Why The Midterm Results Are Secretly BULLISH For Crypto

The Democrats just absolutely swept the midterm elections as we expected them to on this channel because we've been reviewing the data and the prediction markets for the last several weeks. And a lot of people think that this is inherently very bearish for crypto. But today, I'm going to explain to you why I think that they're wrong. And actually, this is going to open up an opportunity for crypto to once again shine. And then I'm going to be telling you the coins that I think benefit the most from this. So, we're going to take you through everything you need to know from the most important things that happened politically yesterday. Obviously, we're actually recording this the night of the price action on key assets that reveal a lot more about what's happening in the markets and what I think is about to happen to crypto in light of one of the most decisive and borderline offthecharts swing back midterm elections in the history of this country. First and foremost, no ambiguity here. We have 100% Senate control and 100% House control. Of course, some of the votes are still being counted, but the way this stuff works is between ALOS, exit polls, and of course, these prediction markets were able to get the final results hours before the actual press usually declare a fullale victory. So, another reason why these betting markets are so useful. I know a lot of people had accused me of being partisan, specifically partisan for the Democrats. if you've been following my channel is kind of the opposite of what I've been in support of the crypto industry over the last few years. But I was just following the data. I was just saying, "Hey guys, this is what's obviously happening. People are very unhappy about the war. People are very unhappy about inflation. People are very unhappy about the volatility." and they expressed it here at the ballot box and with the official declarations from Decision Desk HQ that Democrats will win the Senate as well as the House that we knew they were going to win the House, but they have actually clinched the Senate as well. We now know that the legislative branch is firmly in the control of the Democrats, but there were some actual surprise victories here. Some really important victories leading to even more fear and panic tonight than I think some were expecting. Check this out. First off, we have a big victory for James Talerico, the first Democratically elected senator in Texas in over 30 years, longer than my wife has been alive. We even had a US Senate race in South Carolina, which was all but considered locked up for the Republicans, swinging back, the first Democrat in the state to win in decades. We have Sherid Brown who wins a comeback bid to the US Senate from Ohio defeating John Hustid. But I would say the most important race in the entire country tonight has been the gubanatorial race in Texas. That's because Gina Hino Josepha, I hope I pronounced that right, wins election for governor of Texas. And one thing I want to point out here is that Texas is absolutely critical to the modern economy for many reasons. But one absolutely critical reason is that they are the hub of new data center buildouts in America, playing home to upwards of 27% or more of all new data center construction in the United States. Essentially, this is the future of where America plans to build its data centers. And guess what? Miss Gina's policy is that we need an immediate moratorium on data centers to last until the legislature can meet to put in real protections. So, we can expect for all data center buildout in the most important critical state in America for data center buildouts to be put on pause. And more importantly, it wouldn't surprise me to see there be pushes for a federal legislation to at least pause data center buildout nationally. This is, in my opinion, a crushing blow to the GPU industrial AI complex. I mean, the entire modern S&P 500 economy is built on a few massive AI companies scaling, hyperscaling as they're called, to build out the most astronomical amount of compute to create the future of artificial super intelligence that's supposed to bring about an era of abundance. It's supposed to solve our economic and health issues as well as elevate our society to a tier 2 intergalactic sci-fi society. It's all well and good, but if you can't build out the data centers, then guess what? All that spending starts to slow down. And when the spending starts to slow down, well, you got yourself a problem. And so, my friends, we could be looking at a major problem, a major roadblock hitting the AI industry that could take months or maybe years to actually unblock and return to its former glory, if ever. Because as the night went on, we started to find out that actually the American populace has started to vote in pockets against AI data centers at the local level, not just electing politicians like Gina. this thread by JD Capaludo who is a tech reporter and the newsroom AI lead at Semaphore. He's actually an expert in this stuff. He goes through all the data center related ballot measures across all sorts of local municipalities across the United States. And long story short, it's not looking good. And this was several hours ago, but in over 40 local municipalities across 13 states, these bands went through with thunderous support across Trenton Urbana Edgewater Florida Hubard Padaska PIA Defiance Emporia all sorts of places from Kansas to Ohio to Florida. Not exactly liberal powerhouses here. In fact, pretty much red states, if not purple states at best. These places are voting against new data centers and they are rejecting this AI buildout. In Bloomington, Illinois, a 78.8% 8% backed advisory call for a moratorum on large data centers. That is a landslide. People do not like these data centers. And voters are also demanding direct control over development. With Grove City, Ohio, 55% backed requiring voter approval for projects meeting specific acreage, electricity, and water use thresholds. We also have Jainsville, Wisconsin. 61.6% required voter approval for projects exceeding $450 million. And well, you get it. We have had one of the most massive swingbacks in the history of American politics and squarely in the sights of the voters is eye against the rise of AI, the uncertainty it provides and the thing that powers it, the data center. And it should surprise you not that stocks are reacting very negatively to this because of course AI is holding up the entire stock market right now. And so any setback in this buildout is going to be a setback in the amount of GPUs that Nvidia can sell. And the amount of compute that can power the next biggest best model from OpenAI from Anthropic is going to set back the revenue targets from SpaceX. You know SpaceX, that multi-t trillion dollar IPO that everyone and their mother is now holding in their stock portfolio. It's not like the old dogs being taken around back and put to bed. But I'll tell you what, it feels like the whole thing has been shot in the knees. Which brings us to the question, what happens next? Is this going to cause a massive collapse in equity valuations? Is this going to take one of the greatest stock market performance runs in history and set it back to the nether realms? Well, I don't want to get too dramatic because AI is very real. It is creating a ton of revenue and it is still growing rapidly even if this becomes a massive headwind. The reality is that it's not the time to be making absurd, overly bold claims about the collapse of the AI industrial complex. But you should understand what happened tonight is that AI is dealing with extreme levels of push back from the gubernatorial race that is going to impede development in Texas, which is the hub of AI data center development to the general understanding that people across the country do not want these data centers in their state and are willing to vote against it forcefully. But I want to be clear, I don't think that this is inherently bearish for markets. If anything, I believe that when the dust settles, it will actually be seen as very bullish. And that's because with Trump, with both the House of Representatives and the Senate under him, there was no check on his power. Whether it was wildly fluctuating tariffs from day to day or a war in Iran, all kinds of volatility was being introduced. Uncertainty was being introduced into the market almost every single day. I mean, you and I have felt it almost every single day. It's been exhausting. And this is from someone who was beyond thrilled, beyond excited to have a crypto friendly president. Finally, at long last, we could breathe easy. The regulator was not coming for us. But what did come for us was a tremendous sense of uncertainty, a lack of predictability, and having gridlock between the House of Representatives, Senate, and the executive branch introduces the likelihood that we probably won't see much get done for the next 2 years, which despite what it may seem is actually what markets like best, predictability. I got to say, Mr. Magoo over here has got it right. Everyone is max dooming right now. So, let it be known that this is the most bullish outcome for stock over the next 6 to 10 months. And obviously, we did a massive stream yesterday where we talked all about this, how we expected for there to be a performative sell-off, a fake selloff, that was a buying opportunity. And as soon as we started to see that the Senate and the House were both going to go blue, we saw this particular move down. And it barely lasted. Like, it's only been a few minutes. And this thing is already on low time frames and making higher highs. you can see is taking out his 15-minute highs. It's not doing this orderly sell-off thing that keeps going down. It's actually reversing course. To me, this has quite a bit of strength in the Bitcoin chart. In a lot of my trading groups, people are talking about going long, how they feel like the bottom's in. Again, this is not even a really bad sell-off. In fact, I was fully prepared to see this sell off and potentially come down, get below the 75K support, and potentially come in and land in this green box before going higher. It's totally still possible that it does that too. Again, a few minutes of pump here doesn't mean anything if the mainstream markets start panic selling off. That could still happen, but I honestly think that crypto is starting to look quite attractive here. Legendary trader Bob Lucas says this is great for crypto at least, not sarcasm. And I think a lot of people are missing this. One of the most bearish things for crypto was that there was this new industry where it was way easier to deploy money and get rich. Crypto was no longer the hot new place to actually invest. But anything AI was going up and to the right with no headwinds. This presents a problem for capital allocators that no longer see crypto as the cool way, the asymmetric way to make gains. I mean, just look at the Bitcoin price in blue overlaid over the Micron chart. You know, Micron essentially one of the darlings of the AI buildout. You could see that it pretty much topped right as crypto bottomed here. It's almost exactly the same trade. As AI started to sell off, crypto started to get bought up. And ever since it's lost its luster, a lot more money has flowed into crypto. I'm not saying it's the only reason why crypto has bottomed and gone up, but hey, there is some evidence here that the AI trade settling down has led to more money and capital rotating back into crypto. So, if AI starts to become targeted by the Democratic lawmakers, that opens up a lane for more capital to flow out of AI names and into crypto names. It's a simple game of where does the money go. Now, before I show you the coins that I think are going to benefit most from this, I want to remind you that this is the last week to enter the $3,000 Koshi giveaway, where the grand prize winner is going to win $1,500 or the new iPhone 18 Pro. All you have to do is deposit and trade $25 using the link below. They're soon going to be adding the biggest stocks in the world from Nvidia to Google and more. You can bet up or down with leverage right from the Koshi app. Thanks again to Koshi for sponsoring this episode. Now, let's talk about which coins I'm betting on for the next leg of this market. In my opinion, one of the prime beneficiaries is Zcash. Now, Zcash, as you know, is effectively private Bitcoin. And in a world where AI is hacking everything and doxing everyone's personal information, most likely going to start connecting people's personal wallets and addresses and really wreck havoc on people's personal privacy. The idea of private encrypted money starts to become really quite cool, I think, to a lot of people. And on top of that, there's also the fear of quantum computing, which Zcash has a path right now to becoming quantum resistant. Of course, with the rise of the Democratic party, we know that one of the policies that is gaining a ton of traction within that party is wealth taxes, wealth seizures. And of course, we've hypothesized for quite some time that private money will become popular more and more so over the coming months and years. So, look, I'm not going to kid you, this doesn't look like the greatest chart. This could be seen as kind of a bare flag and we could leg down a bit more. But I do think that buying Zcash in this zone above the prior all-time high is probably a good bet if we come down here and land below this gray line, but above this red line. Now, I wouldn't want to see it go below this red line because that's the prior all-time high that took 10 years to break. So, to me, this is a no-go zone. I do not want to see us go under here, but I'm totally fine with buying here around $1,000 and slightly under. And I think that that could make a long-term buy. Now, if you look here, this is when we found out the news about the Democratic sweep. We got a slight little dip here and now Zcash is about to make a market structure break over there on of course on a low time frame. It looks pretty strong to me and I think this is the market trying to tell you that the market is not scared about a democratic sweep here. Not in Zcash land. Barely so. You can see barely so in Bitcoin land. We're almost going to get above this level right here, this $78,000 level. And then you could argue that Bitcoin has shaken this off more or less. And finally, Hyperlid, as we know, which has just gotten regulatory approval to work with the New York Stock Exchange. Well, they have a friendly regulator in the CFTC and the SEC for 2 years. So although this isn't going live tomorrow, they have some time to embed themselves in a way that I think is going to be hard to unseat, very weird to unseat. Even if the Democrats win out and win in 2028 and replace those regulators, it feels as though Hyperlid will be pretty well embedded in the financial system and kind of hard to take out. So I think Hyperlid is looking like a decent buy here. Though it did get a more meaningful sell-off here as a result of the news because it's so related to regulation. I still think that buys around this $82 level and below are probably going to age well. And certainly as long as we hold above this $75 level, I think things look pretty good in hyperlquid land. And finally, as we talked about many times, I think that pump fun is still undervalued. It makes almost as much money as hype and is worth 125th of the token valuation. And so at a certain point, if crypto does go crazy again, it is likely that their revenues will expand. and we've seen them fend off every single competitor for this memecoin launchpad space. I would not be surprised if this one prints some real gains once crypto does get its legs under it. And I will be making a longer video on this, but I just want to point out this is the crypto market cap excluding the top 10. This is the others chart. This is all of the smallest altcoins in the entire industry. And if you take a triangle and you draw it from the actual closing prices of the monthly candles, you can actually draw a little bit of a sloppy but a meaningful triangle here that I think represents a more than half decade consolidation of these smaller altcoins. And I'm of the belief that maybe not tomorrow, maybe not next month, but at some point this cycle, we will see the others chart break free of this triangular consolidation and break upward. And if that happens, that could be cause for a generational run in the alts. This is non- urgent at all. But I'll tell you what it does remind me of a little bit is the Bitcoin consolidation after the 2018 bare market, which we all know how that ended. So my message is that I think Bitcoin and crypto actually emerge from this in a better light than a lot of people are actually estimating right now. There could very well be a panic sell-off over the next few days and weeks in mainstream markets, and that could lead to lower prices short-term for Bitcoin and crypto, but I'd be dubious that we're going to see new lows or a cataclysmic breakdown. That is, as long as we stay above $67,000 on BTC. I'd see these as probably long-term buying opportunities. While AI gets dealt the biggest setback that it's had in years, and crypto, in my opinion, has less volatility. and the market knowing that there's no new laws that will most likely be passed and at least the certainty that nothing's going to change is good for markets. If you enjoyed this, you know what to do. 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