Anthony Pompliano: Bitcoin Ready for Gains as Interest Rates Fall and Liquidity Grows

Anthony Pompliano Bitcoin fed rate cut

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Hongji Feng

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Hongji Feng

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Hongji is a crypto and tech reporter. He graduated from Northwestern University's Medill School of Journalism with a Bachelor's and a Master's. He has previously interned at HTX (Huobi Global),...

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September 25, 2024

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Anthony Pompliano believes Bitcoin could benefit greatly as interest rates decline and global liquidity increases.

In a recent TV interview with CNBC, Professional Capital Management founder and CEO Anthony Pompliano highlighted that Bitcoin’s price movements are closely tied to shifts in global liquidity, as it outperformed other assets post-rate cut.

Is BTC the Best Asset Post Rate Cut?

He noted that with central banks, including the Federal Reserve, signaling a shift towards monetary easing, Bitcoin could see substantial gains as more capital flows into the market in the coming months.

Pompliano mentioned a new study that discovered Bitcoin as the most sensitive asset regarding global liquidity.

“And so 83 percent of the time, Bitcoin moves with global liquidity. It’s more than S&P or any other asset,” he said.

He elaborated that Bitcoin’s performance is not only influenced by interest rate changes but also by broader monetary policies globally. Recent liquidity injections from various central banks, including those in China, could have created a favorable environment for the digital asset.

“Bitcoin ends up being a big winner whenever we get kind of cheap money flooding into the system,” stated Pompliano.

He also touched on the role of institutional investments, noting that the recent inflow of capital through various channels, including exchange-traded funds (ETFs), has contributed to Bitcoin’s price movement.

However, Pompliana acknowledged that it would be challenging to quantify how much of the recent surge is driven by long-term holders versus short-term traders.

How is Bitcoin Different from Ethereum & Solana

Pompliano mentioned that he sold all his Ethereum holdings last year and shifted to Solana, citing the latter’s efficiency and lower transaction costs as key advantages. He believes Solana’s network could perform better financially in certain use cases.

“Ethereum for me… I sold all the Ethereum and I bought Solana instead,” he said. “I thought that asset and that network is just cheaper, it’s faster. It’s going to probably do better financially.”

He also differentiated between monetary assets like Bitcoin and stablecoins and technological platforms like Ethereum and Solana, highlighting that each serves distinct roles in the crypto ecosystem.