Opinion | Morgan Creek Founder: Bitcoin was born for the financial crisis, and volatility is its feature

According to Cryptoglobe's March 16 report, Anthony Pompliano, co-founder of cryptocurrency-focused asset management company Morgan Creek Digital Assets, talked last week about the "slump" that occurred on the financial market on March 12, the price of Bitcoin on that day It fell below $ 4,000 on some exchanges.

Anthony Pompliano: Bitcoin was born for the financial crisis, and volatility is its feature

Morgan Creek Digital Assets is a multi-strategy investment company that focuses on providing blockchain technology and digital assets to institutional clients and wealthy families. The company was co-founded by Mark Yusko and Jason Williams under Anthony Pompliano. Its parent company is Morgan Creek Capital Management, a US-based asset management company with billions of dollars in assets. "

In a weekly newsletter on February 13, Pompliano discussed Thursday's "slump."

Bitcoin opened at $ 8,000 on Thursday and fell all the way to $ 3,800. It is now trading at $ 5,600. It was incredibly violent.

Pomp states that the Bitcoin market is very different from traditional financial markets:

  • No hours
  • Deals "open all year round"
  • The market rises and falls volatile
  • Not blown

He said that although "most traditional investors" cannot cope with such "large-scale fluctuations", the current liquidity crisis is destroying the "low-volatility comfort" provided by traditional asset markets. He went on to say:

"Bitcoin traders have become accustomed to the huge market volatility, while stock investors have behaved like the end of the world."

Pompliano also means that if you look at the historical volatility of Bitcoin and the S & P 500 index, it corresponds to a 9.5% decline in the S & P 500 index and a 51% decrease in bitcoin. And the S & P 500 index fluctuated at the same level on March 12.

He also talked about the US $ 1.5 trillion “currency stimulus plan” announced by the Federal Reserve on March 12, and predicted the rate cuts to be announced this week, and the quantitative easing measures that the Federal Reserve may soon need to take:

The market believes that this monetary stimulus will not work. We already know that the market has digested the Fed's next rate cut decision. Most people believe that in the current situation, it is already a matter of course to eventually lower the interest rate to 0%. This leaves major decisions to the quantitative easing side, that is, how much money the Fed can print? "

If the market does not respond to the $ 1.5 trillion stimulus, this could be a signal that the Federal Reserve will print trillions of dollars more. The Fed has to print more banknotes to respond to the market, allowing them to face the risk of high inflation and the highest level of general hyperinflation. Pomp believes this situation is perfect for Bitcoin:

Bitcoin was born for this situation. Decentralized digital currencies will continue to do what they should do. Blocks will continue to be produced, and the world's most powerful computing network will continue to move forward. Real capitalism is happening on the free market of Bitcoin. This decentralized digital currency allows anyone to decide whether to keep their property. I am glad that we can choose this path in the coming financial crisis.

Earlier today, Pompliano referred to the Fed's $ 1.5 trillion monetary stimulus package as "emergency assistance": "The Fed is working to rescue hedge funds, banks and companies. They said they will provide unlimited liquidity. This is because they can do whatever Edit the numbers in the electronic database. Unfortunately, they have never seen the money sent to ordinary people. "