As the coronavirus pandemic continues to cover markets, Morgan Creek Digital co-founder and partner Anthony Pompliano believes that Bitcoin will benefit the most due to the confluence of various factors. In a recent Tech episode with Catalina, Pompliano shared his views on the dizzying economy and how long it will take before recovery.
He believes that government actions to revive the economy combined with halving will have a catalytic effect on the price of bitcoin, bringing it to $ 100,000 by the end of next year.
the worst is yet to come
As confirmed coronavirus cases worldwide exceed 2.4 million, countries around the world prepare for the worst. When asked about when he expects the economic recovery to begin, Pomp noted that this will not happen anytime soon until we reach a point where it is safe to leave our homes.
“This is going to be a long road to recovery, but I don't think the worst is over either. In fact, I think we are just getting started. I think this is going to get much worse before it gets better, "said Pompliano.
According to Pompliano, he will not be surprised if the shares fall in double digits from now on. Furthermore, he sees a possibility that 50% of small businesses in the United States will not survive the current crisis. So far, more than 16 million Americans have filed claims for unemployment benefits. Later this year, Pompliano sees a further increase in unemployment cases as GDP falls by 20%.
"When you start looking at those numbers, there's no way that's going to happen and then turn it back on and have a record year next year in terms of all-time highs in the stock markets or something."
Macro environment and halving will drive Bitcoin to $ 100k
Pompliano believes that bitcoin has a very binary outcome in the sense that it may become worthless or it may be worth millions of dollars per coin in the future. But, it is moving towards the # 1 cryptocurrency that is worth more than it is today.
Pompliano warned that the moderate turnaround by central banks will lead to the devaluation of fiat currencies. In particular, he cites current zero / negative interest rates and massive quantitative easing. As this happens, most people will turn to inflation hedging assets like gold and bitcoin.
Pompliano also pointed to Bitcoin's upcoming halving, where mining rewards will be cut in half, as another reason why he's bullish on bitcoin's price. This supply shock, along with investors fleeing bitcoin as a result of central bank irresponsibility, will push BTC's valuation up.
"And so, just when everyone is running out of gold, Bitcoin, real estate, and others, Bitcoin is going to have this supply shock. Fifty percent of the incoming daily supply will disappear. ”
“I think you will continue to see the same level of demand, or more likely to see an increase in demand over time. If you get that increase in demand but you get a decrease in incoming supply, the supply and demand economy takes over and you get a price increase. ”
In the event that an orange coin is worth $ 100K or more, Pomp sees that BTC will rise higher within 18 months of halving. In other words, it predicts that the top cryptocurrency should be valued at $ 100,000 at least by the end of December next year.
Binance CEO Changpeng Zhao also agrees with the thesis that the wave of money printing is bullish for Bitcoin. Late last month, Zhao noted that with billions becoming a norm in today's economy, it is not difficult to imagine bitcoin with a market capitalization. "Modest" of $ 2 billion. Such a market capitalization would put the price of bitcoin at $ 100,000.