Yesterday was ugly. The S&P 500 fell 4.36%, the Nasdaq Composite fell 5.52%, and the Dow fell 3.44%, their worst day since the April 2025 tariff panic. The more concentrated Nasdaq 100 fell 6.4%, its worst session since March 2020. Investors are worried that the Democrats taking Congress will slow the data-center buildout. I think the resulting market collapse makes continued support for that buildout more likely. The AI trade has become too important to economic growth, financial markets, and national security for either party to comfortably let it unwind.
ING estimates AI-related investment accounts for 37% of US real GDP growth after netting out imported hardware. Goldman Sachs forecasts $1.2 trillion of capital spending next year by five big US hyperscalers. That is an extraordinary amount of spending concentrated in a handful of companies. Whatever politicians believe about how many genders there are, they still have to answer for jobs, retirement accounts, electricity prices, and America's ability to compete with China. Losing the AI race would be a national security disaster. Voluntarily choosing austerity to cure this spending-addiction withdrawal flu would also be wildly unpopular. Hair of the dog is always the easier choice.
My bet is that the fiscal and monetary policy uniparty eventually finds a way to keep the spending going. Washington can subsidize infrastructure, guarantee financing, or make permitting easier, while the Fed can ease financial conditions when the pain becomes sufficient. Inflation can delay that response, and politicians cannot order the Fed to cut rates. I still expect them to choose support over a prolonged reckoning. The bill shows up over time in the cost of living, a vanishing middle class, and an increasingly despondent population. When working hard and saving no longer feels like a credible path to getting ahead, of course promises of socialism find a receptive audience.
I believe that is a terrible answer to a real problem. The history of communist regimes is filled with repression, famine, and the destruction of the very people they claimed to serve. Earners and savers need a way to keep the value of their work without depending on the next politician's promise. Learning to use bitcoin as a long-term savings technology gives people a reason to plan, build, and believe in a better future again. That is why I remain so positive about its adoption. Bitcoin is hope.