Anthony “Pomp” Pompliano, a well-known figure in the cryptocurrency and blockchain space, is the founder of Pomp Investments. He is particularly recognized for his contributions as an entrepreneur, investor, and influencer in the crypto industry.
Pomp is also known for co-founding Morgan Creek Digital, a hedge fund specializing in blockchain technology and digital assets. He has been a vocal proponent of cryptocurrencies, especially Bitcoin, and frequently shares his views on the future of digital currencies and blockchain technology.
Pomp runs a popular daily newsletter, often referred to as “The Pomp Letter,” where he shares his insights and analysis on technology, business, and finance, focusing on cryptocurrency and blockchain topics. His newsletter is widely read and has garnered a substantial following, offering readers a mix of market analysis, opinions, and interviews with various figures in the tech and finance sectors.
Through his newsletter, podcasting (“The Pomp Podcast”), public speaking, and social media presence, Pomp has become a key influencer in the cryptocurrency community, known for his bullish stance on Bitcoin and his perspectives on the broader implications of blockchain technology for the financial industry.
In today’s issue of his newsletter, Pomp dived into the upcoming spot Bitcoin ETF approvals in the U.S. and the ensuing competition among ETF administrators. His comprehensive analysis covers various aspects, from management fees to market predictions, offering a holistic view of the impending changes in the crypto ETF landscape.
Pomp begins by highlighting the anticipated announcement of spot Bitcoin ETF approvals, which are expected to occur this Wednesday, with trading likely to start before the week’s end, according to Bloomberg’s analysts.
A critical aspect of the upcoming spot Bitcoin ETFs is the management fees set by each administrator. Pomp notes that these fees are being revealed, signaling the start of a fee war in the industry. He points out that Grayscale’s GBTC, a dominant player with substantial assets under management, has historically charged a 2% management fee, citing the higher costs of managing Bitcoin. However, with the advent of competition, Grayscale announced a reduction to 1.5%, which, while significant, still positions them above most competitors.
Pomp references ETF research analyst James Seyffart from Bloomberg for the management fees of other ETF providers, underscoring the rapid evolution of these numbers. He emphasizes that the competitive landscape is shifting quickly, with various providers revealing lower fees, intensifying the competition.
Another area of focus is the bid/ask spread for these spot Bitcoin ETFs. Pomp cites Bloomberg’s Eric Balchunas, who expects a minimal spread of 1-2 basis points for ETFs with healthy volume, indicating that this won’t significantly impact most investors.
Pomp discusses the broader implications of these fee wars, including their potential effect on transaction fees for crypto exchanges. He quotes Van Eck digital assets advisor Gabor Gurbacs, who points out that the cost of holding a spot Bitcoin ETF for a year could be less than a single trade on Coinbase. This could lead to a decrease in transaction fees not only for crypto-native asset management firms but also for crypto exchanges.
Gurbacs also raises concerns about the sustainability of low fees, suggesting that issuers might seek alternative revenue sources, such as securities lending or trading. He advocates for a transparent, higher upfront fee structure, emphasizing the importance of understanding the total cost of ownership.
Pomp shares his predictions for the upcoming (potentially) SEC-approved spot Bitcoin ETFs:
- Approval on Wednesday and trading commencement on Thursday.
- At least $2 billion in AUM within 48 hours.
- Over $5 billion in AUM in the first 30 days.
- Blackrock to have the highest AUM outside Grayscale after 90 days.
- Over $100 million in cumulative marketing spend for spot Bitcoin ETFs.
- At least one spot Bitcoin ETF ad in the Super Bowl.
- Financial advisors to allocate 1-3% of client assets to Bitcoin.
- A sovereign wealth fund to announce a purchase within the first 12 months.
- Increased speculation around a spot Ethereum ETF by the end of Q1.
- Non-Bitcoin ETF issuers to allocate some AUM into the spot Bitcoin ETFs.
- A reduction in Bitcoin’s volatility over the next three years.
- Bitcoin’s compound annual growth rate to fall to ~20% within five years.
