The Pomp Podcast - #1487 Anthony Pompliano | What’s Going On With Bitcoin?

Episode Date: February 17, 2025

Anthony Pompliano records a solo on everything bitcoin. Topics include why the price has been sideways, words of caution, rise of memecoins, nation state adoption, bitcoin strategic reserve, companies that are buying bitcoin, Trump administration embracing bitcoin, and where bitcoin goes up from. =======================Today’s episode is brought to you by ExpressVPN, rated #1 by top tech reviewers like CNET and The Verge. Without ExpressVPN, third parties can still see every website you visit, even in Incognito Mode. ExpressVPN is an easy to use VPN service that works on all devices hiding your IP address. Get an extra four months free and protect your online privacy TODAY by visiting https://expressvpn.com/pomp=======================Ledger has been trusted for 10 years to secure 20% of the world’s digital assets. Their latest devices, Ledger Stax and Ledger Flex, feature secure touchscreens for safer, easier crypto management. Go to ledgerpomp.com to take control of your digital future=======================Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/=======================View 10k+ open startup jobs:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

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

any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Today's episode is brought to you by ExpressVPN. Have you ever browsed in incognito mode? Well, it's probably not as incognito as you thought. Google recently settled a $5 billion lawsuit after being accused of secretly tracking users in incognito mode.

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Protect your online privacy today by visiting expressvpn.com slash pomp. That's E-X-P-R-E-S-S-V-P-N dot com slash pomp. And you can get an extra four months for free. Expressvpn.com slash pomp. Go check them out today. Today's episode is brought to you by Ledger. They're celebrating 10 years as the most trusted name in crypto security. With over 7 million users and 20% of the world's digital assets secured, Ledger continues to lead the way in protecting your crypto and digital ownership.

Their latest devices, Ledger Stacks and Ledger Flex, feature the world's first secure touchscreens, making managing your assets easier and safer than ever. Plus, the new Ledger Security Key app offers a secure alternative to traditional passwords, enhancing your digital security. Go to ledgerpomp.com to take control of your digital future. That's LedgerPomp.com. L-E-D-G-E-R-Pomp.com. milestone. Everyone was super excited about it. And obviously, Bitcoiners felt like they had been on this redemption curve. They were right. All the critics were wrong. Bitcoin at 100K felt like a psychological moment. But now Bitcoin has kind of gone sideways. It went up to 109,000. It dropped to 92. It's gone back over 100. It dropped back below 100. It's kind of sitting around 95 to

$100,000. And I see a lot of Bitcoiners getting bored. I see them starting to get antsy. They're worried? Is the bull market over? What's going on? Everyone calm down, take a deep breath. But here's my word of caution, is that a lot of the activity we're seeing in meme coins and elsewhere, this is short-term speculation. This is people saying, I don't want to think long-term. There's a void of focus and discipline. And so I'm going to go play in meme coin land, or I'm going to go play in these other assets. Instead, you got to stay focused. And one of the things that I think people don't give enough credit for is, It's not just how early you find Bitcoin or how early you bought Bitcoin.

It is how consistent or how hard you press your conviction. This is true of all assets. So if you go and you find a great stock and you think that if I buy it today, it's going to go up, that's great, but you may only have so much money. And so you go and you buy it. But if you never buy another share, then you're only limited to what that initial purchase was. Obviously, if you've got conviction and you continue to buy the stock and your dollar

cost averaging into the stock, you're likely to end up with way more shares. And even if the stock price was going up, because you have so many shares, then that price appreciation ends up helping you make more money. So your first dollar, let's say you made 10x, your second dollar, you made nine and a half x, your third dollar, you only made 9x. 9x is still pretty good. And continue down that trend, right? Doubling down, tripling down, pressing your winners is really important. I remember one time I asked Mark Yusko, who was an LP and a bunch of great investors funds. I said, what separates the top 1% from the top 20%? And he said to me, it's very simple. The best investors in the world, they press their winners harder than anyone else,

and they sell their losers faster than anyone else. Press your winners, sell your losers. And so naturally, Bitcoin is a great example of this. Many of the people I know who have accumulated an immense amount of Bitcoin, yes, some of them found Bitcoin in 2010, but they continued to acquire more Bitcoin. Others found Bitcoin in 2020. Look at MicroStrategy. Literally, 2020 was their first purchase. They now have almost 2% of the total supply.

And so why is it? It's pressing your winners. Conviction, continuing to accumulate. Now, that doesn't mean that you go do something undisciplined or you lose emotional control. It just means that you can't get lulled to sleep. You can't get sidetracked. And so being able to understand what is Bitcoin,

has the thesis changed? why is the price going sideways? Everyone relax, take a deep breath. It's going to be fine. Dollar cost averaging is usually your friend in any great asset, not just Bitcoin. Now, on top of that, I see a lot of people talking about nation state adoption. And so that should get you excited. Even though the price is going sideways, nation states are doing all this stuff. My current expectation with about 95% confidence is that the Bitcoin strategic reserve will be Bitcoin only. It will happen. And I think that the Bitcoin strategic reserve will not only to be holding the Bitcoin that we currently have in the United States, but also buying more Bitcoin.

And so if you get those three things, Bitcoin only, you do get the reserve, and we're going to be buying more Bitcoin. I think that is going to bring an immense amount of interest from other countries around the world. Now let's go around the world and take a look at this. El Salvador buying Bitcoin. We know that Bhutan, they've been mining and they hold a bunch of Bitcoin. We also know that Russia, they've come out publicly said that they're mining Bitcoin, that they're using it for bilateral transactions. We've recently seen a number of central banks start talking about, should we go and buy Bitcoin? We saw even, let's say, Norges Bank, the large sovereign wealth fund. They are actually buying equity. They own, I think,

MicroStrategy. They own MetaPlanet and many others. And so people are trying to get this Bitcoin exposure in a variety of different ways. On top of that, we recently saw that the Abu Dhabi sovereign wealth fund, they actually have bought about $500 million, just slightly less of the Bitcoin ETFs. So what this begs is some of them are going to go and they're going to buy Bitcoin, spot market, take custody of the Bitcoin. El Salvador is taking custody of their Bitcoin. Other countries are going and they're going to mine, named a couple of those. But then some countries are going to say, I just want price exposure. You know, I've got sovereign wealth fund or I've got some sort of balance sheet. I want to be able to invest capital, have exposure

to Bitcoin. And I don't care so much about the sovereignty of holding the asset. I just care about the individual ownership of the kind of price action. So ETS provided a great solution there. Now, interestingly enough, it's not just nation states. We also saw at the state level, the Wisconsin Investment Board, they came out recently and they actually upped their ownership or shares in the ETF. They're doubling down, right? They're conviction. They're continuing to pour more money into this. And they're close to about 1% allocation of the Bitcoin ETF, which is pretty impressive. Now, if you go and you take a look, I also saw recently that somebody on Twitter came out and they said that they are actually going to take their Bitcoin or they

already had taken their Bitcoin, they converted it to ETFs. I found this fascinating. Should you hold Bitcoin? Or should you buy the ETF? Should you actually take self custody? Or should you get price exposure? And the truth is that each solution is potentially valuable for different people. We've talked about countries that are buying the ETFs because they just want the price exposure. Well, there's a lot of people who say, you know what, I want to buy Bitcoin, but I don't want to leave it on an exchange. I've been convinced that that's actually a bad thing. but also I don't have a lot of confidence that the Bitcoin that is actually being held in self custody, that one, I know what I'm doing or two, that I'm going to be able to secure it better than

let's say a third party custodian. And so naturally you're going to start to see some people say, you know what, rather than hold Bitcoin, I'm going to hold the ETF. I can hold it in my brokerage account. It's secure. I don't have to worry about somebody stealing it from me, et cetera. And so these are the things that happen when an asset gets financialized. It used to be Bitcoin was one thing. You could buy spot Bitcoin, hold it long only. There was no way to short it. There was no way to do anything. Obviously that evolved. Eventually there was shorting. Then there was kind of other exchanges that got created and there's derivatives that were introduced. Now there's these ETF wrappers. There's companies that hold Bitcoin. All this

stuff continues to kind of evolve. And the way that I look at this is individuals should be able to do whatever they want with their money. There are pros and cons. There's trade-offs to every decision, but people's situations are different as well. And so some are going to need the sovereignty of Bitcoin. If you're somewhere in the world where you're worried about people seizing your bank account or censoring your payments, then holding Bitcoin is a great idea. If you're somewhere in the world and you're worried about there being a debt default or some sort of bubble popping or your government kind of losing the confidence and trust as an institution, holding Bitcoin in self-custody would be pretty important.

But there's a lot of people who say, I'm not worried about those things. I actually just want price exposure to this asset. They're going to go and they're going to buy the ETF. Yeah. Rather than judge people, I think it's really hard to make a kind of pass or an analysis on what other people do because you don't know their situation. You don't know what the risk profile is. You don't know if maybe there's security concerns. You don't know if maybe there's actually a need for self-custody. All those things really play into this decision. So that's kind of a big trend that we're going to see here. Now, that brings me to a lot of these companies. We know similar scientific, MetaPlanet, MicroStrategy, DeFi Technologies,

HUD 8, Riot, Marathon. All these guys own Bitcoin on their balance sheet. And when you go and you look at these businesses, what I believe is MetaPlanet is a great example of. MetaPlanet was the best performing stock in 2024, globally. There's tens of thousands of stocks in all the different stock markets. MetaPlanet outperformed them all.

I think it's up something like 3,200% approximately. That is incredible performance in a given year. And what they did is they took an old hotel company. They basically said, we're going to get rid of any hotels other than one. And then we're going to plug the company and the balance sheet into the Bitcoin network. And it's worked out really well. They continue to acquire more Bitcoin. They also happen to benefit from the fact that they are in Japan. Japan and the US dollar, there's some interesting currency arbitrage stuff that goes on there.

You can go back and look at Warren Buffett, for example, was buying a lot of financial service companies there. And again, there was some macroeconomic stuff at play. But really, MetaPlanet has very quickly figured out how do you plug your company into the Bitcoin network. And naturally, it's the most traded stock in Japan, best performing stock globally. Anytime that you see performance, people are going to chase it. And so that leads to more and more capital flows. As you get more capital flows, there's more liquidity. More liquidity means you have more capital market options at your availability. And so whether you're going to sell equity, more like kind of ATM type stuff, if you're going to issue convertible debt,

if you are going to issue preferred securities or preferred debt. There's all kinds of things you can do. You can even, for example, sell options against the Bitcoin to drive cash flow. That cash flow is then used to convert to more Bitcoin. Every single one of these options is now being analyzed and evaluated by all these publicly traded companies that are trying to figure out what do we do with the Bitcoin. Now, on top of that, if that wasn't enough to be bullish on us,

now that we've got public companies and we've got financial institutions doing this, We also see that the current administration, David Sachs, he's the crypto and AI czar. We see a number of other people who either own Bitcoin or are supportive of Bitcoin. They're all talking positively about this. You even saw Cancer Fitzgerald. They came out and they actually significantly increased their ownership of microstrategy. What do they know? Why are they all doing this?

Why is it that everyone who's focused on Bitcoin is buying for the most part? They must know something. But it's retail that's kind of getting lulled to sleep as we go sideways here. And so what this really tells me is that there's a bifurcation of both conviction and information in the market. Now, what do I mean by that? It means that there are some people who are short term oriented. They're simply looking at what is the daily price? What else is going on in the market? What's the shiny new thing? That's where their information bucket is. They're filling it with as much shiny things as possible. Then there's a whole nother bucket of people who are long-term information oriented. They're thinking about what is the price today? What do I think the price is going to be in five or 10 years? What do I think is the true value of a decentralized digital asset that provides sovereignty and

censorship resistant to anyone in the world that wants to protect their economic value? That is a long-term thinker. That's a very different information source than the people who are short-term oriented and just looking at what the latest shiny thing is. And so what that leads me to is right now is actually some of the most interesting times of Bitcoin. Now, why is it interesting to me? It's interesting whenever a lot of people start to get bearish or they start to get

lulled to sleep because usually what I have seen in my time in evaluating this asset and paying attention and holding it is that that is the moment when we start to get to a point where then Bitcoin will erupt in either direction. People are lulled to sleep. They don't think anything's going to happen and bam, we go in either direction. Now, it could be down or it could be up. In this case, I actually think one of the best indicators as to why the price likely goes up rather than down is that we have seen an incredible persistent bid in the market every time

Bitcoin has gone to correct. If you go back to 2017, and in 2020, 2021, every time we had these bull markets, Bitcoin would correct 30% or more a couple of times during the cycle. So obviously, in 2017, there was like five or six different corrections of 30% or more. In 2021, we actually saw a 50% correction after a 50% correction in 2020. So COVID, 50% correction in a single day for Bitcoin. And then in May of 2021, we saw that there was a 50% correction after the China ban of Bitcoin mining. And so you had two 50% corrections in two years. Crazy. Most assets, you could never go through that. But what have we seen so far? We have gotten some 15% drawdowns. We've gotten some, you know, what I would say, definitely drawdowns, but they're not 30%. They're not 40,

50%. And so what that means is as Bitcoin is trying to cool off and correct, which is very healthy in a bull market, there's actually such a persistent bid. There's so many people that want to buy Bitcoin, that what you're seeing is you're seeing people step in almost immediately and say, hey, I'm not going to let it fall below some price. Doesn't mean it can't happen. Doesn't mean that it can't continue to go down before it goes back up. But it does signal that there is a very healthy demand for Bitcoin. And I think that's where you see the price having gone up so much. Like anytime an asset goes from $40,000 to $100,000 in 12 months, it's got to cool off a little bit. It's hot. It's very hot. So let the thing go ahead and cool off. Let it go sideways.

Don't be lulled to sleep. It will eventually be just fine. Now, why am I bullish? Well, obviously there's lulling. Two, we've got the administration that is very pro-Bitcoin. Three, I think, is that Bitcoin is transitioning from something that the mainstream media used to critique and attack and say, hey, this is stupid. These guys and girls are all going to destroy capital, et cetera. Now, mainstream media seems pretty interested. They're not full on bulls. They're not going to go out and write articles about Bitcoin is the greatest thing since sliced bread. But I do think that they have now transitioned from a negative viewpoint to maybe a cautiously optimistic viewpoint.

Hey, these people might be onto something. this may work this thing may actually end up being what these people said it was going to be i see the government talking about it i remember they were saying that in the early 2010s that the government was going to eventually like bitcoin it wasn't going to ban bitcoin the best results and the best track record is winning and that's right now what bitcoin's been doing bitcoin has been fulfilling the prophecy that it came from many of the early bitcoiners so the media is now having to say well look the results speak for themselves i got to pay attention to this thing. And so that is a huge kind of green flag, very bullish, is that now

some of the most ardent critics, they're softening. It doesn't mean that they're going to become fans, but they're just softening, which is very important. On top of that, if you go ahead and you take a look, Bitcoin still, one out of every two Bitcoin in circulation has not moved in two years. Very important. Bitcoiners are not selling. And so whenever you have a finite supply with a constricted circulating supply and that illiquidity, and then you get increased demand, it's gangbusters. And so what I think is the single most important thing for Bitcoin right now is the strategic Bitcoin reserve. If we get the strategic Bitcoin reserve, we go much higher very quickly. I also think that what you are going to see is the full penetration of Bitcoin into

many countries, maybe not all, but many countries, balance sheet or sovereign wealth funds if the United States does it. Why? Go back to 2020. If you remember, Paul Tudor Jones, Stanley Druckenmiller came out and they said that they owned Bitcoin. When they said that they owned Bitcoin, what we saw was that a ton of other people on Wall Street said, well, it's good enough for the goats. It's good enough for me. Well, America is the goat of countries when it comes to finances. They are seen as the leader. They are able to issue U.S. treasuries, the dollars, the global reserve currency. U.S. has the greatest capital markets, the most liquidity, the most popularity, etc. And so if the United States decides that they're going to do it, other countries, they're going to

say, hey, we might want to get on this train as well. And so naturally, the game theory plays out. I do think the United States will do it and other countries will follow. If you have a finite supply with a constricted circulating supply and demand a country level liquidity starts to come into the market, you should expect a much higher price point. Now, how high is that? Is that $120,000, $150,000, $200,000? I don't know. That's for you all to decide.

You guys are all smarter than me. But I do think that we get a much higher price. And so to me, that's the single most important thing is Bitcoin will have officially climbed all the way up the hill of critics if the United States embraces it. And so what's fascinating to me is the backdrop of all this is gold is also going up. Gold has been up 50% year over year. It's about to hit $3,000. That's crazy. Gold, which is usually seen as something that is not that volatile, it's up 50%. Now, why is that important? Well, the government data from the Bureau of Labor Statistics is telling you that inflation is 3%, 3% year over year for January.

So from 2024 to 2025, January to January, inflation was 3%. Do you believe that? I don't know. I don't. Why? Well, the money supply grew 5% in 2024. So if inflation is only 3%, but the money supply grew 5%, those two numbers don't add up. Then if you add in the fact that stock market was up 25%, Bitcoin was up 100%, gold was up 50%.

Why did gold get more valuable? What happened? It's not like the gold bar changed. It's not like some chemist figured out some unique element that they introduced to the gold that made it more valuable. 50%, it's probably a lot of people who are worried about inflation and other kind of chaotic, uncertain events. They're driving more demand for gold.

And it went up 50% in 12 months. These are the types of things you got to pay attention to is you can't be kind of siloed, laser focused, only looking at Bitcoin. Bitcoin operates within a global financial system. And if you're a long-term holder of Bitcoin, You can simply just continue to dollar cost average, accumulate as much Bitcoin as possible. But you got to pay attention. You got to look at these other things.

Gold goes up 50%. What's interesting about that is that gold usually leads Bitcoin. When gold goes up, Bitcoin goes up slightly a little bit later. Why? They're many of the same drivers. Why are people buying it? Both of them are outside the system. Both of them are sound money principles.

Neither one of them can be actually printed by somebody else. Anytime you get this kind of asset outside of the system, sound money principles, they are very related in what the drivers of liquidity for them are. So if gold went up 50%, Bitcoin went up 100%, gold has continued to run while Bitcoin's been going sideways. I think those two trends will come back in kind of harmony and you'll see Bitcoin's price go up. So those are some of the things I'm thinking about Bitcoin right now. Before I let you go, very important, next week, February 24th through the 28th, I am holding Bitcoin Investor Week. That's right, an entire week. We start Monday night kickoff party. If you know me, kickoff parties, they're fun. You're

going to want to be there. But then Tuesday, Wednesday, Thursday, Friday, we've got a bunch of programming for people. You can go, you can get general admission tickets. They're cheap. They're like 300 bucks. I put together the whole thing, keep it low price so you guys can all come enjoy, learn from folks. There's also VIP and super VIP tickets, super VIPs. I've been working hard for them. I got private tours of the Morgan library. I got all kinds of things I've been organize them for them. But go check that out. I've included a link in the description. And then speakers. Speakers are the most important part, right? We got Vivek Ramaswamy. We got Senator Cynthia Lummis. We got Mike Novogratz, Anthony Scaramucci, Jan Van Eck, Jack Maulers.

We got a whole host of people. It's incredible. There's like 40 speakers or something, some crazy number of speakers that are coming. And we've done our best job that we possibly can to get as many people there that we think have something unique to provide to folks. So I'm super excited about it. Bitcoin Investor Week. It's called a week because literally a week going Monday night to Friday night. Hope that you guys can all make it. Go check out the link in the description. February 24th to 28th in New York City. All right. That's it for today. I will talk to you guys all tomorrow.