The Monday after the DeepSeek news broke, I started selling off my big tech holdings. My only regret? Not selling everything that day. I see DeepSeek as a Bear Stearns moment — a major red flag, much like 2008, signaling trouble in paradise. “DeepSeek’s energy Consumption is shaking up the AI industry, raising questions about the massive investments Western companies are making in energy-intensive infrastructure, such as the U.S.-backed $500 billion Stargate project.” – www.rinnovabili.net, January 29, 2025. DeepSeek shattered the thesis of my blog post, AI & BTC: The Locust and Dung Beetle
The race to zero in AI computing costs and profit margins has begun. Having spent three decades in cutting-edge computing startups, I’ve seen this before. I feel like Jeremy Irons in Margin Call, pounding the desk, exclaiming, “This is it! I’m telling you, this is it!”
AI will transform everything — traditional white-collar jobs, even programming. But it’s the Wild West out there, and no one knows who’ll come out on top. Personally, I feel more empowered in an AI-driven world. Those of us with high EQ, even if we’re not strong in math or science, can finally level the playing field. While AI will outstrip us in knowledge, empathy remains a valuable skill — for now.
You might expect me to comment on the tariffs, but that’s above my pay grade. I will say this: pre-2020, I worked in edge computing for robotics and smart factories. Building a factory takes time, and operational technology (OT) is a grind compared to informational technology (IT). IT made many in Silicon Valley rich beyond their wildest dreams, providing a comfortable lifestyle. But the easy money days of big IT are behind us. A reordering is underway — business models like cloud computing and SaaS are about to become fiercely competitive.
The disruption from tariffs isn’t over, but we might see a brief calm in the coming months — I hope so, because we could all use a break. Still, as Lyn Alden often says on X (LynAldenContact), “Nothing stops this train.” Things are changing forever. How long the unwinding and reordering take is anyone’s guess. There will be winners, losers, and some who fade away like a ’60s folk singer.
This brings me to the core of this post: follow the energy. Last week, as the stock market crashed, Bitcoin’s hashrate — the computing power and energy dedicated to mining — hit an all-time high. Source: https://x.com/documentingbtc/status/1909788396328788340?s=12&t=fkRmFD2VxAY11KmInSo50A
Think about it: as markets plummeted, energy flowed to a superior digital currency — a proven store of value over a 4–5 year horizon. Just last night, between drafts of this post, we hit another all-time high. That tells you everything. Fiat currency trends to zero against Bitcoin, so following the money is pointless. Bitcoin was built for times like these. Even BlackRock figured it out, launching their Bitcoin ETF (IBIT) — if you can’t beat them, join them.
As we stare at our brokerage accounts in shock, focus on one thing: where is the energy going? That’s where the money will follow. Take the time to buy Bitcoin, learn about it, and be patient and humble. Arrogance will destroy us. AI may some day outsmart us all, but right now, Bitcoin is attracting more energy than AI.
Editing and Images Thanks to Grok AI
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