The Pomp Podcast - #1446 Anthony Pompliano | Bitcoin Is Having A Monster Month!

Starting point is 00:00:00 What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat

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Starting point is 00:02:37 Bitcoin just finished a banner month. It's up 40% in the month of November, and the S&P 500 just clocked the best performance of any month in 2024. Now, if we go back and we look over the last year, Bitcoin is up 156% and it's up 130% year to date. These are monster numbers for the digital asset. But it's also the stock market has been going up and up and up. And ultimately, it's because I believe two things are happening. The first is that the Federal Reserve is in control of the market. They previously hiked interest rates higher and faster than we had seen in a long time.

Starting point is 00:03:12 They went from 0% interest rates to 5.5%, and they crashed asset prices. Remember, Bitcoin went down all the way to $16,000. The stock market also crashed. Tech stocks were down 70%, 80%. But then investors realized that the stock market has to go up. Bitcoin has to go up over the long run. And we saw us hit all-time highs, even though interest rates were still at 5.5%. But Jerome Powell, he is in a regime change.

Starting point is 00:03:41 All of a sudden, he hit us with a 50 basis point interest rate cut, then another 25 basis points, and it is expected to get one final 25 basis point cut in December. That'll be 100 basis points cut off of the Fed's interest rate, and that is good for investment assets. But simultaneous to the interest rate cuts and a return to cheaper capital, we also see M2 money supply expanding. There's liquidity coming into the market, but that's just the domestic story. If we go and we look internationally, places like China and other major economies, they also are flooding their economies with cheap capital. And so anytime that you get more capital and cheaper capital coming into a market, investors say risk on and start allocating. We've seen them going into stocks and into things like Bitcoin, and those assets continue to go up. But simultaneous to the regime change that we are watching play out in the monetary policy, we also are seeing Donald Trump storm in and say, I am the new administration.

Starting point is 00:04:42 I am being sent to Washington with a mandate. That mandate is to go ahead and build housing, get homes to be more affordable, to secure the border, not to enter into new wars, to go ahead and get inflation under control, and to help the American families be in a better position than they were just a couple years ago. That mandate is incredibly important because simultaneous to all of those things, which usually would lead to increased spending in order to stimulate the economy and stimulate investment assets. Donald Trump and his administration are also promising to cut government spending. If you go online, you look at Vivek Ramaswamy and Elon Musk, they're tweeting all kinds of insane government stats. Did you know that there's more than 7,500 vacant government buildings? Did you know that the United States government owns more than 20% of the land in the U.S.? Did you know that some different organizations in the government only go into the office

Starting point is 00:05:37 one time per month? And did you know that there's been an explosion of these government jobs, yet efficiency has actually gone down? All of those things are going to be solved, allegedly, by the Department of Government Efficiency. This organization is really unique because I see tons of my smartest friends all saying, That now is a high-status job. I used to joke all the time and say none of my smartest friends work in the government.

Starting point is 00:06:02 But I can no longer say that because so many of the people that I know, both entrepreneurs and investors, they want to go work for Doge and they want to right-size this ship. And so if Donald Trump and his administration are going to be able to stimulate the economy while also cutting spending, that will have a profound impact. And you will get a ton of asset prices going higher and higher and higher. I continue to say that if you put a president into the White House who measures the economic health of the country by where the stock market is, then I can promise you that the stock market is going higher. Donald Trump only has four years, and so he can throw the kitchen sink to make sure that asset prices end up higher than when he came into office.

Starting point is 00:06:42 Bitcoin not only is going to benefit from that, but I also see that Bitcoin is going to benefit from the Bitcoin Strategic Reserve. There's a lot of rumors and there's a lot of opinions being thrown around. But I don't think that the United States necessarily has to go buy more Bitcoin. If the United States simply says we have 200,000 Bitcoin today in our possession and we are committing to not sell them, we're going to set up a Bitcoin strategic reserve. And this is important to our country and our future. I believe many other countries and sovereign wealth funds around the world will also set

Starting point is 00:07:11 up strategic reserves for Bitcoin. If these large pools of capital begin to buy Bitcoin at the same time that we get cheap capital flooding into the market and we have an administration that is going to stimulate the economy and cut government spending, that is going to be very, very good for the stock market and for Bitcoin. And so even though there's all kinds of different predictions about what's going to happen in the stock market or in assets like Bitcoin, I actually think we could be underestimating the bull market that we are in. Now, what does that mean? If you go and you look at all of the different research shops, they've come out. Many of them think that the stock

Starting point is 00:07:46 market's going to go up 8%, 10%, 12% next year. But we've had a couple of banner years. Look at the stock market in 2024. The NASDAQ was up 50% in 2023. We've entered a new regime of investing. Volatility is the name of the game, and people drastically underestimate how high some of these things can go. And so Bitcoin is no different. I think that the traditional investors, the traditional research houses, they're likely underestimating what Bitcoin can do. But the hardcore Bitcoiners and crypto enthusiasts, they are actually overestimating what Bitcoin can do. And so finding that middle ground is really important. And so when I look out at the market, what I see to myself is that if you are a saver, you will be a loser. You are going to lose

Starting point is 00:08:32 purchasing power because they're going to continue to devalue the dollar. They have no other choice. We have $36 trillion of debt, and there is no end in sight. I do not think that we can get to a balanced budget no matter how hard we try. And so, therefore, we have to devalue the currency in order to monetize that debt. Now, simultaneous to that happening and asset prices continuing to go up, I do believe that investors are going to have to make a hard choice. Do you go and put a majority of your wealth in this new financial system? or do you simply go and put it into the try

Starting point is 00:09:06 and true investments like the S&P 500 and NASDAQ? The short answer is that most people I know, they're doing both. They're putting a larger percent of their portfolio into Bitcoin than maybe the Wall Street investors would expect, but more so than the hardcore Bitcoin maximalists, these investors also still have some traditional assets.

Starting point is 00:09:26 They have real estate, they have commodities, they have stock indexes, et cetera. Ultimately, the extremes are always where the most risk lies. If you have 100% of your wealth in Bitcoin and you have to live through 80% drawdowns, that doesn't feel good. If at the same time you have 100% of your wealth in a stock index and you are watching other assets go up faster, then you are underperforming and that doesn't feel good either. And so ultimately where I see the world going is that you're going to get a conversion of

Starting point is 00:09:57 this new digital financial system and these new digital financial assets with the legacy system. We can see Wall Street trying to put this stuff together, and that's going to be a great tailwind for Bitcoin. Now, in 2025, here's one of the things that I think is most important to pay attention to. I think there's a ton of opportunity in public companies related to Bitcoin and crypto. That's why I personally am spending so much time in that sector. Because those public market companies have exposure to the underlying spot assets, whether it's Bitcoin or Solana or any other asset, they likely are going to outperform their peers. But these are cash flow driving businesses. It's no different than Warren Buffett saying, hey, I don't buy gold. But sometimes he

Starting point is 00:10:40 may look at gold miners. They have cash flow, but they aren't those underlying spot assets. And so the future of investing, in my opinion, is understanding these digital assets, but also going and finding companies that can drive cashflow and profitability by dealing in them. There's a couple of public companies that I'm currently involved with that I think are doing a good job, but there's many others that exist as well. Ultimately, investing is a really hard game. You have to figure out where to put your assets in terms of buying, and then you've got to be really, really good at sitting and doing nothing for a long period of time. And then I would argue that selling is actually harder than buying because selling is so many different

Starting point is 00:11:20 unknowns and there's always the seller's regret if the asset price keeps going up. And so there's some assets like Amazon or Berkshire, if you were to ask yourself what was the best time to sell them, the answer is never. But if you ask yourself about other assets, there was great times to sell them. And if you miss those windows, you've actually suffered. And so we're going into this new regime. There's quantitative easing on the way. Donald Trump is coming into office and he has policies that he thinks will help the economy and financial assets. And then people around the world and different central banks are also going to help contribute. Asset prices are going higher. All of the doomsayers and the recession predictors back from the summer, they've been wrong. And I

Starting point is 00:12:02 expect that the United States will continue to be strong. The United States will continue to prosper. Financial assets will go up into the right for a long period of time because the dollar is going to be devalued. And anyone that is holding Bitcoin is going to do pretty well. One of my favorite statistics is that the median home in America used to be about $280,000. Today, it's around $430,000, just eight years later. 2016 to 2024, we saw that same home be worth $664 Bitcoin in 2016. Today, it is worth six Bitcoin. And so any time that you get a 99% reduction in the cost of a home by pricing the home in Bitcoin, that tells you that something is working. And so those that hold dollars will watch everything around them get more expensive. Those that hold

Starting point is 00:12:49 Bitcoin watch everything around them get less expensive over time. You just have to be able to swallow all that volatility and you got to have a strong stomach. Ultimately, one of the last things that I think is important for investors who are watching this is that we now have access to the internet and we have access to each other. There's been a rise of the self-directed investor because ultimately people now are able to go get the information for themselves. Things like Twitter and X or various other outlets. You can go and learn for yourself. You should self-educate as if your future depends on it because it does. But simultaneous to that explosion of access to information, we also now see a massive reduction in the friction for you to go

Starting point is 00:13:30 and allocate directly to the market. It used to be that you had to call up a financial advisor or stockbroker and they would execute trades for you. Now you have different apps like Robinhood, Public and others, but also you have different crypto specific apps, things like Coinbase and others that will allow you to directly allocate your capital. No one is coming to save you. You are responsible for your decisions. Go out, find the information, do the work, get educated, and then go and make sure that you make decisions that you're comfortable with.

Starting point is 00:14:00 Ultimately, those that succeed in the future is going to be because of the decisions they made. And those that do not end up prospering, it's gonna be because of the decisions they made. Stop spending your time doing all kinds of nonsense. Instead, focus on the things that are most important. And remember that if you are able to buy great assets and hold them for a long time,

Starting point is 00:14:21 everything in your life will end up being okay. Hope you guys are all having a great weekend. Make sure that you're subscribed to the channel, like this video, and I'll see you guys next time.

The Pomp Podcast - #1446 Anthony Pompliano | Bitcoin Is Having A Monster Month!

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