Pompliano Says Bitcoin Volatility Shows Market Is Entering a New Phase

Bitcoin’s decline has not concerned Professional Capital Management CEO Anthony Pompliano. The volatility in recent times is actually an adjustment in the market structure, not an issue with the asset itself.

Investors were advised to stay relaxed as they go through this critical transition. These comments were made during a Saturday interview by Fox Business.

Bitcoin move lower from the all-time high of the $126,000 price level to the $80,000 price range, followed by the steady trading in the $90,000 price level, represents an important change in the price action for bitcoin. This price action indicates an increasing role for institutional investors.

Bitcoin Enters a New Ownership Cycle

This process is reminiscent of an “IPO moment,” where control is transferred from high-volatility initial holders to those seeking a steadier pace of progress. The short-term process is adjusted according to changes in ownership.

He also said that there has been a decrease in Bitcoin’s volatility level over several cycles. While it was recorded that Bitcoin’s volatility level was about 80, it has since dropped to about 40.

He also explained that reduced volatility makes Bitcoin an appropriate fit for traditional portfolios. There are some traders who respond to the shift by looking for assets that have a higher short-term risk profile.

On Sunday, January 25, Bitcoin (BTC) was trading at $88,408, with a decline of 3.16% in the last 24 hours. The retail investors’ sentiment remained in the bearish zone in the latest trading session. The discussion around the cryptocurrency market remained stable with no increased activity.

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Pompliano also talked about Strategy, or MSTR. Pompliano described it as a leveraged exposure to Bitcoin and encouraged people to think about it in that way.

Strategy Maintains Long-Term BTC Plan

As explained by Pompliano, the Strategy increases the returns of BTC during its rallies and increases the depths of the pullbacks in the Bitcoin market. According to him, this is because of the accumulation strategy.

However, he did deny claims of balance sheet pressure for Strategy, which are a result of the firm buying BTC. He said critics are usually concerned with the short-term direction of the asset prices. 

He said the long-term perspective of Strategy is consistent with the firm’s overall strategy. He did not, however, make any changes to the firm’s outlook.

Strategy (MSTR) closed trading at $163.11 last Sunday. There were no significant changes in after-hours trading. Sentiment around MSTR remained in the “bearish” category as investors monitored volatility in the market.

“Ultimately, crypto and traditional finance are going to converge into a single financial industry.” He added that this would be a key feature of financial development over the next decade.

Also Read: Strategy Buys 22,305 BTC After $2.13B Spend and Signals More Buying