Cryptocurrency entrepreneur and investor Anthony Pompliano stated that institutional investors who are new to cryptocurrency may be caught off guard by Bitcoin's volatility, which has put downward pressure on its price.
In an interview on CNBC's "Squawk Box" on Monday, Pompliano noted that Bitcoin (BTC) experiences a pullback approximately every 1.5 years, and the recent decline is unlikely to surprise long-term Bitcoin holders.
"In the past 10 years, Bitcoin has had 21 instances of a 30% or greater pullback," Pompliano said.
"These newcomers are very, very fearful. We are approaching the end of the year. People are considering things related to bonuses, should I really sell this asset that I was once very excited about? I think this has put some downward pressure on the price," he added.
Matthew Sigel, head of digital asset research at investment management firm VanEck, stated on Monday that the recent sell-off in Bitcoin is "mostly a phenomenon of U.S. trading hours," as the token fell to a low of around $82,000.
He pointed out that tightening U.S. liquidity and widening credit spreads are key driving factors, as concerns over large capital expenditures related to artificial intelligence collide with a more fragile financing market.
According to Bitwise market analyst Jeff Park, Bitcoin's price volatility has surged in the past two months, gradually rising to about 60 as of Monday, which could trigger significant market fluctuations in both directions.
Pompliano told CNBC that long-term participants in cryptocurrency understand that volatility is a strong indicator.
"This is not a negative factor. If Bitcoin's volatility were essentially zero, I would be concerned. You need volatility to drive asset prices up."
"But if we achieve a 20%, 25%, 30%, or 35% compound annual growth rate over the next 10 years, you will outperform stocks. I think that's why many Bitcoin holders are very excited about having this asset as part of their portfolio," Pompliano added.
Related: Analyst: Bitcoin (BTC) sell pressure eases, potential for continued recovery
Original: “Anthony Pompliano: Wall Street Shouldn't Be Concerned About Bitcoin (BTC) Volatility”
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