On 25 October 2023, Anthony Pompliano, the founder of Pomp Investments and co-founder of Morgan Creek Digital Assets, appeared on CNBC’s “Squawk Box” to discuss various aspects of Bitcoin with co-anchor Joe Kernen. The conversation touched on Bitcoin’s recent price surge past $35,000, the ongoing status of Bitcoin ETFs, and the broader economic factors influencing the cryptocurrency market.
Pompliano began by emphasizing the need to look back at Bitcoin’s performance in 2018 and 2019 to understand its current state. He noted that Bitcoin’s resilience during those years convinced many investors, including Druckenmiller, to buy into the cryptocurrency. Pompliano highlighted that 76% of Bitcoin hasn’t been sold in the last year, and 56% hasn’t been sold in the last two years, indicating a strong holding pattern among investors.
According to Pompliano, Bitcoin’s price has been driven by a supply and demand imbalance, exacerbated by monetary policies like low-interest rates and money printing. He suggested that the current high-interest rates and attempts to avoid printing money are temporary. Pompliano predicted that governments would likely revert to looser monetary policies, which would positively impact Bitcoin.
When asked about the approval of spot Bitcoin ETFs by the U.S. SEC, Pompliano expressed optimism. He mentioned that BlackRock is seeding a fund, indicating preparation for ETF approval. While acknowledging that nothing is certain, he argued that BlackRock wouldn’t risk its reputation without good reason. He also noted that the political composition of the approval committee, consisting of three Democrats and two Republicans, doesn’t significantly impact Bitcoin’s inherent value or functionality.
Pompliano argued that Bitcoin is largely indifferent to political and geopolitical events. He described Bitcoin as the “most disciplined central bank in the world,” emphasizing that it doesn’t react to news or geopolitical shifts. However, he acknowledged that the price of Bitcoin is sensitive to such factors.
Highlighting Bitcoin’s 100% increase since the beginning of the year, Pompliano stated that the market is sending signals worth paying attention to. He also pointed out that while the general market sentiment might be risk-averse, savvy investors are taking a risk-on approach, especially with assets like Bitcoin.
Pompliano clarified that while companies dealing with Bitcoin care about Washington’s stance, Bitcoin itself, being a decentralized protocol, is largely unaffected. He argued that even if the U.S. government were to ban Bitcoin, it would not deter global interest in the cryptocurrency.
When asked about future price predictions, Pompliano suggested that Bitcoin has historically shown hundreds of percent of appreciation in bullish markets, and he doesn’t see that trend changing. He also emphasized that Bitcoin is a true free-market asset, not subject to bailouts or circuit breakers, which contributes to its volatility.