Pomp Says Global Stage Is Set For Bitcoin Adoption
Pomp noted the current investment trend in Bitcoin is sustained by hundreds of millions in daily inflows into Spot Bitcoin ETFs, outstripping the daily supply.
With prominent investors turning to Bitcoin amidst cash debasement and government debts, Bitcoin is seen as a safe haven against inflation.
Anthony Pompliano—many in the crypto-world know him simply as Pomp—is a regular guest on major US news networks to talk all things Bitcoin. Recently Pomp spoke to Charles V Payne on Fox Business about the new Spot Bitcoin ETF surge in demand and the issues around dwindling supply.
Pomp explained that the current surge in Bitcoin’s price is due to a reflexive move influenced by a significant imbalance between demand and supply. While this is a phenomenon well-known in finance, Pomp said this time around retail investors were able to beat institutions to it.
Bitcoin Demand Outweighs Supply
He says there are approximately hundreds of millions of dollars in new daily inflows into Spot Bitcoin ETFs versus the USD $50 million (AUD $76 million) worth of Bitcoin being mined. This creates a demand over ten times the supply, which necessitates a price increase to balance the demand.
Source: Eric Balchunas/ X
With trading volumes hitting USD $6 billion (AUD $9 billion), doubling previous records, and sustained high inflows (USD $500 million daily) even two months after the launch of major funds like BlackRock’s, the enthusiasm isn’t just initial excitement but a consistent trend, Pomp said.
Additionally, the upcoming Bitcoin halving will slice Bitcoin production in half, which will further put pressure on the price.
Now remember we’ve got the halving coming up where we’re going to go from 900 Bitcoin a day to 450. So, at the same time that all of a sudden, the global financial world realized that Bitcoin might be an asset they want to buy and they’re pouring billions of dollars into it, we’re about to see that network cut their daily production in half. And so naturally, you get a demand shock, you get a supply shock, prices go up.
Investing Heavyweights Buy Bitcoin As Inflation Hedge
Pomp said that back in 2020/21, well-known investors like Paul Tudor Jones and Stanley Druckenmiller came out to say they were buying Bitcoin as an inflation hedge.
Despite an 800% increase and reaching USD $64,000, the anticipated inflation had not yet manifested at that time. But Pomp said the market is forward-looking and so by November 2021, Bitcoin’s price declined as the Federal Reserve began addressing inflation.
Pomp suggests that in today’s economy, with diminishing cash value and high government debt, investing in Bitcoin is wise, not for full investment but as a hedge against currency devaluation.
If you’ve got cash, the single most responsible thing you can do in the financial market at the moment is probably to buy some Bitcoin. You don’t have to put all your money in it. But buying Bitcoin is a great way to actually hedge against the debasement of that currency.
With only 21 million Bitcoins eventually available and not enough for every millionaire globally to own one, this scarcity is expected to continue driving Bitcoin’s price upwards. Pomp is bullish on Bitcoin’s appeal as an investment, alongside other assets like real estate and gold, especially as governments face the need to devalue their currencies.
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Filed under: Bitcoin - @ February 29, 2024 4:24 am