Welcome back to Market Movers Midday. All eyes are on the intersection of crypto and artificial intelligence, and institutional money is coming back into digital assets. Bitcoin and ETH ETFs just pulled in $2.6 billion last week, marking their best week of the entire year. But behind those huge numbers, AI data centers are fighting for access. to America's electric grid, while advanced AI surveillance tools are now being used to track transactions on public blockchains. Well, here at the New York Stock Exchange to break all of this down is Will McEvoy, who's CIO at Cypherpunk Technologies and also private investor to Tyler and Cameron Wilkobos. Great to have you here. Thank you so much for joining me. Thanks for having me. Well, in New York trade, we are looking at Bitcoin as well as ETH extending gains, and Bitcoin is close to that 80,000 level yet once again. But given the buying that we're seeing, what does this tell you about crypto and artificial intelligence?
Yeah, well, I think certainly that crypto is sort of the other side of the coin to AI in many ways. And there's several cryptos, specifically privacy-focused cryptocurrencies, that really give investors strong privacy assurances in a world where AI is very dominant, where surveillance is very pervasive. So that's why we've been heavily focused in the Zcash space. We launched Cypherpunk Technologies at the end of last year, where we're heavily focused on investing in both Zcash and other privacy technologies. But yeah, I mean, to your point, investors are starting to observe that in a world that is heavily dominated by surveillance, you really do need strong privacy guarantees, and I think that's what some investors are realizing.
Yeah, and Will, for viewers out there who might not be as familiar, walk us through what's actually happening to AI surveillance and blockchain right now.
Yeah, so certainly we have been on a sort of a decrease in privacy across society for the past 20 years. We had obviously the advent of the internet, we had communications applications, social media. Now AI is sort of the next decline or step down in privacy. For these AI systems to work to their greatest extent, you're going to be required to give a lot of data about you, about your company, about your business, and so on. So in a world where that is the prevailing macro theme, you're going to want privacy-focused technologies that sort of counteract that. That's where Zcash comes in, that's where private communications applications come in, and so on. So again, that's what we're heavily focused on at Cyberpunk.
Yeah. And when it comes to some of these privacy coins, how do you navigate some of the regulatory headwinds?
Sure. So what's great about the United States is that we have the Bill of Rights. Privacy is a precondition to that Bill of Rights. We cherish things like freedom of speech, and privacy is a prerequisite to freedom of speech. So what's great is that that is sort of known widely, very different from other countries and other regulatory regimes. So we're very confident that when it's time to think more deeply about sort of a regulatory environment for privacy assets specifically, we're very optimistic.
And of course, this week is a very big week when it comes to earnings reports as well as geopolitics and politics with everything that's happening in the markets. But when it comes to the AI trade, a lot of focus has been on data centers here in the US. So give us an idea of what's really happening when we're talking about crypto miners versus AI data centers. What's happening on the ground?
It's a good question. We spent a lot of time on this. So right now, as you point out, you had a lot of crypto miners transition their sites from Bitcoin mining, for example, to AI co-location, meaning they took out all of the Bitcoin machines, they retrofitted the data centers for AI and HPC compute. Those former Bitcoin miners are making about $225 per megawatt hour. It's more profitable than Bitcoin mining, which was just about $100. We found this opportunity actually quite exciting in Zcash mining, which is up over $700 per megawatt hour. So interestingly, a lot of these crypto miners that transitioned to AI HPC, they would be actually much more profitable today if they're focused on Zcash and Zcash mining. Obviously AI is still great, it's profitable, but I think you'll see some additional focus amongst crypto miners in the Zcash space too.
Yeah. And while I have you here, it goes without saying that there's a lot of focus on the midterm elections. And when we're thinking about crypto and AI firms, we know that they're the biggest corporate spenders this year in midterm. So what are money and politics telling you when it comes to this intersection of crypto and AI?
Yeah, it's a good question. Look, I think, I think there's an incentive for both parties to get crypto right. We're obviously in a significantly better position than we were, you know, several years back, where crypto is very much on the brink. We're in a much more optimistic environment. I think that's going to extend for, for the, you know, medium term at least. So yeah, I'm very optimistic generally about sort of crypto regulatory policy.
Yeah, and before I let you go, given the recent ETF flows when we're talking about what we saw in Bitcoin as well as ETH, what do you think we can expect as we head into year-end? And do you think Wall Street is right to be cautious when it comes to some of these tokens?
Look, I think that over the past year or so, the liquidity and the oxygen has been sucked out of the room by AI. I don't think AI is going anywhere. I'm not one who thinks we're in some significant bubble or so on. I think we're in the early innings of AI. But when you think about crypto, crypto has been swimming upstream due to that dynamic. And I think moving forward, it's going to do significantly better. I just think generally, there's going to be more liquidity coming into the market. We saw the Fed and the Treasury specifically. announce their actions, and I think we're entering into a sort of higher liquidity environment. It'll benefit AI, it'll also benefit crypto.
And finally, before I let you go, I do want to zoom in on Zcash in particular. So, given what we've been seeing overall in crypto, what do you think the focus should be on when it comes to Zcash? And for viewers out there, explain the thesis.
Sure, yeah. The way we think about Zcash is it's private digital money. It's an encrypted version of Bitcoin. Bitcoin, again, I don't think is going anywhere. It's a massively important technological innovation. But what we've realized and what other investors have realized is that Bitcoin is fully transparent. We knew that, right? But what most investors didn't expect is that that is a big deal in the world of AI. AI is going to be dissecting all public ledgers, including Bitcoin. it's going to be combining your transaction data on Bitcoin with all this other data that it has on you about your life to sort of stitch your life together and know more about you. Which is, I mean, you can just imagine there's a slew of downstream negative implications of that. And that's why we're so focused on privacy technologies, we're so focused on Zcash, because we view them as a strong, sort of compelling antidote in a world where AI is perverse.
Well, Will, I appreciate your time. Thank you so much for joining us live here at the New York Stock Exchange today. Cool. Thank you. Thank you. Appreciate it.
