I mean, um probably a, you know, i I could have said Cardano. I mean, you know, yeah, I think a lot of people want to say that.
00:51:33
Speaker
Um, but I think that doge is at least an easier one for people to wrap their heads around, believe it or not, because it's so simple. So I could see it. It's, it's at like 42 cents right now. I could see it hitting a dollar, maybe that's what everyone wants. Yeah. You know, I, it's crazy. Cause every time I look at doge, I'm like, this thing can't go higher. It's like $60 billion. dollars fdv Like this is kind of crazy, right? Like what are we, what are we talking about hip? but yeah You know,
00:52:02
Speaker
If Q4 taught me anything, um it's don't fade doge and the the value of it. yeah One of the things that I kind of took a few notes of just like other stuff I think might happen here and it kind of falls into this.
00:52:18
Speaker
As much as it pains me to say it, I actually think that during 2025, XRP will briefly flip Ethereum at some point. they say I think it's going to be temporary, but it will become the number two asset by market cap. Interesting. Interesting. So you know we can hold me to that. I don't want that to happen, but I think i think that's going to happen as well. um All right, last one.
00:52:46
Speaker
What's your contrarian prediction for 2025? This could be across any topic at all. Yeah. Well, Matt, we've talked so much about US politics. Uh, now I'm going to put the spotlight on you. Um, I think that Starmer could face Trudeau's fate in 2025. And this is purely, yeah this is another Elon bet.
00:53:10
Speaker
maybe It is, yeah. um you know As as ah our listeners, I'm sure, are aware Trudeau has resigned, but not really. It's a little bit of a weird process that he's going through, but clearly has come to ah his his political end um in Canada, and the Liberal Party there is you know trying to pick up the pieces. I think Starmer comes under an insane amount of pressure in 2025 and could potentially be even ousted um as as PM. Now, ah why? Well, we talked about the prediction around political unrest in 2024
00:53:52
Speaker
That was correct for the United States. It was much more correct for the UK and the European Union, I think. And I think that that continues um going into 2025. I know that there are some incredible scandals um that you all are are dealing with right now that Starmer has been Kinda see his, his, his, his, my, his, my thoughts on I obviously have a lot of thoughts on this. So I, I'm in the strong disagree with this. Right. Okay. But I like it. Here's what I would say as for.
00:54:27
Speaker
especially all of the non-UK listeners thats that like see a lot of stuff on social, a lot of the like quote-unquote scandals, right they absolutely were huge events that happened, like probably the most ah talked about one is like the child grooming kind of like um ah scandal that happened maybe 10 years ago. right In the UK, this is like This is not part of like the news cycle here. right that this was disca This wasn't just uncovered. this was just This was a massive thing at the time, and the conservative government were a part of this. The the whole piece around, like um um I'll just also say, I'm not a big Starmer fan, um but Starmer is not. Don't get put in jail, Matt.
00:55:17
Speaker
Yeah, exactly. yeah like Starmer is not culpable for this. A lot of the like rhetoric around this stuff is just like tenuous links. I think he was like technically um ah in in the ah position that could oversee some of this stuff for like four months. So many things have been pulled together. i think so So a lot of the like you know I think a lot of it's like manufactured social unrest that lives in X. And I see it all the time and I'm just like, this is kind of crazy. and try and Stama and the Labour government at large, Elon's obviously on an all-out attack. He's put his support behind the Reform Party, which are a very dangerous party in in my opinion that have nowhere near as weight as it probably seems today, ah but that that will definitely change by the next election, which is a long time away, right? um I think Starmer is very stable, honestly, in his his job. I think he's in a position now where
00:56:18
Speaker
The UK economy is about as bad as it's got. Or they like the state of the UK is about as bad as it got from the conservative government that's this's been in. We've hit absolutely insane bond yields in the 30-year, albeit.
00:56:32
Speaker
the exact same bond yields that the US is facing. The difference here is that the US has the dollar, and the UK has the pound, and the pound has been absolutely crashing. um so yeah I'm not going to go too deep. We'll discuss this, but you can definitely say, I told you so if you do this. This is your Gavin Newsom prediction for this year.
00:56:56
Speaker
I'm going to go on my one. um that There will be no net new wars or major conflicts between any countries in 2025.
Geopolitical Stability in 2025
00:57:06
Speaker
I think that's my my view. It's going to be ah a year of like loads of chaotic things happening, but I think there'll be nothing new.
00:57:12
Speaker
and um and i think that day um The the ah Israel-Palestine war will, quote unquote, end. I mean, it's never really ended, but you know what I kind of mean by that. I also think the Russia-Ukraine war will come to an end. Don't think anyone's going to be happy about any of it, um but it will happen. And I think there will be nothing new in 2025.
00:57:39
Speaker
All right. Um, for what it's worth, I totally agree with you on that. Um, I think that, uh, people aren't going to be happy about the way that those negotiations end up. Um, which is going to shockively be, uh, maybe we're on the opposite side of this. I think Russia is going to get what they want. Oh no. I think Russia are going to get what they want. I don't think they're going to be happy. Um, yes. Yeah. yeah Sorry. yeah yeah Yeah. I think we're going to be delighted with what's happening.
00:58:07
Speaker
Yeah, I think they're basically like whatever the front lines are right now. Russia is going to keep it. Yes. And that's how it's going to go. ah But I also think that ISIS and and a lot of these like skirmishes, you know, Houthis, all of the these like random, small, hot wars that that get a little bit less player also going to um disappear with potentially Western Europe being a little bit of an except not for like hot wars, but for terrorism. yeah um You know, I think that there's still but there's still a lot to pay attention to there. How about this, Matt? I've got one bonus.
00:58:42
Speaker
for you. Can I do a bonus? Let's do a bonus. Um, this is very niche. Uh, I, I think that inflation of the Brazilian rail goes potentially parabolic, um, in 2025 potentially to like one, one to 10 with the dollar right now it's been hanging out at like one to six. Um, you know, yeah, like you could be looking at a Argentina round two, maybe not that extreme.
00:59:10
Speaker
But we're only a couple years into Lula da Silva's presidency, the socialist president that has been reelected for the third, or depending on how you view it, fourth time. um And they the the Supreme Court of Brazil recently subpoenaed Google to remove the inflation calculator from Google. It was crazy. When I was in Brazil,
00:59:33
Speaker
Um, a couple of weeks ago, I was looking at purchasing an apartment and I was like, Oh, what is like this amount of money in the dollars? And I went to look it up and like, I couldn't find what it would be. Um, and that's because they, the, the currency is so volatile. It's become a real issue for them. And historically speaking, once you hit that like six to eight Mark of like, you know, $1 for six to eight of whatever South American currency you're dealing with.
01:00:00
Speaker
it it It is at extreme risk of going parabolic. And also- And that's when you have Capitol flight controls come in, things like crazy pack runs, and you know you've seen that with the Argentina and Pezo, right? Yes. And and also um the the government the Brazilian government just sold off something like $3 trillion dollars worth of USD reserves, um which they at this point, they practically completed completely depleted their USD reserves. so Keep an eye on that. That's going to be good for them, I imagine. Viva Bitcoin, I say. i Keep an eye on it, man. it's It's going to be interesting. you know um it's I don't think Brazil is going to collapse. Don't get me wrong. you know um But it'll be volatile.
01:00:41
Speaker
Oh yeah, that's why we have the IMF, right? ah ah So so you you're saying ah that the Brazilian countries currency is going to go 1 to 10 to the dollar? um I guess my outlandish bonus take is that XRP is going to flip Ethereum at some point through the year. We'll call it that. All right, brief recap.
01:01:04
Speaker
ETH price, I'm saying 7K peak, you're saying 6K, BTC, 155K, you're saying 200K. We both agreed the Fed will cut twice, 50 bits in total. You're saying the biggest hyped area with attention and price appreciation in crypto is going to be AI agents. I'm going for alt L1s.
01:01:27
Speaker
Inflation, you're going to say it's remaining sticky in the US, 2.5%. I am saying it's going to hit its 2% target, pick back up in Q4. S and&P 500, I'm saying it peaks at 6,700. You're saying 7,000. I think you're more bullish this year. I've just realized this.
01:01:43
Speaker
crypto crypto asset that's going to appreciate the most. we By the way, it's worth a call now. we we I meant to say this, we were not allowed to pick BTC, ETH or SALT. So we had to pick something else. I'm saying hype. You're saying Doge, Doge at 42 cent and a $61 billion dollar valuation. I'm at hype, $23, $53, so a $23, $50 billion dollars um valuation. Our stock, I'm saying QBTS, that's D-Wave at a at a $1.56 billion dollars market cap. You're saying Sentinel-1, which is just S, at a $7.2 billion market cap. Contrary intake, Stama faces Trudeau's fate in 2025. I'm saying net new zero conflicts in war. And then the bonus is going to be that the Brazilian royale goes one to 10 to the dollar. And I say XRP will briefly flip Ethereum. All right.
01:02:37
Speaker
We'll call it that, that's been a bit of a marathon.
Disclaimer: Not Investment Advice
01:02:39
Speaker
This has been another good one. um We'll check in at the end of the year and we'll just maybe maybe midway through the year, we'll do a little recap and see how we're doing. It's been a pleasure, Austin. ah let's see ah Let's see if we blow past our BTC targets already by yeah by next week. I'd be pretty happy. I would love it. All right, I'll see you then. See you, Matt.
01:03:19
Speaker
The contents of the Decrypting Crypto podcast should not be used and are not intended as investment advice. Please do your own due diligence before making any investment, cryptocurrency or otherwise.