As the coronavirus pandemic continues overcasting the markets, the co-founder and partner at Morgan Creek Digital Anthony Pompliano believes bitcoin stands to benefit most due to a confluence of several factors. In a recent episode of Tech with Catalina, Pompliano shared his views on the whipsawed economy and how long it will take before recovery.
He believes the governments’ actions to revive the economy combined with the halving will have a catalytic effect on the bitcoin price, pushing it to $100,000 by the end of next year.
The Worst Is Yet To Come
As worldwide confirmed coronavirus cases surge past 2.4 million, countries around the world are bracing for the worst. When asked about when he expects the economic recovery to begin, Pomp noted that this is not going to happen anytime soon until we get to a point where it is safe to leave our homes.
“This is going to be a long road to recovery but I also don’t think the worst is over yet,” said Pompliano. “I actually think that we’re just starting. I think this is going to get a lot worse before it gets better.”
Per Pompliano, he won’t be surprised if equities fall by double-digits from now. Also, he sees a chance of 50% of the small businesses in the United States not surviving the ongoing crisis. More than 16 million Americans have filed claims for unemployment benefits so far. By the end of this year, Pompliano sees a further increase in cases of unemployment as the GDP shrinks by 20%.
“When you start seeing those numbers, there’s no way that you just have that happen and then turn it back on and have a record year next year in terms of all-time highs in the stock markets or anything like that.”
The Macro-Environment And Halving To Push Bitcoin To $100k
Pompliano believes bitcoin has a very binary outcome in that it can either become worthless or it can be worth millions of dollars per coin in the future. But, he is edging toward the OG cryptocurrency being worth more than it is today.
Pompliano avered that the dovish turn by central banks will lead to the devaluation of fiat currencies. In particular, he cites the current zero/negative interest rates and massive quantitative easing. As this happens, most people will turn to inflation hedge assets like gold and bitcoin.
Pompliano also noted the upcoming halving -where mining rewards will be cut in half- as another reason why he is bullish on the price of bitcoin. This supply shock coupled with investors fleeing to bitcoin as a result of the central banks’ irresponsibility will propel BTC’s valuation upwards.
“And so, right when everyone is running to gold, Bitcoin, real estate and others, Bitcoin’s going to have this supply shock. Fifty percent of the incoming daily supply will disappear.”
He added:
“I think you’ll continue to see kind of the same level of demand, or more likely you’re going to see an increase in demand over time. If you get that increase in demand but you get a decrease in incoming supply, supply-demand economics take over and you get an increase in price.”
In the case where one orange coin is worth $100K or more, Pomp sees BTC climbing higher within 18 months after the halving. In other words, he predicts that the top cryptocurrency should be valued at $100,000 at least by the end of December next year.
Binance CEO Changpeng Zhao also agrees with the thesis that the money printing spree is bullish for bitcoin. Late last month, Zhao observed that with trillions becoming a norm in the economy today, it’s not hard to imagine bitcoin with a “modest” market capitalization of $2 trillion. Such a market cap would put the price of bitcoin at $100,000.
