Morgan Creek Digital Founder and Partner Anthony Pompliano was featured on the most recent episode of Jason Calacanis’s This Week in Startups in the aftermath of their public Twitter banter over the viability of bitcoin and crypto assets more generally.
During the show, which turned out to be much friendlier in tone than some may have expected, Calacanis asked Pompliano if he thinks bitcoin’s bear market is coming to an end. Although Pompliano admitted that it’s basically impossible to call the bottom on bitcoin, he shared a few points around bitcoin’s volatility (or lack thereof) in his response.
More Stable Than the Public Markets
The first thing Pompliano pointed out in his response is that bitcoin was more stable than the S&P 500, NASDAQ, and DOW over the course of a month for the first time last fall.
“It’s one month out of twelve, and it’s only happened one time ever,” said Pompliano. “But it’s still interesting that an asset we think of as so volatile was actually more stable than public equities.”
Amazon is Pretty Volatile Too
Taking his point further, Pompliano then specifically discussed the volatility associated with Amazon stock. He pointed out that Amazon has declined by at least 90% against the US dollar on two separate occasions. Additionally, the average yearly range on the price of Amazon stock is around 30% from the annual high.
“That doesn’t mean Amazon is a bad investment,” said Pompliano. “It’s just there’s more volatility than we think of because we tend to look at two, five, or ten year time periods where Amazon has just gone up and to the right.”
This Isn’t Bitcoin’s First Bear Market
The final point Pompliano made in response to Calacanis’s question around whether the end of bitcoin's bear market is here had to do with the fact that this is not the first time the bitcoin price has fallen as much as it has since the peak in December 2017. Bitcoin has gone through multiple boom and bust cycles, and as Pompliano pointed out, the floor of each bear market has been higher than the previous one.
Having said that, it should be noted that past trends are not necessarily indicative of future results.
Getting to an answer to Calacanis’s original question, Pompliano added, “I tend to think [we’ve] already drawn down and kind of experienced the majority of the drawdown, and so I look at is [as]: Do you think it’s going to be worth more five years from now? I do, so [it’s] probably a good time to be interested in it.”