Anthony Pompliano, the founder of Pomp Investments, joined CNBC’s “Squawk Box” on 6 December 2023 to discuss the recent rally in Bitcoin, which has seen its prices soar above $43,000.

Source: TradingView

Pompliano described Bitcoin as a “free market asset,” emphasizing that markets are forward-looking. He attributed the rally to investors allocating to Bitcoin in anticipation of future value increases. Key factors driving this include the potential for a Bitcoin ETF and the fact that 70% of Bitcoin’s circulating supply hasn’t moved in a year, indicating strong holding sentiment despite the asset’s significant appreciation.
Pompliano highlighted that the 70% of Bitcoin that hasn’t moved represents an all-time high, suggesting a reflexive feedback loop where limited selling and increasing prices encourage even less selling and higher prices. He also noted that both existing Bitcoin holders and new investors are contributing to the buying activity.

Discussing the broader market outlook, Pompliano pointed to the Federal Reserve’s potential policy changes as a significant influence. He mentioned that markets are pricing in a high likelihood of interest rate cuts in 2024, which is being factored into Bitcoin’s price. He believes this anticipation aligns with the broader expectation that central banks will need to print money to finance debt, making assets like Bitcoin more attractive.

Global Ownership and Hash Rate Distribution

When asked about the global distribution of Bitcoin ownership, Pompliano differentiated between Bitcoin and its hash rate, noting that about 35% of the hash rate is in the United States. He acknowledged the difficulty in pinpointing ownership geographically due to the anonymity of wallets but suggested that the U.S. and Asia are significant players in capital flows within the Bitcoin market.

Pompliano discussed Bitcoin’s potential to match or exceed gold’s market value, suggesting that if Bitcoin simply matches gold, it could reach a valuation of $500,000. He also touched on the possibility of Bitcoin becoming part of the payment system, which could significantly enhance its value.

The interview also delved into the philosophical aspects of Bitcoin’s value. Pompliano argued that traditional finance views, such as intrinsic value, are being challenged by Bitcoin’s rise. He suggested that Bitcoin represents a new worldview, where the perceived value can vary significantly among individuals.

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