Is Bitcoin still the king of the crypto jungle? In a world buzzing with new cryptocurrencies and blockchain innovations, it’s a question on every investor’s mind. Well, according to Anthony Pompliano, co-founder of Morgan Creek Digital, the answer is a resounding YES! Pompliano recently shared his unwavering bullish outlook on Bitcoin in a CNBC Squawk Box interview, and let’s just say, he’s not holding back. Ready to dive into why this crypto veteran is so confident about Bitcoin’s future? Let’s break it down.
Why is Pompliano Still So Bullish on Bitcoin?
Pompliano’s bullish stance isn’t just based on hype; it’s rooted in solid fundamentals and market observation. He highlights several key factors that reinforce his conviction in Bitcoin’s continued success:
- Profitability for Holders: A staggering 89-90% of Bitcoin holders are currently in profit. This is a powerful indicator of Bitcoin’s underlying strength. As Pompliano pointed out, “If you look at how many people [who] hold Bitcoin are in profit… so basically wherever they bought Bitcoin, what that price was compared to now… 89-90% of people are in profit…” This suggests strong holding behavior and belief in Bitcoin’s long-term value.
- Disciplined Monetary Policy vs. Undisciplined Fiscal Policy: In a world grappling with inflation and uncertain economic policies, Bitcoin stands out with its fixed supply. Pompliano emphasizes, “While we have an undisciplined monetary and fiscal policy, I’m not selling my Bitcoin… There are millions of other people who aren’t selling their… Bitcoin and demand continues to increase.” This scarcity and predictable supply are core to Bitcoin’s value proposition as a hedge against inflation and monetary instability.
- Institutional Adoption is Growing: The entry of traditional financial giants into the Bitcoin space is undeniable. Pompliano highlights Invesco launching a spot Bitcoin ETP (exchange-traded product) as a prime example. “We just saw this morning that Invesco is going to launch an (exchange-traded product) ETP with spot Bitcoin… and I think you’re going to continue to see products like that come to market…. Demand increases your fixed supply asset. The US dollar price has to move up over time to accommodate everyone.” These products make Bitcoin more accessible to a wider range of investors, further driving demand.
Bitcoin: Still the Market Mover?
Despite the rise of exciting altcoins like Ethereum (ETH) and Solana (SOL), Pompliano firmly believes Bitcoin still dictates the rhythm of the crypto market. He asserts, “I think that Bitcoin is by far still the king. When it moves, everything else kind of moves with it… If Bitcoin goes down, other things tend to move down… That is changing a little bit, but I think it’s still true for the most part.”
This “Bitcoin dominance” isn’t just about market cap; it’s about market sentiment. Bitcoin often serves as the bellwether for the entire crypto space. When Bitcoin rallies, it often lifts other cryptocurrencies, and vice versa. While the correlation might be evolving, Bitcoin’s influence remains significant.
The Rotation Game: Bitcoin and Altcoins
Pompliano acknowledges the dynamic nature of crypto investments. He explains that investors often rotate between Bitcoin and other cryptocurrencies seeking different risk-reward profiles. “Ultimately what you see is you see some rotation going on… Sometimes you’ll see Bitcoin move up and then people will move into some of the… other cryptocurrencies, then they’ll come back into Bitcoin.”
This rotation is a natural part of market cycles. During bull markets, investors might venture into higher-risk altcoins for potentially higher returns. However, as markets become uncertain or bearish, there’s often a “flight to quality” back to Bitcoin, perceived as a safer and more established crypto asset.
Bitcoin as the “Large Cap” of Crypto
Drawing parallels with traditional financial markets, Pompliano highlights Bitcoin’s role as a “large cap” asset in the crypto world. “There’s still a market structure that’s at play here… Large caps are going to be less volatile than small caps in bull markets and in bear markets, So I think that as people push out on the risk curve during a bull market,… they kind of always come back to those less volatile assets in the bear market.”
Just like in stocks, larger, more established cryptocurrencies like Bitcoin tend to be less volatile than smaller, newer projects. This makes Bitcoin attractive to investors seeking stability, especially during market downturns. It acts as an anchor in a volatile sea of crypto assets.
In essence, Anthony Pompliano’s message is clear: Bitcoin’s fundamentals remain incredibly strong. Its profitability for holders, disciplined monetary policy, increasing institutional adoption, and role as the market’s “large cap” asset all contribute to its enduring dominance. While the crypto landscape is constantly evolving, Pompliano’s analysis suggests that Bitcoin is not just surviving; it’s poised to continue thriving as the king of crypto.
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