Earlier today, Anthony Pompliano, founder of Pomp Investments, shared his insights on Bitcoin in a CNBC “Squawk Box” interview.
Pompliano began by discussing Bitcoin’s complex nature, highlighting its dual role as both a risk-on asset and a hedge against inflation, depending on the investor’s perspective. He emphasized Bitcoin’s significant milestone of achieving the highest weekly, monthly, and quarterly close before the halving event, which was historically followed by substantial appreciation in value:
“We just hit a really important milestone before the halving; we just had the highest weekly, monthly, and quarterly close for Bitcoin. The last four times that that’s happened, Bitcoin has appreciated at least 300% through the rest of the bull market.“
Addressing Andrew Ross Sorkin’s skepticism around Bitcoin’s role as an inflation hedge in emerging market nations, such as South Africa (from which he had just returned), Pompliano said a counterexample was the popularity of Bitcoin in Nigeria. He did acknowledge that in some other developing countries, such as Argentina, which are suffering from massive inflation, dollar-backed stablecoins are more popular than Bitcoin. He argued that while some seek it as a hedge against their country’s economic instability, others, particularly in the US, see it as a protection against the dollar’s declining purchasing power.
Pompliano agreed with Sorkin that some people might be buying Bitcoin right now in order to get on the train before it is too late. Despite this speculation, he maintained that Bitcoin’s core value propositions remain valid and compelling to a broad audience.
The conversation also touched on societal trends toward gambling and speculation in financial markets, with Pompliano noting the increasing inclination towards assets perceived as ‘lottery tickets’ amid economic uncertainties and the pursuit of wealth generation through high-risk investments:
“We have become a society of gamblers … why is that occurring? The dollar has lost 25% of its purchasing power in four years.“
Finally, Pompliano talked about the decentralized nature of Bitcoin and its lack of a marketing team, where price movements attract speculators, some of whom go on to become long-term believers.
In a recent memo sent out to investment professionals, Matt Hougan, the Chief Investment Officer of Bitwise Investments, navigates through the turbulent waters of the cryptocurrency market, focusing his lens on Bitcoin’s recent fluctuations. Hougan offers insights against the backdrop of Bitcoin’s price volatility, advocating for a perspective that transcends immediate market tremors.
Hougan critiques the media’s penchant for sensationalizing Bitcoin’s price movements, as he points out, to divert attention from the foundational trends that spell a bullish future for Bitcoin. Hougan’s advice to investors is to rise above the clamor for short-term gains and to anchor their strategies in the solid bedrock of long-term investment principles.
Within his guidance, Hougan emphasizes the significance of key upcoming events for Bitcoin, such as the anticipated halving around April 20, which traditionally impacts its value positively by halving the pace of new Bitcoin creation. Further, Hougan underscores the potential watershed moment for Bitcoin with the anticipated approval of spot Bitcoin ETFs by leading financial platforms like Morgan Stanley and Wells Fargo.
Hougan shares that the investment community is actively engaged in deliberations, expert consultations, and due diligence to weave Bitcoin into the fabric of broader investment portfolios. This groundwork, according to Hougan, signifies the burgeoning confidence and interest in Bitcoin as a viable investment avenue.
Expressing a bullish outlook on Bitcoin’s future, Hougan draws attention to its impressive valuation increase of nearly 300% over the past 15 months. He heralds the launch of spot Bitcoin ETFs in January as a pivotal moment, facilitating unprecedented access for investment professionals to the cryptocurrency market. Hougan views this development as just the beginning of a major shift in global wealth allocation.
Hougan explores the transformative impact of a hypothetical scenario where global wealth managers allocate a mere 1% of their portfolios to Bitcoin. By leveraging Bitcoin’s historical performance, Hougan argues that such an allocation could significantly enhance the risk-adjusted returns of traditional investment portfolios. He projects that a 1% allocation could lead to a $1 trillion inflow into the cryptocurrency market, a stark contrast to the $12 billion ushered in through US-listed spot Bitcoin ETFs since January.
Featured Image via Pixabay
