Pomp: It's Hard To Be Bearish

As a barometer for global liquidity, Bitcoin just makes sense.

Will bitcoin's price double after the all-time high?

Bitcoin evangelist and entrepreneur Anthony "Pomp" Pompliano has drawn attention to the likelihood of a further significant move up for bitcoin, as it breaks its prior all-time high.

Record ETF Volumes Accompany ATH (And Rejection)
The ETFs were unaffected by bitcoin’s 14% dip, with TradFi continuing to buy hand over fist.

On an interview with CNBC's Squawk Box, he noted that on three out of four previous occasions when it passed the ATH, the price has doubled within 18 days. Add in the impact of the Halving, which is due next month, and there is a very strong case for owning bitcoin.

"Price Discovery"

The reason that price can appreciate so rapidly following the breach of an all-time high is that traders have no cues to follow. Because the price range is completely new, support and resistance levels have not yet been established. In a normal market, these would offer important indications for areas of interest, where traders might see particular risk or return opportunities. "Price discovery" has to take place, and since traders lack clear signposts, that can bring enormous volatility.

Additionally, because everyone who has ever bought and held bitcoin is in profit, there is immense confidence in the market.

Another catalyst this time is the Halving. Bitcoin usually puts in a new all-time high around two years after the bear market low, but on this occasion, it has happened around nine months earlier. This unprecedented strength means it is hitting highs before the Halving, which is likely to have a further bullish impact, since there will be less new supply to sell to buyers.

"Index For Global Liquidity"

The launch of ETFs means that new institutional buyers can access the market. Pomp identifies pension funds and sovereign wealth funds as two major classes of potential buyer. If one SWF comes out and says they have bought, there will likely be a race by others to do the same.

Ultimately, he says, bitcoin is an index for global liquidity. Owning bitcoin makes sense for anyone who believes the dollar is going to be debased in the coming months and years.

US M2 chart (St Louis Fed)
M2, the most liquid part of the money supply, continues to rise.

Given the increase in M2 and soaring debt levels, that's practically a certainty at this point.


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