Bitcoin’s Sharp Drawdowns Are Healthy and Expected: Pompliano

Institutional investors new to cryptocurrencies may have been caught off guard by bitcoin’s volatility, putting downward pressure on its price, according to cryptocurrency entrepreneur and investor Anthony Pompliano.

During an interview on CNBC’s Squawk Box on Monday, in Pompliano He said Bitcoin (Bitcoin) declines about once every 1.5 years, and the recent recession is unlikely to be a surprise Bitcoiners who have been in the game For a long time.

“Over the past decade, bitcoin has fallen by 30% or more 21 different times,” Pompliano said.

“So Bitcoin users are used to this. Now, the ones who aren’t used to this are the people coming from Wall Street. They’re not used to this kind of volatility.”

He added: “These new people are very scared. We are getting close to the end of the year. There are things around rewards that people are trying to figure out, should I actually sell this asset that I thought I was really excited about? And I think that puts some downward pressure on the price.”

The Bitcoin sell-off was mostly in the United States

Matthew Siegel, head of digital assets research at VanEck Investment Management, He said On Monday, the recent sell-off of Bitcoin, This caused the token to fall to its lowest levels Which amounts to about $82,000, was “overwhelmingly apparent in the American session.”

He cited tightening US liquidity and widening credit spreads as key drivers, as concerns about large-scale capital expenditures linked to artificial intelligence collide with a more fragile financing market.

The volatility of cryptocurrencies helps push the price higher

Bitcoin price volatility has been rising over the past couple of months and has been Creeping back to around 60 as of Mondaywhich could spark significant market movements in both directions, according to Bitwise market analyst Jeff Park.

Related to: Anthony Pompliano Leads New Bitcoin Buying Group, Raise $750 Million: FT

Pompliano told CNBC that people who have been involved in cryptocurrencies for a while understand that volatility is a strong indicator.

“It’s not negative. I would be concerned if Bitcoin’s volatility was zero. You need volatility for the asset to go up.”

“You know bitcoin has gone up 240-fold over the last decade. It’s a compound annual growth rate of about 70%. We’re not going to continue going forward with that level of growth,” he said.