- Pompliano explains that BTC’s recent decline is normal, highlighting profit-taking and seasonal trends.
- He predicts a bullish future for Bitcoin combined with the power of AI.
Normally, altcoins follow that of Bitcoin [BTC] pattern, but at the time of writing, the entire crypto market was in an uptrend, while BTC fell 2.16% to trade at $61.3K.
Impact of Mount Gox’s redemption plans on BTC
The drop is notable compared to June 6, when BTC was $71.9K. Many attributed the decline to the payback plan of the defunct Bitcoin exchange Mt. Gox.
However, Alex Doornhead of Firmwide Research at Galaxy Digital, noted that the redemption plan “will cause less Bitcoin selling pressure than the market expects.”
Pompliano’s bullish view on BTC
Amid this news, Anthony Pompliano, host of the Pomp podcast, said in a recent interview with CNBC Squawk Box said:
“Bitcoin is up 40% YTD and 100% in the last year, so in terms of volatility this is quite expected.”
Pompliano explained the reasons behind this and elaborated on recent market behavior, noting that there have been several declines of 3% or more in previous bull markets. He stated that we are down 15% at this point and exclaimed:
“This is the right kind of bandwidth you would expect.”
Here he emphasized that when an asset rises significantly, profit taking is inevitable. There was an explosive rally at the start of the year, followed by natural profit taking.
Pompliano also mentioned that many traders engage in basic trading, going long on the spot market and short on futures, which dampens price movements and adds to selling pressure.
In addition, he also talked about the seasonal trend, noting that in the summer there are many investors who often say:
‘Invest in May and then leave’
Expanding further on this topic, he further noted that this pattern is typical, with the fourth quarter often being a big quarter, while “the second and third quarters tend to go a little bit sideways.”
Can Bitcoin and AI coexist?
Interestingly, Pompliano also highlighted artificial intelligence (AI) as a key driving force. He noted that the focus has shifted from Bitcoin and the overall crypto ecosystem to AI.
Pompliano believes that this shift is not harmful, but rather can be seen as a common ground for the coexistence of both technologies. He emphasized:
“AI is going to create enormous amounts of wealth and Bitcoin is going to protect that wealth.”
Echoing similar sentiments was Alexis Ohanianfounder of Seven Seven Six, who said:
“It is my theory that the age of AI and the rise of blockchain technology are about to collide and reinforce each other.”
So even if Bitcoin’s current price action concerns investors, the future, combined with the power of AI, could have a significant and mostly bullish impact on Bitcoin. As Pompliano put it:
“When a decades-long trend plays out, don’t get overly excited or scared based on the daily price movements.”