In a series of recent social media posts, renowned crypto investor and influencer Anthony “Pomp” Pompliano has shared his optimistic outlook on the future of the cryptocurrency industry. Highlighting the potential approval of an Ethereum exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission, Pomp stated, “If they approve the Ethereum ETF, they are […]
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Anthony Pompliano Predicts Bitcoin’s Price Could Double Soon; Leading Crypto Could Eventually Eclipse Gold
In a CNBC interview, Pomp Investments’ Anthony Pompliano delivered an optimistic forecast for bitcoin, suggesting a potential rise to 8,000 per unit shortly. He pointed out that historically, bitcoin has doubled its value within 18 days or less after surpassing previous peak prices on three out of four occasions. Pomp Investments’ Founder Envisions Bitcoin Outperforming […]
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Bitcoin Should Not Be Measured In Dollar Terms, Says Pompliano
The value of bitcoin is currently being measured in dollar terms and this is understandable given that fiat is still the most dominant form of currency. While those in the crypto space believe this will not continue for much longer, it is still important to price the digital asset in fiat currency to show its value to investors.
However, millionaire investor Anthony Pompliano has countered against this accepted form of valuing bitcoin. He addressed the way the digital asset is valued as well as the dreaded volatility on a recent episode of CNBC’s Squawk Box.
Don’t Value Bitcoin In Dollars
Presently, one bitcoin is trading for around K. This apparent value is derived from the dollar, which confers a fiat value upon an asset that was created to replace it. Pompliano says that this should not be so. Instead, bitcoin should be priced in bitcoin. This way, “one Bitcoin still equals one Bitcoin,” says the investor.
Related Reading | Billionaire Ricardo Salinas: Forget Fiat, Buy Bitcoin Bitcoin Instead
Bitcoin’s value, when gauged in bitcoin, does not really change. The deflationary asset was designed in a way that it appreciates in value over time rather than depreciate, as is the case with the dollar.
However, Pompliano notes that people ignore or overlook this part because they are so used to using dollars in their everyday lives. Bitcoin was never really meant to be priced in dollars as the issues that already plague the fiat currency could then translate onto the asset, for example, its volatility.
“The dollar itself is hyper volatile as well,” said Pompliano. “We just don’t think of that because all of the goods and services around us are priced in dollars.”
BTC continues downtrend | BTCUSD on TradingView.com
Volatility Is Good When It Favors You
Speaking to host Joe Kernen, Pompliano revealed his thoughts around the volatility that is one of the hallmarks of bitcoin. Said volatility has been one of the most mentioned reasons when prominent figures and governments have advised investors to steer clear of the digital asset, explaining that they are prone to losses due to the widely fluctuating nature of the prices.
Related Reading | Why Bitcoin Will Never Surpass The Market Cap Of Gold
Pompliano however does not see bitcoin’s volatility to be a bad thing. He explained that volatility is mainly a matter of how it affects an investor. An example of this is when a digital asset’s price swings upwards and the investor realizes gains from this move. In this scenario, they would accept volatility as being a good thing. But if the opposite happens, then it would be regarded as a bad thing.
“Volatility is not good or bad, right? Basically, volatility is only bad when it goes against you, so if you long an asset and it goes down you don’t like volatility, if you long an asset and it goes up, you do like volatility.”
The millionaire also pointed out that another issue was that bitcoin’s volatility was also being mentioned in dollars. Given the latter’s also volatile and depreciating nature, Pompliano said that it was a flawed way of measuring volatility.
Featured image from CoinDesk, chart from TradingView.com
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Keep 1-5% Portfolio in Bitcoin, Pompliano Tells Investors
Investors are irresponsible if their portfolios have no exposure to bitcoin, according to Anthony Pompliano of Morgan Creek Digital Assets.
The co-founder & partner said in his latest “Off the Chain” podcast that it makes sense for fund managers and investors to keep 1 to 5 percent of their capital in bitcoin. He explained that the cryptocurrency is presenting itself as the perfect global hedge in times of economic uncertainties. That should prompt investors to take notice as their investments in the mainstream markets threatens to shrink any further.
“We are living in exceptionally volatile and unpredictable times. Institutional investors have sought out non-correlated assets as portfolio diversification tools for decades,” wrote Pompliano. “Now that Bitcoin is presenting itself as the perfect global hedge, it will quickly become irresponsible for these investors to remain with 0% exposure to the digital currency.”
The inverse correlation between $SPX (blue) & #Bitcoin (Candles) / #Gold (orange) remains strong. My thesis is money will continue to flow into these assets in a slowly declining market. If it turns into a crash they may get sold off in a scramble for liquidity. pic.twitter.com/xsS7iuTURY
— Alex Saunders (@AlexSaundersAU) August 5, 2019
Economy in Red
The statements borrowed sentiments from the economic uncertainties arising on a global scale. United States President Donald Trump has escalated his trade war with China after threatening to impose an additional 10 percent tariff on 0 billion worth of Chinese imports. In response, Beijing depreciated its national currency – the Chinese Yuan – below for the first time in eleven years.
China continues to remain unfazed. The superpower announced yesterday that it is suspending agricultural purchases from the US. The White House, in retaliation, branded Beijing as a currency manipulator.
The result of the catfight is an economy in red. Global markets are plunging, with both Asian and US equities falling right of a cliff.
Fragile calm returns to stock mkts as Yuan steadies. Asia equities not able to fully follow through rebound on Wall St after PBOC set Yuan daily fix marginally stronger than 7 a dollar. Bonds continue rally w/US 10y yield at 1.68%, Gold at 6y high, Brent Oil w/ .85 in bear mkt pic.twitter.com/cEdGPofe9X
— Holger Zschaepitz (@Schuldensuehner) August 7, 2019
Among the assets that are returning profits amidst an economic meltdown is bitcoin. The non-sovereign asset is performing exceptionally well as investors flock towards its market for their reasons: to fight capital control in China, to protect their investment portfolios, or whatnot.
“Bitcoin,” wrote Pompliano, “is a non-correlated, asymmetric return-profile asset. It has proven even to be inversely correlated in times of increased global instability. Take May 2019, for example — the trade wars were escalating, and threats of tariffs were being lobbed at multiple countries. Bitcoin was up 55% for the month and showed a negative correlation to the S&P 500 and gold.”
The Anti-Bitcoin Views, Meanwhile
The inverse proportionality between bitcoin and global markets is visible on the charts. Nevertheless, some financial experts believe the ones that are driving the cryptocurrency higher are not investors, but speculators. Peter Schiff of Euro Pacific Capital thinks on the same lines.
Bitcoin may be up more than gold or silver today, but gold and silver stocks are up more than Bitcoin. Since there is much more upside potential with less downside risk in mining stocks than there is in Bitcoin, speculators should move from Bitcoin to precious metals stocks!
— Peter Schiff (@PeterSchiff) August 5, 2019
“Why does CNBC allow Brian Kelley to lie about Bitcoin,” he tweeted about a Squawk Box coverage about the cryptocurrency’s rise. “He just assured viewers that a new high in Bitcoin is a certainty because for the first time an institutional herd is now buying. Brian, I challenge you to identify those institutional investors that have piled in!”
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‘Shame on You,’ Shark Tank Judge Tells Bitcoin Bull Pompliano
Kevin O’Leary, the judge of the popular business reality show Shark Tank, has slammed Anthony Pompliano for allocating half of his wealth to bitcoin.
“Shame on you,” the television personality told Pompliano on the sidelines of a CNBC Squawk Box debate about bitcoin’s performance against gloomy macroeconomic periods. O’Leary stated that he purchased 0 worth of bitcoins about two months ago, but the value of those assets now dropped to about . And if a person does not assume the risks of holding bitcoins and concentrates half of his wealth on them, then he is “nuts.”
“I forbid that,” O’Leary told Pompliano. “That’s insane. That breaches everything about diversification and investing.”
"I teach this stuff you never go beyond concentrations of that nature. 50% shame on you! That's nuts!" @kevinolearytv tells @apompliano #btc pic.twitter.com/e4pTEt5sgC
— Squawk Box (@SquawkCNBC) August 6, 2019
Non-correlated Bitcoin
Across the table, Pompliano explained why he increased the risks of his portfolio by putting bitcoin, a volatile asset, on the driving seat. The Morgan Creek Digital Assets co-founder told O’Leary that the cryptocurrency had proven itself as a non-correlated asset, i.e., it does not get heavily influenced by macroeconomic events. He stressed that every significant financial institution should hold bitcoin for the very same reason.
“Institutions,” said Pompliano, “have spent decades looking for assets to use as a diversification in their portfolio. We’ve been banging the drums [from] over a year saying [bitcoin] is a non-correlated asymmetric asset.”
He added that bitcoin surged 55 percent soon after the United States President Donald Trump escalated his trade war against China in May. That proved a negative correlation between the cryptocurrency and every significant financial market, including the benchmark S&P 500 Index and Gold.
“There’s people around the world that are electing to put their wealth into something that is controlled by software and cannot be manipulated by a single country or politician,” Pomp said.
"There's people around the world that are electing to put their wealth into something that is controlled by software and cannot be manipulated by a single country or politician," says @apompliano on #btc pic.twitter.com/3ZpE53xl91
— Squawk Box (@SquawkCNBC) August 6, 2019
The Shark Does a Flip
The difference-in-opinion between O’Leary and Pompliano surprised onlookers in the cryptocurrency community. That is because O’Leary earlier appeared positive about the prospects of bitcoin. He called the cryptocurrency “a proxy for central bankers,” stating later that he would be interested in it if it’s market valuation soars above a billion dollars.
“So is it here to stay? Oh yeah. So will I put 2-3% in it? I think I might,” O’Leary had told CBC in 2013.
Comments he made:
– “This is a proxy for the mistrust people have in central bankers”
– “Once it crossed B market cap I became interested”
– “So is it here to stay? Oh yeah. So will I put 2-3% in it? I think I might”— Ceteris Paribus (@ceterispar1bus) May 15, 2019
His opinions about bitcoin flipped following his attempts to use the cryptocurrency as a mode of payment. In May this year, O’Leary admitted that he tried bitcoin to complete a real estate transaction but fell short due to its price volatility. He later called bitcoin a useless currency.
“But everyone says, yes, you can. But, what happens is the receiver wants some guarantee. Let’s say you want to buy a piece of real estate for million in Switzerland. […] They want a guarantee that the value comes back to you as currency at ten, you have to somehow hedge the risk of bitcoin. That means it’s not a real currency.”
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Countries will Adopt Bitcoin at Some Point: Pompliano
Countries that embrace bitcoin would be frontrunners in the financial technology space, according to Anthony “Pomp” Pompliano of Morgan Creek Digital Assets.
The co-founder & partner told CNBC Squawk Box during a panel discussion that some nation would one day decide to adopt bitcoin. He cited Game Theory, a study of strategic interactions between rational decision-makers. In the case of bitcoin, those decision-makers are the countries that compete with each other to gain an advantage in a particular area. Pomp believes bitcoin is quite like an industry that creates regulatory competition among nations across the world. So even if one country goes easy on it, the others are likely to do the same to maintain the so-called contest.
“Look at Singapore.” Pomp explained. “If they say, bring it on; we’re going to provide fair rules. We will give your clarity because we want companies here.”
How will the crypto market shake out with regulation? @apompliano & @melt_dem discuss the great #btc debate pic.twitter.com/5CRB8gMYrH
— Squawk Box (@SquawkCNBC) July 30, 2019
Bitcoin and US
The statements appeared amidst growing tensions in the US crypto regulatory space. It started with the introduction of Facebook payment cryptocurrency Libra, which prompted US lawmakers to raise concerns about its intention to replace sovereign currencies. Libra’s underlying nature and technology took inspirations from Bitcoin. That prompted regulators, lawmakers, and the US President himself to consider both as the same.
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
On July 15, the US Treasury Secretary Steven Mnuchin called bitcoin “a national security threat.” He later appeared in an interview on CNBC and – as many noted – calmly hinted that he would wipe the US cryptocurrency industry from existence in the next five or six years.
“I would bet even in five to six years I won’t even be talking about bitcoin as Treasury secretary,” Mnuchin said.
Regulating Bitcoin Intermediaries
CoinShares’ Chief Strategy Officer Meltem Demirors, who appeared alongside Pomp in the CNBC panel discussion, believes the US is all about rules. The former World Economic Forum councilwoman said regulators in the US have no problems with people who use bitcoin as long as they follow the law.
“One of the most important things for most of the hardcore Bitcoiners is that they have a choice,” Demirors said. “They can choose what they want to do with their bitcoins – who to transact with, who to interact with. This whole movement is about eliminating our dependence on intermediaries.”
Meanwhile, she added that US regulations are more about protecting people who interact with third-party companies to access bitcoin services. Excerpts:
“We see large scale systematic risks coming from these institutions so the idea of bitcoin doing away with intermediaries is good one. But, in fact, we have become more dependent on them than ever. Just the fact they were able to obtain user accounts from Coinbase is a great example.”
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Pompliano: Trump’s Tweet Puts Spotlight on Lack of Trust Bitcoin Solves
Last night, the entire crypto Twitter became electrified with chatter when United States President Donald Trump tweeted about “magic internet money,” also known as Bitcoin and cryptocurrencies.
According to Morgan Creek Digital partner and co-founder Anthony “Pomp” Pompliano, while Trump’s tweet was indeed significant, it also sheds a light on how Bitcoin is designed to address the trust issues that humanity faces with governments, and corporations in charge.
Pomp: Trump Tweets About Bitcoin and Crypto, Highlights Trust Issues
In a recent interview appearance on CNBC’s Squawk Box with host and recent Bitcoin supporter Joe Kernen and correspondent Melissa Lee, Morgan Creek Digital partner and co-founder Anthony Pompliano discussed the significance of United States President Donald Trump tweeting about Bitcoin and cryptocurrencies, or as he calls them “magic internet money.”
Related Reading | Crypto Pundit and Goldbug Peter Schiff Begins to Warm Up to Bitcoin
The outspoken Bitcoin evangelist who recently gifted goldbug Peter Schiff his first BTC says he never envisioned the day when the president would be tweeting about cryptocurrencies like Bitcoin.
"If you said 10.5 years ago the President of the United States is going to be tweeting about magic internet money, we would have never envisioned that day," says @APompliano on bitcoin #btc pic.twitter.com/lQQY46kZUl
— Squawk Box (@SquawkCNBC) July 12, 2019
It wasn’t just Trump yesterday that made comments about crypto that caused an uproar. The Federal Reserve chairman Jerome Powell also made a comparison of Bitcoin to gold, which caused the crypto industry to erupt with bullish sentiment.
While these comments don’t necessarily mean that Bitcoin is favored by these government officials, in fact it’s the opposite – Trump’s tweet was negative toward crypto, saying its used for illicit activities and its value is made of thin air. Still, the exposure cryptocurrencies have received lately is nothing short of amazing considering how new the asset class is and how it was treated during the last bull run.
Now, it’s getting the respect it deserves, and it appears governments are starting to fear what comes next now that the cat is out of the bag with crypto. Much of the negative comments actually come from Facebook entering the arena with Libra, which has shaken up the political world over concerns of trust and privacy.
No turning back! https://t.co/VBc8INJHHz
— Joe Kernen (@JoeSquawk) July 12, 2019
However, as Pompliano points out, Bitcoin addresses many of the trust issues all of humanity faces with governments and major corporations like Facebook becoming so powerful and so controlling, freedom is in jeopardy. Unlike Facebook’s trojan horse, designed to mine user date that can be sold to the highest bigger, Bitcoin is entirely decentralized, trustless, and needs no controlling party for it to operate.
Related Reading | Venture Capitalist: Bitcoin is the Single Best Hedge Against Traditional Finance
Bitcoin cannot be stopped or controlled, and to many, Bitcoin is the first glimmer of freedom from the control governments have over them, just as Satoshi Nakamoto designed it to be amidst the last economic collapse.
Featured image from Shutterstock
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