Alexander Gerczyk: \"I haven\'t seen any fundamentally negative signals in the stock market, but

Interview today: Conversation with well-known trader Alexander Gerczyk

Today we interviewed Alexander Gerczyk, one of the most famous traders in the Russian-speaking region. He started as a taxi driver in New York and eventually became a multimillionaire. He was also the first trader of publicly sharing trading strategies in the Russian-speaking market, and his interview videos have been viewed millions of times. Today, Gerczyk publishes his trading records and runs a channel for traders. We discussed in depth the current state of the U.S. stock market, possible corrections, the role of pensions and hedge funds, the outlook for U.S. interest rates, and the impact of Trump\'s policies. In addition, we focused on the crypto market: where Bitcoin is heading, why Gerczyk is concerned about Microstrategy\'s strategy, whether Michael Siler can survive the market downturn, and which Bitcoin trend he believes is more likely to emerge.

--Hello, Alexander! Let\'s get straight to the point: The S & P 500 is currently at historic highs, but many say Americans \'purchasing power has dropped significantly. Is this a bubble? Should a sharp correction be expected?

The main fund currently entering the market is pensions. Americans have huge retirement savings. In the United States, people are taught from an early age that money in the bank is used for daily expenses, and the main part of the money should be invested in retirement savings. Even a doctor making $20,000 a month may only receive $3,000 to $3,500 a month after retirement. If a person is accustomed to living on $250,000 a year, he will face difficulties after retirement. So people need to save. But inflation doesn\'t just mean \"sausage becomes more expensive\"; it\'s an increase in the overall cost of living.

Let me give you an example. My sister lives in Miami, and she and her brother-in-law are both nurses. Their family has an annual income of about US$190,000 and belongs to the upper and middle class. They bought a $425,000 house at an ultra-low interest rate of about 2.25%. But property taxes increased from $3,000 a year to $10,000. The owners \'association fee has increased from $280 per month to $1,000. Groceries used to be $2,000 a month, but now cost $3,000. The annual wage growth rate is only 3%. These expenses are everywhere.

Meanwhile, 80% of Americans do not have $5,000 in their bank accounts. But as a country, they have become richer because retirement savings have grown significantly. Some people used to have between 100 and 120,000 dollars, but now they have 700,000 dollars. The problem is that you can\'t withdraw your pension at will-there will be a fine if you withdraw early.

In the past, people would invest conservatively in pensions: buying funds and pursuing annualized returns of 10%-12%. No one will speculate with their pension. But now, people call their agents and say,\"Brother, why am I only making 10%? Look what\'s happening in the market!\" As a result, large amounts of money poured into the market from pension accounts.

In addition, since 2010, the market has rallied sharply as companies buy back shares. Companies create huge amounts of cash and go directly to buy back their shares when markets fall.

-But artificial intelligence companies seem to have been overvalued. Micron Technology and Sandisk have begun to fall. Where else can the market find new impetus?

Hedge funds currently hold record long positions. This is public information. They have a lot of money, and there is still a lot of money flowing in. They are still buying.

As for companies such as Micron and SanDisk-they have already gone up a lot. If a target rises by 1000%, someone will take profits. This is normal and does not mean that the market will collapse immediately. In addition, a large amount of money poured into the U.S. market from overseas. European and South Korean markets are also at high levels. This is all part of a larger prosperity.

Regarding artificial intelligence, I would like to say: I have been engaged in artificial intelligence development for about nine years. What people call artificial intelligence nowadays is not artificial intelligence in the complete sense. It is a new generation of neural networks. It\'s very powerful and can quickly process data, translate, build patterns-but it\'s still processing the information that\'s input to it. For example, ChatGPT made huge progress within a year because it was \"fed\" with a lot of data. But it is still a database and data processing system. Even AI music is becoming popular now, and it can really sound good. But it still requires vocals, specific tones and structure. If you listen to several songs by an AI artist in a row, they will sound very similar.

The same is true for blockchain. Technology itself is not new and originated in the 1980s. There was just not enough computing power to handle it. Now that computing power is available, this technology becomes available.

-Will the market reverse soon? Many people already want to short Nvidia, Micron and SK Hynix. Michael Bury is also short.

I have been hearing the saying \"everything is coming to an end\" for fifteen years. In theory, of course, it will fall one day. But you have to understand people\'s psychology. If you have $100,000, it becomes $400,000, and then it drops to $320,000, and many people will say,\"It\'s okay, I can make it.\" I have friends with millions of dollars in the stock market. One person said: \"I started from $300,000 and now I have three million. If it drops to 2.4 million, I will carry it.\" People are not afraid of that situation.

Yes, some companies have ridiculously high valuations. OpenAI spent $100 billion trying to make $5 billion. SpaceX\'s valuation is absolutely unreasonable. Of course, there will be some kind of pullback. But I don\'t think it will happen now. I think if the decline starts, it will not be triggered by a general factor, but will start with an individual case. There must be a problem with one stock first. Because in the field of technology, there are currently no obvious signs of slowing growth.

The first signal is purchasing power. People change cars and TVs less frequently and postpone purchases. The second signal is the words at the next interest rate meeting.

--What are your expectations for interest rates? Many people think Kevin Walsh will \"follow Trump\'s tune.\"

I don\'t think they will cut interest rates significantly. But I also don\'t think they will be allowed to raise interest rates. They might explain it in terms of affordable housing. If interest rates continue to rise, people will not be able to afford a house at all. Mortgage interest rates are already around 6.25% to 7%. Add another 1% to reach 8%. I bought my first home in 2001 at a mortgage interest rate of 8%, which was a high number.

Another potential driver is the real estate market. The government wants to make affordable housing available to low-income people and people who previously could not afford it. They also want to restrict hedge funds and large companies that buy thousands of homes. If ordinary people could buy cheaper houses, they would have extra money to spend or invest.

--What about cryptocurrency? Now everyone is buying for the company\'s balance sheet: Bitcoin, Ethereum, Solana. But the market is falling.

This is exactly what I don\'t like. Cryptocurrencies are everywhere: someone is buying for company balance sheets, someone is buying, Ethereum is being bought, Solana is being bought-but the market is falling. I tried to understand: Are big players selling out of disappointment, or is it because the cost of holding a position is too high? According to the latest data I have seen, more than 70% of people who trade or hold cryptocurrencies are using leverage.

I talked about microstrategies a few months ago. When Bitcoin started to fall, I shorted from $85,000 and explained to people: The company had no operating profit, but it would have expenses. I was severely criticized at the time. But when Microstrategy sells even 32 bitcoins, the problem is not the size of the sale. For them, 32 bitcoins are just a drop in the bucket. The key: A company that once shouted \"Sell your kidneys, buy Bitcoin\" from morning to night is now selling Bitcoin itself.

They may buy it back after falling, but the problem remains. Microstrategy will never step up and say,\"Guys, we are disappointed in our strategy.\" But people don\'t understand the main point: it\'s a public company. That\'s not Michael Siler\'s personal funds. If I buy Bitcoin with my own money, I can withstand a 90% drop. I firmly believe-I can wait. But a listed company has shareholders, bonds, debt, expenses, wages and insurance. Who would let them sit there calmly and watch Bitcoin fall to $8,000? Technically, you can say anything, but the market may force you to sell.

The biggest mistake cryptocurrency people make is falling in love with this investment tool. You cannot privatize the market. Bitcoin can be an idea, a principle, a currency revolution-I understand. Yes, with mnemonics, you can cross borders, preserve capital, and feel freedom. But in real life, you still can\'t buy anything everywhere with cryptocurrency. At some point, you will have to exchange USDT or BTC for regular currencies, looking for an exchange, bank or middleman. It\'s still not universal and it\'s not that simple.

-For many people, Bitcoin is no longer just a tool, but an idea: freedom, capital protection, a way to survive crises. Fundamentally speaking, nothing has changed, has it?

I agree with this: Cryptocurrency gives people a sense of freedom in many ways, which is why it has become so popular. But now I don\'t understand what will make Bitcoin rise, who will push it, and why. In my opinion, the first positive signal from the market can only be clear regulation, such as the Clarification Act. Until then, I couldn\'t see a strong trigger.

The biggest problem will be that microstrategies start to encounter serious difficulties. This company has received much attention, and if the story starts to fall apart, at worst, people lose trust. This is the most dangerous thing for the market.

-If you had to choose between two scenarios: Bitcoin fell to $40,000 first, or would you return to $85,000 to $90,000 first-which do you think is more likely?

I think Bitcoin will fall to $40,000 sooner. I believe microstrategies may be the factor that causes broader problems for the market.