Original Video Title: Why Buying a House Is the Worst Investment You Can Make - Bitwise Advisor - Jeff Park | E167

Original Video Source: When Shift Happens

Original Translation: Deep Tide TechFlow

Key Points Summary

Jeff Park is a seasoned macro strategist and also an advisor at Bitwise. He firmly believes that the current financial system has lost meaning for young people, especially against the backdrop of high housing costs and AI potentially replacing an entire generation of jobs.

He points out that real estate is actually a depreciating asset, while Bitcoin is the ultimate financial safe haven. Furthermore, he predicts that the rapid advancement of AI will trigger the largest global wave of Bitcoin adoption.

He proposes that "Occupy AI" will be a key turning point for the Z and Alpha generations. At this moment, these two generations will have a "light bulb" moment similar to the Millennials during the financial crisis, discovering the potential of Bitcoin. Through this process, they will gain a deeper understanding of the essence of digital assets and investments.

Additionally, Jeff is very optimistic about the potential of real estate tokenization. He believes that tokenization has the power to fundamentally reshape the existing financial system and provide ordinary people with a more equitable investment opportunity.

This content explores how these key moments will impact our understanding of digital assets and investments, as well as the profound implications for the future.

Insightful Point Highlights

The Truth About Real Estate and Wealth

· "The reason for rising house prices is not that the house itself has become more valuable, but that the dollar has been continuously depreciating. A house is a depreciating asset, as clearly stated in the tax code, where you can depreciate over 20 to 30 years—so we've known for a long time that houses are depreciating assets."

· "In the past decade, the average house price in Manhattan has actually not increased; it has remained flat. What has truly increased is the top-tier luxury homes used as wealth storage tools—they are essentially uninhabited, merely a line item on the balance sheet of the rich."

·「The average age of those applying for a mortgage in the US this year is 59. They are not buying their first home — they are buying their third or fourth. And these people are competing with that 25-year-old looking to buy their first home.」

·「In New York, renting is the economically correct answer. When you own a home, you have to pay taxes, management fees, maintenance costs, mortgage insurance, and property insurance, resulting in a net yield of less than 2%. When luck is not on your side, it can even be less than 1%. You'd be better off putting that money into a money market fund directly.」

·「There is now a better way to store wealth, a wealth that requires no maintenance, takes up no physical space, is not taxed annually, and you don't have to worry about having your property confiscated after being listed by the government — that is Bitcoin.」

On AI and 'Occupy AI'

·「We have never seen a disruptive technology like AI before, which has the potential to completely replace labor while enabling companies to achieve record profits. Amazon laid off 30,000 people, and the stock market reached an all-time high — this is the most straightforward illustration of the 'collapse of free will prices'.」

·「AI is depriving humans of their ability to make autonomous decisions. Every technological revolution in history — electricity, airplanes, mail — has amplified human capabilities, while AI could directly make 'work itself' disappear for humans.」

·「The essence of AI is to ultimately centralize all your data, harvest it, and then use it to replace you. If my data is making the model smarter, I need some form of compensation — and this compensation mechanism, theoretically, can only be achieved through cryptocurrency.」

·「Every generation needs an awakening moment to discover Bitcoin. The Millennials' awakening was the financial crisis, and the Z Generation and Alpha Generation's awakening will be Occupy AI — they will find Bitcoin from the firsthand pain of competing with AI in work.」

·「AI and Bitcoin share a common logical core: energy consumption. If you do not acknowledge the negative externalities brought by AI, then the other side of the scarce asset obtained with the same energy is Bitcoin. You can vote for Bitcoin with your choice.」

On Investment Framework and Logic

·「The cornerstone assumption of value investing — pricing everything at the risk-free rate — is crumbling as the credit quality of the US itself is being challenged. Once you remove this assumption, you will see the world more clearly: what truly drives value is ideology, not cheapness.」

·"Your mom actually knows more about investing than you think. She understands that the most valuable things are sometimes found in the physical world—a Hermes handbag, which has outperformed the S&P 500 over the past 20 years."

·"Diversification is not dead; you just need to broaden your horizons and find assets that are truly uncorrelated with the global liquidity cycle—such as gold, art, fine wine... The logic of these assets has nothing to do with whether the S&P is at 6800 or 6200."

·"The tokenization I'm truly interested in is not the tokenization of BlackRock's money market fund, but of those long-tail assets—top-tier wines, yachts—that allow ordinary people to own a share for $100. That's where the real opportunity of tokenization lies."

·"Instead of thinking about how much upside owning Bitcoin can bring, consider this—what downside risk are you exposed to without Bitcoin? Not having Bitcoin is essentially being short Bitcoin."

·"If I were only allowed to pick two assets, Bitcoin would have to be one of them—it's the most uncorrelated, orthogonal asset to everything else in the global capital markets. The other one would be a USD-denominated, income-producing asset."

On Society and the Future

·"When you realize that everyone upstairs, downstairs, and across the street is all under the same patriotic spell, unable to control their own destiny—it's a very strange feeling."

·"I don't tell kids 'practice makes perfect,' I tell them practice is not for perfection, practice is for progress. Nothing is perfect—neither is Bitcoin, but it's progressing. Everything we do is about moving in that ideal direction."

Jeff's Early Encounter with Currency Devaluation

Host Kevin: You mentioned earlier that you had an early experience with currency devaluation in your childhood. Can you tell us about it?

Jeff Park: I grew up between the United States and South Korea, spending part of my elementary school years in Korea. I experienced the 1997 Asian financial crisis in Korea, which shocked the world and left a deep impression on me. At that time, I was just a second or third-grade kid, but you could feel the entire country in a strange collective state—everyone, upstairs, downstairs, neighbors across the street, all united by a sense of patriotism, facing a fate they couldn't control.

It's a peculiar feeling: when you realize the devaluation of a country's sovereign currency can unite everyone to such an extent. For most Americans, the closest analogy is probably 9/11—the national trauma that brought everyone together, thinking about what America is and represents. Currency devaluation can also generate a similar cohesion.

The experience in 1997 had a huge impact on me, but it also showed me the strength of a nation—when the people are mobilized to face a sovereign crisis in a principled manner, defending the interests of the people. There is one thing I remember vividly: the South Korean government at that time requested all citizens to donate their gold to enrich the treasury, helping to repay the IMF's bailout loans.

In the United States, the IMF may sound like a neutral institution, but in many emerging markets, the IMF is a highly politicized term, suspected, scorned, and even seen as a politically motivated entity. I witnessed this side early on, and sometimes I think that these experiences may have been a precursor in some ways to my path into cryptocurrency two decades later.

Who is Jeff Park?

Host Kevin: So who are you?

Jeff Park: I am Jeff Park, but I believe I, in a sense, represent the convergence of many forces. On the one hand, I am a Korean-American raised in the United States, with an Eastern mindset, so I can act as a bridge between Eastern and Western narratives—whether it is the prosperity brought by globalization or the social tensions it has caused. On the other hand, from a generational perspective, I entered the workforce in 2008—my first job after graduation was at Morgan Stanley, right on the front lines of the global financial crisis.

But this also quickly made you realize—there is nothing truly invincible in this world, and many things taught in school are not as solid as you were led to believe. It is humbling, but you can also turn it into a driving force to establish your own way of thinking.

This experience also made me a microcosm of a generation—one that entered society during a financial crisis, the millennial generation, thus harboring deep distrust of institutions and intermediaries, and in all aspects of social networks, careers, and life, eagerly seeking unhosted, autonomous solutions.

How American Diversity Is Both an Advantage and a Weakness

Host Kevin: You witnessed currency devaluation during your childhood, and saw the illusion of the financial system shatter when you joined in 2008. Now here we are in New York, the world's financial center, where prices are skyrocketing.

I come from Switzerland, live in Singapore, both of which are not cheap, but coming here feels outrageous. I just can't understand how the average person can survive. All of this is related to that thing you experienced in your childhood, only now it's more urgent. What are we looking at? What should we do?

Jeff Park: America's greatest strength is also its greatest weakness—it's the diversity of the population, and how this diversity permeates the entire population structure and social fabric. You often hear Asian commentators predicting the decline of the American empire, and they usually latch onto a core point: diversity will kill this country.

I heard this a lot when I was young. This has always been subtly present in the geopolitical relations between Korea and China, Korea and the US, and now these trends have fully emerged in domestic political movements in the US. The crux of the matter is: when the population structure is so diverse, it's hard to form a true national cohesion.

In Korea, it's much simpler. We are all Koreans, sharing a common historical foundation, having experienced colonial oppression. These common hardships have given us a cohesive vector. Whereas in the US, the history is so rich and complex, it's hard to find that obvious nexus that would make everyone feel "we have all sacrificed together." Korea has mandatory military service, all males regardless of class or education must serve—it has played a huge role in creating a sense of social homogeneity, as in Israel too.

But in the US, you ask: What is that American experience that everyone shares? This question is hard to answer.

US politics usually draw the dividing line between left and right, between classes, between the old and the young, but I think these dimensions are distractions, escapisms. The real core is—the lack of national cohesion among the younger generation, which is the most valuable and the hardest thing to establish.

What we are seeing today from the shattered financial system

Host Kevin: What's wrong with the current financial system?

Jeff Park: We are witnessing various manifestations of a completely out-of-control, thoroughly collapsing financial system. People use "K-shaped economy" to explain what's happening on a societal level.

The K-shaped economy refers to a situation where one segment of the population experiences significant economic prosperity due to asset inflation, while another segment is in a downward trajectory, facing a recession. They are unemployed and cannot find jobs. The gap between the two is widening continuously—hence the meaning of K-shaped: one line goes up, and one line goes down.

How the "K-Shaped System" Manifests in the Real Estate Market

Jeff Park: You can see it in New York through the real estate asset class. You might be surprised to know that the average price of real estate in New York City has actually remained flat over the past 10 years. Many narratives might lead people to believe that New York real estate has experienced incredible prosperity, especially with reports of stunning skyscrapers, and capital flowing in from China and Russia for residential development. But that is not entirely accurate.

What we see in real estate is also a K-shaped economy, where ultra-luxury units sought after as a store of value perform well. They are not really lived in but are assets; people buy them to preserve wealth on their balance sheets, and this segment performs well.

If you have a $20 million penthouse that you bought 7 years ago, you could now exchange it for a $30 million penthouse, and you would make money.

But if you bought a regular home, a place where you actually intend to live, raise a family, and contribute to the city's productive economy, and the price is closer to the so-called "affordable" range, those properties may actually decline or remain flat.

There is something called a luxury tax in Manhattan, where this tax is imposed if the apartment sale price exceeds $1 million, but today in New York, $1 million might only get you a studio. This tax was established around three to four decades ago when a $1 million apartment might have indeed meant some luxury.

Because it is not indexed to inflation, the government certainly would not proactively adjust something that could broaden the tax base based on inflation. So now, almost all apartment transactions in the secondary market are subject to this luxury tax.

The housing that contributes more to the city's economic life, on the other hand, sees price declines or stagnation. New York City itself is a paradox. It is a city where two different life stories unfold in the same place. If you come here from Singapore or Switzerland, you may see that everyone's experience could be vastly different. All of this, in my view, is a symptom of asset scarcity.

The issue with real estate is not new. When many people talk about the decline of capitalism, they often point to real estate as a source of contradiction because land is inherently scarce. Land is scarce, and thus the communities formed around physical space are also scarce. The reason Manhattan real estate is expensive is that people want to work in developed commercial areas, in places where people are close to each other.

When you layer these societal components on top of each other, the value of land increases above its historical norms due to this intersection of societal power. Human civilization has seen this happen time and time again: whenever a locus of activity is unleashed on a place, the land prospers.

The issue with the United States is that we have the enormous privilege of running the global financial system. We often say the dollar is America's biggest export, and that is true, but it comes at a cost. The cost is that offshore capital must ultimately flow back and invest in U.S. assets.

This is the corresponding nature between the trade deficit and the capital account surplus. If the U.S. wants to maintain a trade deficit, by definition, we need a continual inflow of offshore capital into U.S. assets. This is how the dollar operates.

Essentially, you are creating an artificial market for U.S. assets. Offshore investors need a place to park their balance, creating a very distorted environment. It is not priced around the cost structure of us as residents, nor our living here and contributing to the economy through productivity.

It is not priced based on our cost structures as residents; it is priced based on U.S. assets as a sovereign store of value. When you have different motivations in a real estate market, pricing problems inevitably arise.

How Should New Real Estate Investors Think

Host Kevin: For someone in their 30s or 35s, who has some savings and is looking to make a reasonable investment, they may barely afford the down payment on a studio apartment in New York, but you're saying even a studio apartment is now $1 million— theoretically, $1 million should be scarce and luxurious, but you're saying no, you need to buy a $20 million penthouse.

Does the path our parents' generation talked about, 'go buy a suite, go buy real estate,' still apply to our generation?

Jeff Park: Real estate is a great example of what we should really rethink, not that house prices are rising, but that the value of the dollar is decreasing. Essentially, a house requires maintenance; it is a capital expenditure— things go wrong, need repairs, there are mortgage taxes, property taxes, and various maintenance expenses.

After buying a house, there is a continuous need for significant capital inputs. The house does not turn into gold over time; instead, it continuously depreciates, requiring ongoing repairs. Therefore, fundamentally, a house is a depreciating asset.

In fact, the U.S. tax law clearly states that houses will depreciate over a fairly long period of time, allowing real estate investors to claim depreciation deductions over 20 to 30 years. So we have long known that real estate is a depreciating asset.

Then why is its price still rising? First, it's because the U.S. dollar is continuously depreciating. Second, people see real estate as a primary savings method, as it anchors you in economic productivity—For example, if you want to send your child to a good school, and public schools are usually district-based, you need to pay a large amount of property tax to qualify for enrollment.

So homeownership is tied to many social functions that continue to drive housing prices up along with inflation.

The issue arises from two dimensions: one is demographic structure, and the other is liquidity transformation itself. Looking at the U.S. market, the average age of Americans applying for a mortgage this year is 59—this number should be alarming. A 59-year-old is probably not buying their first home but rather buying their second, third, or fourth property. And these individuals are directly competing with that 25-year-old looking to buy their first home in life.

The problem we face in the housing sector is a very specific intergenerational problem: the role of real estate as a wealth storage tool clashes completely with the social need for families to truly settle and raise the next generation. Many young people's life journeys are trapped because buying a house is simply out of reach.

There is also a dimension of capital control: you hear more and more New Yorkers moving to Austin, Texas, because New York taxes are too high. But what's the result? Locals in Austin are also dissatisfied because their property prices are now anchored to New York's economic benchmark, not their own local market—creating a new affordability crisis.

This is a capital control issue as well as an intergenerational liquidity transformation issue. Both of these dimensions are levers that policymakers can adjust. The U.S. once proposed a 50-year mortgage to experiment with liquidity transformation. But this is just the beginning of the biggest issue in society; that is, young people simply cannot afford to buy houses.

Host Kevin: Coming from a rational ordinary male perspective, I've been working for a few years, have a girlfriend, getting married, and having a child, most likely needing a house. But I also hope this is a smart investment because I've put a lot of years of salary and hard work into it.

Now you're telling me that most of these investments are actually not good investments, they're bad investments. So if I'm 30 or 35 years old, have saved $100k, $200k, or $500k, and can also apply for a mortgage, what should I do?

Jeff Park: That's the crux of the issue. I often tell people who move to New York that New York is fundamentally a renter's market, and renting is more cost-effective economically. When you own a property, you have to pay taxes, utilities, maintenance fees, mortgage insurance, property insurance—all of which will ultimately eat into your returns, to the point where your capitalization rate could be lower than 2%, if you're lucky to even hit 2%, sometimes even below 1%. This means that you'd be better off putting your money into a money market fund earning 3.5%. The reason you still accept a return of less than 1% is simply because you're hoping for property appreciation, so the whole path is essentially a bet on property appreciation.

For young people, at least in New York, renting is the economically right choice. However, my view would change once you start a family. Once you have kids, stability becomes more important—you need to figure out which school your child will attend, need to plan for the next 15 years of your life. This sense of security and certainty comes at a premium, so you indeed need to make a commitment. But this is no longer an economic decision.

You buy a house at that stage not because you expect a price increase, but because you are building a family and need a stable social safety net. This is also why I think more and more young people are reluctant to have children: economically speaking, renting forever is the optimal solution—until you have to have kids.

And if you have kids, you can't rent, and the whole cycle is broken. Either you don't have children, or you have children but the pressure is so great that you don't want to deal with it.

Another common option is to wait for the older generation to pass away, for the wealth to be inherited. This is common in Asia, particularly severe in Japan, and also a similar issue in South Korea—where a large amount of wealth is concentrated in the hands of the baby boomer generation, and this wealth will eventually be passed down, but there is a time gap.

They are living longer, while the millennial generation is growing up, but assets have not decreased in price along with it. This time gap has created a huge friction between the young and the old.

How People are Dealing with the Current Housing Investment Crisis

Host Kevin: So, my options are either to wait until my parents pass away in their 60s or 70s and inherit property, or find another way. Is there any other way for people in their 20s, 30s, or 35s?

Jeff Park: Yes, there is indeed now a wealth storage method that is better than real estate. This form of wealth doesn't need maintenance, doesn't take up physical space, doesn't need repairs, is not taxed annually, and there is no risk of being confiscated by the government for any reason—that's Bitcoin. Bitcoin is so crucial to me because it directly alleviates the stress points of real estate.

In other words, someone in the past bought a $40 million penthouse in New York because they needed to preserve wealth, needed to move $50 million, and historically didn't know how to move $50 million easily. Now they can just buy bitcoin directly, you don't need to pay annual service-like taxes on it, no need to worry about confiscation.

In theory, there are all kinds of possibilities within the U.S. property rights that assets could be seized if they decide one day you should be on some list, bitcoin allows you not to worry about those things.

This means that this part of the money will no longer flow into real estate. If this money no longer flows into real estate, the real estate demand curve will be reset, house prices could fall, and young people could afford a house. Of course, there is a huge political apparatus around constantly protecting rising house prices, as homeownership brings wealth, it is the fundamental social contract of the American Dream. And bitcoin is fundamentally challenging this.

I think this is the greatest test for Bitcoin adoption: more people need to see Bitcoin as the primary store of value relative to other assets like real estate and then draw the same conclusion: it's a win-win for society as a whole. The short-term pain could be falling house prices, but as a store of value, it is more efficient and much less discriminatory than today's property system.

The ultimate reason for rising house prices is not that the houses themselves have become more valuable, but that the dollar has been continuously devalued, while people tend to gather in more productive places—the natural law of capitalism is that the strong get stronger. Without exports, this tension will eventually break. We have already seen this in New York—the lighthouse of this capitalist world, unexpectedly having a strongly left-leaning mayor, a day no one could have anticipated.

Smart Investor Framework Analysis

Host Kevin: Let's talk about your article—"The Fall of the Smart Investor and the Rise of the Ideological Investor." What is a smart investor? Why did they fall?

Jeff Park: The "smart investor" is a framework I use to describe the practices of investors like Warren Buffett and Benjamin Graham. When people talk about value investing, there used to be a very specific meaning: buy stocks that are relatively cheap in cash flow, buy stocks with a trading multiple lower than growth stocks, focus on dividends rather than profit reinvestment. In summary, it's one word: cheap.

My argument is that this era has already ended, and it ended a long time ago—because if you look at the best-performing asset globally today, cheap hasn't brought good returns. What has truly performed well is those things that are scarce, just like those top-tier mansions I mentioned. This intelligent investor framework is built on many assumptions taught in schools, but I believe these assumptions have now completely crumbled.

One of the core assumptions is: every asset must be priced at a risk-free rate. The risk-free rate is the government bond rate—this is the foundation of all pricing models, it is the Capital Asset Pricing Model (CAPM), Discounted Cash Flow (DCF), and the cornerstone of equity risk premium.

But all our understanding of the risk-free rate is changing, which is also why the 60/40 investment portfolio is becoming increasingly obsolete—the correlation between US treasuries and the stock market is growing because the fundamental concept of "risk-free" is being challenged. Why? Because the credit quality of the United States is being challenged.

After removing the assumption that "the risk-free rate is the anchor of all asset pricing," the world becomes clearer: what are people truly buying today, things with ideological weight? What is the value driver beyond just "cheap"? This is what I call an "ideological investor". Culture, how AI influences people's investment ideology, geopolitics—these are real value creation mechanisms, not noise to be hedged against.

What an Ideological Investor Would Do

Host Kevin: What exactly does an ideological investor do?

Jeff Park: Ideological investors spend a significant amount of time thinking about what the future holds—something past models can't tell you because the premises of those models are being rewritten, so you need to look outward. How do you gain an edge in such a market?

You need to deeply consider the flow of funds, think about the shift in the liquidity paradigm, think about where buyers of various assets are coming from. You also need to consider the possibility of asset manipulation and how to position yourself outside of this manipulation. So you need to build an investment framework that allows you to exit certain dynamics in ways most people have never told you about.

For a simple example, mothers have a natural intuition about what is valuable. They know that the most valuable things sometimes exist in the physical world—like that unique piece of jewelry, or that Hermès bag that has outperformed the S&P 500 for over twenty years.

Top-tier art is another asset that falls outside of traditional stock investments but can serve as a wealth diversification tool. Mothers actually have a deeper understanding of this investment paradigm than those who have received a traditional financial advisor education.

Your financial advisor tells you: 60/40, buy stocks buy bonds, then throw in some money to buy private equity, private credit, venture capital. But fundamentally, all of these are the same thing — they are all related to the same global arbitrage trade involving the risk-free rate and the macro cycle. What you really want is another pool of assets completely unrelated to these; that is true diversification.

In this framework, cryptocurrency and Bitcoin serve as useful proxies — because at least until the Bitcoin ETF is launched, these investors are independent of the stock market, and Bitcoin's price movement is not correlated with the stock market.

I believe that before mainstream assets, individual investors still have many such opportunities to explore and benefit from. Cryptocurrency, gold, Hermès bags, Pokémon cards, sneakers... these are all examples.

The Important Role of Data in Wealth Creation

Jeff Park: There is another important asset class that has not yet found a product-market fit, and that is data. Your data is actually very valuable, but most people are giving it away for free because they don't know how to monetize it. My generation, the millennial generation, grew up unknowingly giving away data on Facebook without realizing the cost.

But the younger generation is more aware; they understand the creator economy and know how to act as an intermediary in the flow of data to benefit from it. So I believe data can become an asset class in the future, and every individual needs to be aware of what they own and how to monetize it.

The prediction market is a good example — I believe it is a rapidly growing asset class. No JP Morgan financial advisor would sit down and tell you how to bet in the prediction market because they think it's unprofessional.

But I assure you, in ten years, someone will definitely be doing it. Because the data needed to make money in the prediction market is extremely privatized, completely different from other financial markets, and the returns are also unrelated to other markets. More and more young people will move in this direction because they know that all other markets are rife with financial manipulation, and they don't want to play in that manipulated game.

This is why cryptocurrency exists, why Bitcoin succeeded, why DeFi exists, why people trade on the prediction markets, why sports betting has become a track that both DraftKings and Robinhood are betting on, why 2x leveraged ETFs are so popular.

All of this is a trend—a move towards greater individual freedom, more autonomy, away from a world of assets dominated by global arbitrage, a manipulated world.

Jeff's View on Portfolio Diversification

Host Kevin: Raoul Pal said on this show that diversification is dead—it's all about one thing: currency debasement and fiat devaluation, so he is all in on crypto. What are your thoughts? How have you approached building your personal portfolio around this?

Jeff Park: I agree and disagree with him. I disagree because he doesn't see the world as large enough. When he says there is no need for diversification, if he's looking at different faces of the same trade, all tied by global liquidity, then he's absolutely right, and I fully agree. But if you widen your horizon and imagine a set of investable assets not manipulated by the same cross-border fund flows, then diversification has value.

So in the "Radical Portfolio Theory" I proposed last year, I listed out 25 different assets that are not part of our traditional understanding of stocks, bonds, private equity, and public markets. Gold is one of them, and I believe gold has finally shown me its opportunity this year.

As an American, we might mock those who love gold, but from my cultural perspective—in Asia, gold is a massive asset class. My family still gifts me gold at family gatherings as a way to express love, rooted in Asia's cultural understanding of wealth storage. Gold is the most primitive, irreplicable store of value.

In addition to gold, top-tier art is also a fantastic diversification tool—scarce, an asset of high cultural attributes, can appreciate over time through compounding, completely unrelated to stock market levels. In 2008, 2009, some of the best trades were in the art market.

Fine wines are also a type—limited, consumable, perishable, so some specifically trade fine wines as a wealth store. But when it comes to tokenization, there is one thing I am very optimistic about.

If tokenization can work the way I want it to, I'm not interested in tokenizing Apollo private equity funds or BlackRock money market funds — which are already operating to some extent and may see some marginal improvements after tokenization. The real opportunity lies in those long-tail assets — such as top-tier wines, or a small fraction of a yacht.

What Tokenization Brings to the Investment Space

Host Kevin: So you're saying you can tokenize a bottle of wine or a yacht, allowing those without millions of dollars to buy a small fraction with $100 or $1000?

Jeff Park: Yes, historically, people have not had access to these assets because they are hard to acquire, requiring high levels of expertise and curation, and there were no mature channels to serve such demand. But if you ask any billionaire, this is how they invest — and there's a reason yachts continue to be sought after, it's because they are great wealth storage assets.

The only problem is the barrier is too high for the average person, tokenization has the opportunity to truly democratize these alternative assets. I hope in my lifetime to see the 'radical investment portfolio' come to life — where you and I can sit down and talk about that 40% unconventional allocation, and it's no longer what Robinhood and E-Trade recommend you buy.

Is Investing Now Out of Reach for the Average Person?

Host Kevin: What about the average person? My sister, 35 years old, has a regular job, wants to save and invest, she can't do these complex things. What should she do?

Jeff Park: A few days ago, I saw some interesting data: In 2005, only about 5% to 10% of Americans opened a stock account after graduating from college. Now this proportion is close to half. This means that in the past 20 years, young people have become more financially conscious, or at least have the willingness.

Whether they can succeed is another matter, but they have shown interest, and earlier than our generation, they started to understand finance. This is commendable, and I am optimistic about it — as long as they are provided with the right tools and choices.

I also see that many young people are engaged in sneaker trading, Pokémon card trading. Some may find this interesting and on the fringe, but culturally speaking, I think this is what young people need to do — they are diversifying wealth in different ways, rather than just chasing the rise of Nvidia and Palantir .

Playing the game where “numbers only go up” is, of course, possible, but young people can play their own game. If they can play well in their own game, that in itself is a tremendous power.

Why Jeff Proposed Occupy AI

Host Kevin: We talked about currency devaluation, the problems it has brought to the world and our generation, and how asset prices have become so unreasonable, making it so difficult to buy a house. But now AI is coming on top, which is amazing in itself but is also causing many people to lose their jobs.

You wrote an article called “Occupy AI.” You entered the workforce in 2008, experienced the financial crisis, and at that time, there was Occupy Wall Street. Your article is called Occupy AI. Could you first explain what Occupy Wall Street was, and then explain what Occupy AI is?

Jeff Park: I have very vivid memories of Occupy Wall Street because it was a very tangible event, right in the heart of New York City. Many angry populists gathered, camped out, and demanded justice. The reason they demanded justice was that they felt deceived and exploited by Wall Street.

It ultimately stemmed from the subprime mortgage crisis, and also from people feeling that the banks did not truly take responsibility for their mistakes, whether legally or morally. So in the end, it was actually a moral movement: How could we allow the banks to do these things without being held accountable?

Host Kevin: What specific things did they do?

Jeff Park: The subprime mortgage crisis, in simple terms, was reckless risk-taking, astronomical bonuses, and when everything collapsed, there was no price to pay — “privatizing gains, socializing losses.” Taxpayers footed the bill for a distorted, misplaced incentive system.

And it wasn’t just the banks — the rating agencies were also complicit because they were getting paid by the issuers and naturally tended to give high ratings; this allowed people who couldn’t afford houses, people with bad credit, to get loans to buy houses. Everyone turned a blind eye, but economically, it was ultimately unsustainable, and the whole system eventually collapsed.

This is related to AI in that: It is a class war, and AI will also be a class war. Because, in my view, we have never seen a technology as disruptive as AI — it has the potential to completely replace labor while enabling companies to achieve record profits.

We will witness a more extreme K-shaped economy where enterprise profitability continues to rise not because revenue is growing, but because costs are decreasing — and the so-called "cost decrease" is the people who are being laid off.

The Collapse of Free Will Value

Host Kevin: In your article, you wrote: Amazon lays off 30,000 people, and the stock market hits an all-time high — this is the most straightforward depiction of the "collapse of free will price and the skyrocketing of self-determination value."

Jeff Park: I believe that when you ask most people why they work, they would say it is to earn money, but we all have higher aspirations — we want to be productive, make a contribution to society, set an example for our children, build something meaningful for the community, the goal is far more than just making money.

Being productive is fundamentally what it means to be alive — if that is lost, it is not just an economic issue; there will be profound psychological issues.

The biggest blind spot in the AI discussion is precisely the wave of the large language model technology that is depriving humans of the ability to make autonomous decisions, depriving humans of the ability to actively engage and contribute — this is a sense of loss of free will, and many people have not yet realized this. We talk about technological revolutions in history — electricity, cars, trains, these technologies amplified human abilities, you are still working, the technology is amplifying you, but with certain aspects of AI, it may completely eliminate the work itself, and most people cannot all ascend to become "top-level managers implemented by AI".

We have long known — society needs people to do meaningful work, even if that work can theoretically be automated, because that is what keeps society functioning. And this accelerated displacement is the truly terrifying challenge.

What is even more unsettling is that the current discussion around the federal backing of AI data centers is being framed as a matter of "life and death": if we don’t do this, China will, so the investment must be made regardless. When investment is framed in this way, people cannot rationally price its value.

If the total human labor value is $35 trillion and AI can replace 10% of it, does AI today worth $3.5 trillion? These numbers are starting to become absurd. And then the government has to backstop these investments — investments that are actually replacing the people they represent. If the government's role is to maintain the social harmony flywheel, you can't imagine people supporting a program that funds their own replacement, which is why Occupy AI is bound to happen.

The challenge of Occupy Wall Street is: you know who the opponent is, can see them in a suit, wearing an Hermès tie, they are your enemy. Whereas AI, by definition, is intangible, it exists on a platform. You can say it's related to Meta, Nvidia, but no one really "owns" that construct — they all say "we are just a platform, what happens is not my responsibility". AI faces the same problem, and even worse, because this platform now has its own life.

How the "Occupy AI" Moment Will Turn Gen Z and Gen Alpha Toward Bitcoin

Host Kevin: You wrote at the end of the article: Occupy Wall Street turned a generation of millennials into avid Bitcoin supporters, and you are one of them. And Occupy AI will be the moment that turns Gen Z and Gen Alpha into Bitcoin believers. Can you explain it simply?

Jeff Park: Everyone needs an awakening moment to discover Bitcoin. I don't think Bitcoin will quietly seep into a person's life — maybe there are such cases, but usually, an awakening moment is needed. For many millennials, this awakening occurred against the backdrop of the financial crisis because they fundamentally realized: money is not what it seems on the surface. We've been through decades of QE, QT, more QE, and that's what speaks to this generation.

Host Kevin: First, it was Bitcoin's invention during the financial crisis. Very smart people, or a person, a group of people, said we need something new because the system is broken. The second moment is COVID, crazy money printing, making more people realize this is completely unreasonable. Now you're saying, for Gen Z and Gen Alpha, it will be Occupy AI.

Jeff Park: In my experience, Gen Z and Gen Alpha are not as concerned about currency devaluation. It's not that they don't care like you and I do, but they are already in a very disadvantaged position; they are a bit despondent. Within the Millennial generation, there are still those who believe that social security might be saved, although it may not be, but we will link this issue with the Baby Boomer generation. Gen Z and Alpha know that everything is already messed up, and they know they will never benefit from it; they know it's not something they can fix.

So currency devaluation will not be the thing that wakes them up; what's even worse is that as institutions like BlackRock and Bridgewater adopt Bitcoin, it becomes even more suspicious to them. They will say, "Now this is not even my game anymore; this is the game of the old folks, not our money." So for this group, Bitcoin actually becomes more adversarial.

I think AI will work because, just like I am the first generation to truly live in Facebook and understand both sides of it, these kids will also live in AI from the moment they graduate college and compete with it for job opportunities. It has to be something very personal to them to awaken their awareness of what's wrong with society as a whole. I think the AI movement will largely come from the opposition of young forces, which will be a gateway not only to help them understand Bitcoin but also to hopefully rediscover the spirit of the entire crypto.

When Everything Fails, Bitcoin Is the Answer

Host Kevin: I understand Occupy Wall Street, currency devaluation, Bitcoin as a hedge against fiat devaluation. But why would this generation understand Bitcoin's ability to solve problems through Occupy AI or AI? Or as the industry says, Bitcoin is a lifeboat, Bitcoin can help me when I give up everything else?

Jeff Park: Because they will realize that, compared to the legacy assets that the Millennial generation still competes with after Occupy Wall Street, Bitcoin is a better store of value. Occupy Wall Street is still a housing crisis, a housing value crisis. There is an alternative effect there that I don't think young people are so easily sucked into.

In addition, if you believe in the common thread between AI and Bitcoin, it is energy consumption, as they are both energy assets. If you want to vote with your feet, saying you do not want to support certain negative social dynamics and externalities generated by AI, then on the flip side of the same coin is energy being used to produce a scarce asset, which is Bitcoin.

While we are discussing Bitcoin now, I hope the younger generation can revitalize and rejuvenate the spirit of crypto and cypherpunk money. This way, it is not just a store of value structure, and this generation can truly take on the mission of peer-to-peer electronic cash.

Its utility is not just as a store of value; they will, in the process of combating AI, rekindle everything around the necessity of decentralization. Even though for millennials, decentralization is more of a talking point and not necessarily something native, as we also live in many centralized intermediaries and benefit from them. But there will be a group of investors coming up who are fundamentally against these things from the start. Decentralization is no longer just a talking point but will become their ultimate livelihood right.

Why Decentralization is Crucial in the AI Field

Host Kevin: Why is decentralization so crucial in the AI era?

Jeff Park: Because I believe the essence of AI is ultimately centralizing all your data, harvesting it, and then using it on your behalf. If you believe that decentralized efforts can grant you attribution rights, that you can be rewarded for contributing information, then this is part of the whole decentralization issue.

I'm not saying I'm pessimistic about AI—I do believe AI has tremendous positive implications for society, but the key is that the benefits of technological progress need a mechanism to allow contributors to share in them. The problem is, profits are extremely centralized now, while consumption is happening at every individual level, with no compensation. If the data attribution issue can be solved, AI's future is bright. If my data is making models smarter, I need to be compensated in some form—and this reward mechanism theoretically can only be achieved through cryptocurrency because it has attribution properties.

Host Kevin: That's why the existence of those decentralized AI companies and decentralized computing power projects is meaningful—many projects may just be riding the AI hype to make money, but the ideal itself should not be denied because it might truly be one of the answers to solving this massive problem.

Jeff Park: From a critic's perspective, the crypto space does have a lot of dishonesty, but we still need to hold on to that belief that the ideal is achievable, as it is our way of intersecting with a larger mission.

Is Investing in Bitcoin Too Late Now?

Host Kevin: What does this mean for Bitcoin today? Many people, perhaps Gen Z or Millennials, would say that Bitcoin fluctuating between $120,000, $100,000, and $70,000 is still expensive for the average person. They would say Bitcoin is too expensive, I have missed the opportunity, this is my only lifeline. What would you say?

Jeff Park: I think more people need to start thinking about one question: What would happen if you don't have Bitcoin? Instead of focusing on the upside potential, it is better to seriously consider what kind of downside risk you are exposed to without Bitcoin in your investment portfolio.

In other words, not holding Bitcoin is essentially shorting Bitcoin. Regardless of how much wealth appreciation there is, holding Bitcoin is advantageous, even if it's just because fiat devaluation is happening at an unprecedented rate, and history repeatedly tells us that this currency reset is cyclical.

If you study the history of dollar hegemony—from the Bretton Woods system to 1971, to the Nixon shock—all of this tells you that the illusion of dollar hegemony we currently live in depends on the effective control of fiscal deficits, and we are heading towards an out-of-control path. In this situation, you need to consider owning an asset that can withstand the global arbitrage cycle—Bitcoin is the most worthy asset to consider.

People Should More Actively Include Bitcoin in Their Investment Portfolio

Host Kevin: You mentioned thinking about the downside risk. But as a CIO, you talk about decentralization, you talk about investment frameworks. For an individual, having Bitcoin as a significant part of their investment portfolio, taking a more aggressive approach rather than just a defensive one, does that make sense?

Jeff Park: I know many people in the crypto industry who have a large portion of Bitcoin in their wealth. They use a "barbell" strategy: one end is a significant amount of Bitcoin, the other end is a money market fund, with the risk level in the middle layer basically uninvolved.

I still believe that having a certain level of diversification between the two can help you expand the freedom boundary of capital allocation. People should seek a broader diversification than just a simple two-asset dumbbell. But if you force me to choose only two assets, Bitcoin must be one of them — it is the least correlated, most orthogonal asset to everything else in the global capital markets. As the second asset, I would choose an income-generating asset based on the dollar. For example, I tend to think we are headed back to a zero-rate environment.

I know many people are skeptical about this, but if global arbitrage trading is to continue, only rate reductions can keep this system going. If so, the 30-year Treasury bond is now a great speculative opportunity — rates drop, bond prices rise.

This is also my bet on the US. I believe the US will ultimately win, finding a path to problem-solving through its ingenuity. The dollar, stablecoins, dollar-denominated assets are still the world's primary reserve. So I am long on long-term government bonds, this is my view on the US.

Jeff's Preparation for His Children to Embrace the Future of 'Occupying AI'

Host Kevin: You have two children and a Bitcoin mindset. In a future world of Occupy AI, how do you raise and prepare your children?

Jeff Park: Bitcoin has taught me many things, and it has taught many people — you can never know enough, you can never fully understand anything. We must remain open and humble to all possible attack vectors, because this thing, whether at the technical or social level, is far greater than any one person, any one model, any one paper.

So, it is a living experiment, to succeed, you must maintain an open mind. I try to instill this spirit in my children, combining money and the context of Bitcoin's evolution to help them build resilience. There's a saying "practice makes perfect," but I prefer to tell the kids: Practice is not for perfection, practice is for progress.

Nothing is perfect — not even Bitcoin, these things will never reach the perfection recognized by empirical measurement, but they will progress. All the practice we do in life is in pursuit of that ideal direction. I try to integrate Bitcoin's mission into the kids' daily lives, though I won't drag them into discussions about nodes and forks, maybe when they are older.

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