Bitcoin’s Bull Run: Unveiling the Factors Behind the Surge
Anthony Pompliano, the founder of Pomp Investments, recently discussed Bitcoin's current bullish trend, marking its resurgence beyond the $43,000 threshold.
In an interview with CNBC Television, Pompliano highlighted Bitcoin’s adherence to a historical four-year price trend linked to halving events, where miners’ rewards are halved.
According to Pompliano, Bitcoin’s bull market is in motion, typically unfolding within roughly four-year cycles between these halving events. He explained that historically, there’s been a span of about two-and-a-half to three years from the prior bear market’s low point to the subsequent bull market’s peak, followed by a correction phase lasting about a year to a year-and-a-half. This pattern has seen substantial increases, often followed by an 80% downturn.
Regarding Bitcoin’s recent surge above $40,000, Pompliano attributed it to two primary factors. Firstly, the speculation surrounding the potential approval of spot market Bitcoin exchange-traded funds (ETFs) in January. Secondly, the anticipation of the Federal Reserve initiating interest rate reductions, possibly as early as 2024.
Pompliano elaborated that the speculation about the Bitcoin ETF approval is straightforward—investors anticipate a price increase upon approval, hence their rush to acquire it beforehand.
READ MORE: Analyst Survey Unveils Interest in Bitcoin ETF, Advisors Seek Options
Additionally, he discussed the macroeconomic perspective, emphasizing that markets are forward-looking. With the current environment witnessing quantitative tightening and record-breaking interest rate hikes, investors foresee a potential shift in the Federal Reserve’s balance sheet management.
He suggested that if the Federal Reserve continues with its tight monetary policies, it could lead to a recession. In anticipation of a return to quantitative easing, investors believe that assets like Bitcoin could surge rapidly. Hence, rather than waiting for the shift to loose monetary policies and then investing, the strategy is to acquire these assets just before the anticipated transition occurs.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
