Recently, Anthony Pompliano (aka “Pomp”), Co-Founder of Morgan Creek Digital (MCD), wrote about “the loss of confidence in the crypto industry.”
Pomp told his 1.6 million Twitter followers:
“… people are drastically underestimating how much damage has been done this week to institutional interest in both bitcoin and the broader crypto ecosystem… Bitcoin will not only survive, but it will thrive in the coming years in my opinion. But we shouldn’t ignore the fact that this week was a set back for everyone, regardless of what corner of the industry you play in…“
Over on his blog, Pomp explained in detail why Bitcoin has such an important role right now:
“Finance is a confidence game. Everyone from investors to entrepreneurs have to believe that the system works, that players are held to the same standard, and that a buyer of last resort will appear in a moment of crisis… But what happens when we lose confidence? Bank runs…
“We have seen the loss of confidence in the crypto industry too. The most recent example was FTX, which triggered billions of dollars of withdrawal requests. Some people were able to get their money out, while others were too slow and FTX paused withdrawals. Once the bank run starts, companies don’t have very many options…
“The ‘crypto industry’ was originally just the bitcoin industry… As the industry got bigger, and more sophisticated players got involved, there was an air of legitimacy that began to fill the room. Institutional investors. Billionaire hedge fund managers. Daily coverage on financial news television shows. Celebrities and athletes. Arena naming rights. Big conference parties at fancy locations.
“It was the greatest show the digital world had ever seen. But almost all of it was bullshit. Almost every single token will eventually be worthless. There are nearly 0 mainstream users outside of the echo chamber of crypto… The ‘crypto industry’ got cocky and now the largest capital pools in the world know the industry isn’t ready for showtime…
“Throughout all the noise, and without any outside capital investment, Bitcoin has continued to shine for nearly 15 years. It has completely separated itself from the crypto industry… When the confidence game is over for the crypto industry, the market comes back to bitcoin… There is nowhere else to flee. There is no bank run on bitcoin. In times of chaos and uncertainty, people want confidence and security. There are bitcoin maximalists being born every minute right now…
“This is a natural part of the cycle. In our darkest moment, bitcoin steps to the forefront. It provides the solution. It solves the confidence crisis. Block-after-block of transactions. The digital payment network continues to provide a long-term oriented savings technology that affords anyone in the world the opportunity to protect their purchasing power over decades… If you can ignore the price and simply look at the underlying fundamentals — bitcoin continues to grow stronger.“
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Featured Image via Pixabay
