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Anthony Pompliano says get ready for the bitcoin halving and price escalation to $100k

VIDEO TRANSCRIPT

We are talking the ultimate safe havens in this time of crisis. And for my next guest, that reassurance lies in Bitcoin. He even thinks it could go to a hundred thousand dollars. Anthony promptly. A.. Known as Pompe on Twitter as an American entrepreneur investor, a former U.S. Army veteran. He’s also the co-founder and managing partner of Full Tilt Capital and Morgan Creek Digital Assets. And he is the host of the Pop podcast. He joins me now. Anthony, nice to finally meet you. I’ve been following you on Twitter for years. So welcome to the show. Absolutely. Thanks so much for having me. How are you? First off, before we get into the interview, how are you holding up with, you know, remote working and this, you know, self-isolation and all that? How’s it going for you? Yeah, these are great. I think most people who are involved in a lot of the lines of business that we are already we’re pretty familiar with remote work. And so really no change of course there. Obviously, not everyone is fortunate enough to be able to do that. But for us, hasn’t been so disruptive. And so we’re kind of business as usual. Yeah, I guess you’re right. Same here. I’ve been used to working remotely and under varying degrees of conditions, so I want to just dive into it here. I listened to one of your podcasts from March 20th. Were you graded? Gave a score to bitcoin, oil, gold, equities. So you rated bitcoin and I’ll leave it on 10 equities, eight on 10 oil, five on 10. Bottom of the list is gold at a three on 10. So I want to understand your rankings here because yesterday we saw that stocks had the worst first quarter ever. Bitcoin is down 10 percent yet. Gold, Anthony, last man or woman standing up 4 percent. One of that’s still one of the best performing assets out there for sure. So I think part of this is a lot of the analysis that I’m doing is looking out over the next two years or so. Right. So I don’t really worry about kind of short term price performance and said much more interested in the long term medium to long term price performance. And the reason why I kind of rate of the things I did was to take gold to start with. It’s very stable. It’s done the job that a lot of people want it to do, but that volatility works in its favour in times of market drawdowns. But it works against it in times of market recovery, meaning that you just don’t get a lot of volatility in gold. And so what I said was over the next two years, given all the quantitative easing, kind of the inflation hedge aspect of gold, I could see us moving into kind of the two thousand to twenty-five hundred-hour range for gold, but that’s just not a very material increase in value compared to what I think other assets will do from here. And so if you then look at something on the other end of the spectrum, like Bitcoin, Bitcoin’s incredibly volatile. It drew down 50 percent at one point and you know, it’s down 30 percent or so depending on what date you look at. But over a year-long period, it’s still up, you know, 35, 50 percent depending on when you go back to. And over the next two years, I think that it will have hundreds of percent of appreciation given the quantitative easing and the volatility it brings in. So it’s less about kind of what’s happened in the past and it’s much more about forward-looking. What do I think will happen to that asset given the environment we’re going to. OK. So you invite volatility. Do you want assets with this volatility? Well, volatility, I think gets a bad rap because it has this negative connotation to it. But in order to get outsized returns, you need high levels of volatility. So I always say that volatility works in both ways up and down. So if you look at, you know, the best-performing stocks over the last decade or 20 years, they have high levels of volatility. And that volatility actually leads to outsized gains. Now, it can work against you in that it also could lead to large losses. But if you generally think something over a long period of time is going to appreciate at price and it has high levels of volatility, that appreciation in price is likely to be very large. And so I think that’s where something like Bitcoin actually it works to its advantage versus gold, which is much more stable, much more liquid and much less volatile. Now, I know you’ve had many debates with Peter Schiff, a well-known gold bug on this on this topic. But could you not see room for both assets in a portfolio? Wouldn’t you just have bitcoin and gold? Anthony Yeah, so that’s actually my argument is, you know, we’re in this kind of deflationary environment where there’s a liquidity crunch, the dollar strengthening. Obviously there will be some kind of manipulation of the market and flooding of the market with dollars will actually systematically weaken the dollar. And you’ll see, just like we did in 2008, 2011, most asset prices will rise, right? The dollar will weaken, asset prices will rise. And so at some point, whether you own equities, commodities, gold, oil, bitcoin, whatever, it won’t really matter. They’ll all go up in price to some varying degree. I actually think that gold and bitcoin will do very well in that environment. And so it doesn’t surprise me people would want both. But if you ask me which assets are going to appreciate more, obviously that’s bitcoin. Now, why would appreciate it? Because you’re also taking more risk, right? Gold’s got. Thousand years of track record, whereas Bitcoin’s only got about 11 years, and so I’m kind of the risk-reward is there with Bitcoin. But as you get the higher rates of return, you also get the higher rates of risk as well. Which gold doesn’t have. Now we have a major event happening in Bitcoin somewhat. Are you the greatest event for the cryptocurrency happening, happening and may. Can you shed some light on what you expect to happen to the price here in May? Yeah, so I’ve been writing about this now for almost a year. Really? Since last like May or June saying, look, we’re headed into an environment where the Fed was going to cut interest rates to near-zero or zero. They’ve obviously done that. We’ve been saying that they’re gonna have to generate lots of quantitative easing dropsy doing that on a historic level. And those two things were to coincide at the same time or near the same time as the Bitcoin has, which is the incoming daily supply gets cut in half from eighteen hundred Bitcoin a day to nine hundred. Now, if you go back to 2008 2009, remember, gold drew down 30 percent in 2008 during the liquidity crisis. But coming out of that when quantitative easing was announced, et cetera, from 2009 to 2011, we saw a massive increase in price about 3x. And gold eventually hit an all-time high. Now imagine in 2009, 2010 and into eleven fifty percent of the gold miners basically shut off their operations. So 50 percent of the incoming daily supply just disappeared. It would take a scarce asset, make it scarce or right at a time when all these investors are running to it and the value of gold would have gone higher. That’s essentially what I think is about to happen here. Everyone’s going to look for inflation, hedge assets, whether it’s bitcoin or gold. As they do that, you’re going to get the bitcoin having 50 percent of the daily incoming supply gets taken away. And so you’re taking a scarce asset, making it scarce. You’re right at the moment that everyone wants it in their portfolio. And therefore, I think that it provides this rocket fuel kind of for the future outlook of bitcoin. But your forecast is anywhere between twenty thousand to a hundred thousand. Right now we’re sitting a little over 6000. So a pretty wide range there, Anthony. Yeah. So I actually believe in a kind of gone out publicly on record and saying I believe Bitcoin will hit one hundred thousand dollars by the end of December. 2021 So a little over 18 months from now. The reason why I talk about twenty thousand is kind of barriers in the absolute worst-case scenario, if you’re the biggest bear for bitcoin, one of the decisions yet to make on the lower end of that bound is do you think bitcoin will make a new all-time high or not ever write an all-time high being twenty thousand? It was there for just, you know, just a couple of hours, really. But if you don’t think bitcoin will never make another all-time high, then we’ll never see twenty thousand dollars again. But if you believe at least that would happen that we haven’t seen The All-Time High ever for bitcoin, then you’re talking about at least eclipsing twenty thousand. My personal view though is that we’ll see bitcoin hit one hundred thousand dollars before the end of December. 2021, though. Moving on to equities, Anthony. You know, you tweeted that with the pandemic, we’re going to see entire industries possibly disappear, including the movie industry. Yet you still gave equities a pretty high rating there, you know. How are you handling equities? Would you be touching them right now? Yes, I’m pretty well known for never investing in public equities. It’s just not my forte. I don’t like the fact that you don’t have a lot of control. You don’t have any sort of information, advantage, et cetera, over other people. But the reason why I gave equity such a high rating is you’ve already seen a pretty material drawdown. And so unless you think that even the United States is going to fail or equities are gonna go to zero. Obviously, any sort of recover, you could see 30, 40, 50, 100 percent type recovery in the short to medium term. And then you could see over a kind of a longer period of time. New all-time highs, et cetera. And so any time you get an asset that’s not going to go to zero, that has a material drawdown. It should perform pretty well over the next kind of, you know, five years or so. Now, there are specific equities that I think will do even better. Right. So if you look at something obvious like a United Airlines. Right, one of the things that I think people need to kind of keep in their heads is United USA trade at eighty eighty-five dollars a share at the top if you’re down at twenty twenty-five bucks. They did five billion dollars in IB. in 2019 at twenty. Twenty-five bucks are trading around five points seventy-five point eight billion dollars of market cap. But a lot of people look at that and say wow, United Airlines is a complete discount. It’s so cheap generational buy. You have to remember though that revenue basically disappeared for the company. So as it stands, you’ve got a company that’s not doing six point five billion dollars in eBay to do something much, much less buy 80, 90 percent less than that. And so there’s still actually an argument that even at a five-point seven billion dollar market cap, that stock may still be overvalued. Right. Even though it’s dropped to 80 percent or whatever it’s been. And so I think people are going to be really, really careful about kind of hindsight bias of saying, well, look, what the stock‘s trading at today, used to trade at this other number. It’s so much it’s so cheap. That might not initially be true because the performance of the company has drastically changed. And you brought up movie theatres, I think is a great example in the week, March 20th. Twenty-sixth last year, it did about 200 million dollars at movie theatres in top-line revenue in March, twenty to twenty-six in 2020. The movie theatres combined domestic Berkoff box office did less than six thousand dollars in revenue. You’re talking about a ninety-nine percent evaporation of revenue in an entire industry in the United States. I just don’t know how you come back from that in any material way over the short to medium term. All right. Well, I guess then my final question to Anthony is, you know, talking about coming back when could you see us open for business again? How long is this road in your eyes? Yeah, there’s a lot of people who are super optimistic. But all I keep saying is we’re not coming back from this as long as all of us are sitting our asses at home. We have a government-mandated shutdown of entire industries of many businesses. And you’ve got coronavirus, which is ground to the global economy to a halt. And that’s not going to recover until we get out of our homes. And I continue to say the road to recovery for the American economy and really the globe is to get businesses turned back on and get people back to work. So if you want the American economy to recover, get American businesses back to work, but American workers back to work. And I think you’ll see that recovery. It’s not going to be a V-shaped recovery because you’re just not going to see us going from spending almost no money while sitting at home to all of the sudden spendings what we were spending in the good times. I just don’t see that happening. I think we’re in for a long run. So would you do it sooner than later? Even at the risk of people’s health? Yes. So I tend to think that one of the big concerns here is we’re faced with two crises. We have a health care crisis that’s causing an economic crisis. But the problem with a lot of the decisions that are being made right now is we have bad data. Right. So if I asked you right now, how many people in the United States have Coronavirus, nobody can answer that question. I can’t answer it. And neither can anybody else because we’ve only tested about eight hundred ninety-five thousand people out of the three hundred thirty million Americans as of Saturday. This past Saturday, eight hundred ninety-five thousand people been tested. We don’t know how many people actually have it. And then even when you look at the death toll, there’s a lot of situations wherein Italy, for example, ninety-nine percent of the deaths that have been reported actually had other health issues. And so what ends up happening is we’re getting the conflation between somebody who dies, who test positive for Copan 19 and somebody who dies from Koven, 19. Now, I’m not saying that this isn’t bad. I actually think it’s a really serious health issue and we have the potential to overwhelm the health industry if we’re not careful. So we have to take this seriously. And I think it’s a good idea that we’ve actually put these shelters in place and quarantines. But I also think that we have to be careful about making massive decisions with bad data, because no matter how much analysis you do have, bad data, you’re still gonna get bad outcomes. You’re gonna make bad decisions. And I think just given the lack of testing right now, we don’t know what the data actually is and therefore, we can’t make good decisions. All right. Anthony Polyanna, thank you for your thoughts. Thank you so much for joining me. Stay safe and we’ll talk soon. Absolutely. Thanks for having me. I hope you guys stay safe as well. And we’ll do it again soon. Thanks. Thank you. You can follow Anthony out at pump and you can follow me acting at a company. We’ll have much more for you on Go.com. Thanks for watching.

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