The bear’s attacks have left Bitcoin [BTC] gasping for air barely above the $4000 mark. However, many experts in the field expect the price to correct further, owing to the fundamentals of Bitcoin’s market cycle. One of them is Anthony Pompliano, the founder of Morgan Creek Digital, who recently appeared on CNN to speak about the price performance of Bitcoin.
He began by saying that there was a lot of focus on the price by many individuals in the space, emphasizing that the important thing was to remember that the “fundamentals haven’t changed”. This was backed up by Pompliano, as he referred to the technicals and historical analysis to predict that the bear market was going to get deeper.
Stating that this has been seen in the past, he set his price call for around $3000-$3500 for Bitcoin, adding that it shouldn’t come as a surprise if that occurs. However, he also stated that the price movement does not change the historical or long-term outlooks. He went on to state:
“We have very deep conviction on a long term basis. And if you look at the fundamentals, on a 24 hour basis on the Bitcoin networks, that’s about $4.6 billion as of lately. The market cap is $74 billion so that’s a 16x multiple in transaction volume for market cap. That’s very similar to Mastercard that does about $11 billion worth of transactions and is valued at about $180 bn. From a value perspective it’s up there with Mastercard.”
Pompliano did mention that Bitcoin was a nascent technology, as it is only 10 years old. Notwithstanding this, over these last 10 years, Bitcoin has outperformed stocks, bonds, currencies, and commodities, he stated. He went on to say:
“We tend to think that the public equity outlook over the next 10 years is bleak, anywhere between -3% and -3% but we think cryptos can have multiples of that. We have that long term outlook based on positive sentiment.”
He further stated that there was a multitude of ways to value cryptocurrencies, with his firm looking at transaction volume mainly. This translates to the volume of activity on the network, as evidenced by his comparison to Mastercard. Moreover, he pointed out that the price movement is driven majorly by retail investors, with institutional investors not entering the market prior to the bull run of 2017. However, he painted a positive picture for the future of the cryptocurrency market, stating:
“We tend to think that the work today is going to lay the groundwork for price movement moving forward over the next 2-3 years until we see the Fidelty’s and Bakkts coming into the space. We tend to think that that’s really strong fundamental movement or foundation building that will pay off in the next 2-3 years.”
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