As of December 25, 2025, in the East 8 Time Zone, Bitcoin's cumulative annual increase has exceeded 100%. The increase over two years has been summarized by KOLs as "over 100%", and nearly 300% over three years. Although the price has not experienced the extreme surge that was anticipated, volatility has clearly declined, and institutional participation and media attention continue to rise. Against this backdrop, Anthony Pompliano stated in a mainstream financial program that "the future of finance is AI plus Bitcoin," and the community's high interest in AI and Bitcoin has driven FOMO sentiment to rise again. Under the new framework of "AI creates wealth, Bitcoin protects wealth," the market is re-evaluating Bitcoin's role and range fluctuations around volatility compression, institutional allocation, and AI bubble risks.
Core of the Event
Recently, Bitcoin has been fluctuating near previous highs. From public statements, Pompliano emphasized that it has "increased over 100%" in the past two years and "nearly 300%" in three years, while also noting that there has not been a significant retracement of 70%-80%, which differs from the historical rhythm of severe bull-bear transitions. In an interview with CNBC Squawk Box, he bluntly stated, "The future of finance is AI plus Bitcoin," describing Bitcoin's long-term performance in the financial market as a "monstrous presence," summarizing it in three points: volatility is maturing, long-term compounding growth is occurring, and institutional demand is continuously increasing.
On the media side, Cointelegraph condensed his statements into "Bitcoin shows mature volatility, strong long-term performance, and growing institutional demand," and repeatedly reprinted related views within 24 hours; Coin Bureau amplified his logic citing VanEck: if Bitcoin's volatility is "considered halved," the past 80% extreme retracements could theoretically compress to about 40%, corresponding to a scenario where it falls from $120,000–$126,000 to around $80,000. BlockBeats focused on his judgment basis that the "possibility of a significant drop in Q1 2026 is very low"—that is, the current level of volatility has significantly compressed.
The direct impact of this round of statements is: Bitcoin's narrative is being clarified and amplified in mainstream media discourse from "high-volatility speculative asset" to "a financial new cornerstone that can be included in long-term asset pools alongside AI."
Incentive Analysis: Resonance of News, Capital, and Emotion
From the news perspective, Pompliano chose to emphasize "AI + Bitcoin is the future of finance" in mainstream media like CNBC at the year-end window, packaging two major macro narratives that have gradually accumulated over the past year: one is the diffusion of AI in traditional tech stocks, venture capital markets, and real industries; the other is Bitcoin's "de-marginalization" in institutional and regulatory dialogues. Briefings show that he not only made a complete statement on CNBC but also continued to reinforce this view on social platforms, raising topic heat through a $5,000 Bitcoin price guessing activity during the Christmas period. This combination of "media + social + interaction" allowed the viewpoint to spread rapidly within the crypto circle and the broader financial community.
On the capital side, the market is re-evaluating Bitcoin's allocation attributes using "volatility compression." Coin Bureau cited Pompliano's point: if Bitcoin's volatility is perceived as "halved" compared to historical stages, then the traditionally understood 80% extreme drop could be rewritten in the model as a retracement range of about 40%. Although these numbers come from oral statements and secondary reports and are not sufficient for rigorous statistical conclusions, they provide a visual reference for risk budgeting models: when potential retracements narrow from 80% to lower ranges, Bitcoin's theoretical weight in multi-asset portfolios has room to rise. Such views are not making precise predictions but are conveying a signal to long-term capital: if the volatility structure indeed undergoes a phase change, both Bitcoin's funding costs and risk premiums need to be re-priced.
Emotionally, there are two layers. One layer is the short-term disappointment from holders: Bitcoin has failed to reach the "hundreds of thousands" target price previously touted by some KOLs within 2025, and there has not been the dramatic "parabolic surge" seen in previous cycles at year-end. The other layer is the "emotional correction" provided by Pompliano and others: he emphasized in the interview that Bitcoin's two-year increase exceeds 100% and nearly 300% over three years, suggesting that the market should focus more on sustained compounding rather than a single annual missed target; he also pointed out that the absence of extreme surges at year-end makes a 70%-80% crash in Q1 2026 "very surprising" at the current volatility level. This explanation of "no climax means fewer causes for a crash" provides psychological cushioning for holders and supports the narrative that "the structural bull market is still in its early stages."
Under the joint action of news and capital logic, community sentiment is generally bullish and shows obvious FOMO characteristics, with the admiration for "AI + Bitcoin as the main narrative of the next decade" replacing the short-term anxiety of "the last train of this bull market."
Deep Logic: How AI, Macro, and Institutionalization Reshape Bitcoin's Role
From a deeper dimension, the narrative of "AI + Bitcoin" stands at the intersection of macro and technological changes. On the technical side, AI is moving from a pure model and computing power competition to commercial landing and cash flow release: from large model services to vertical industry applications, AI-related companies are receiving high valuations in the capital market, forming considerable equity wealth and future cash flow expectations. Pompliano connects this technological dividend with Bitcoin in one sentence—"AI will create a lot of wealth, and Bitcoin will protect that wealth."
Behind this is a logical chain of asset allocation: once AI-related companies, entrepreneurs, and investors gain excess returns in this cycle, they need to find value storage tools that cross cycles, political, and monetary risks. Traditional options include dollar-denominated assets, gold, and other commodities, while Bitcoin, as a decentralized, limited-supply asset that circulates globally 24/7, naturally has a narrative basis for "asset exchange" with this new wealth. If AI is the source of productivity and profit increments, then Bitcoin is packaged as "a balance sheet anchor across political cycles," with both forming a complementary story.
The macro environment provides the soil for all of this. Briefings mention that the market has differing expectations regarding future macro monetary policy easing, inflation, and political cycles, and the effectiveness of traditional monetary policy tools is being questioned. As a result, Bitcoin is viewed by some market participants as a candidate for a "new benchmark asset" to combat fiat currency depreciation and policy uncertainty. Pompliano has repeatedly emphasized that Bitcoin's long-term compound growth rate fluctuates around 70% within historical ranges. Although this statement cannot be simply extrapolated to the future, it is used in macro narratives to prove that Bitcoin has raised the long-term price floor across multiple cycles.
Institutionalization is another key clue. Since the second half of 2025, from public events like "Bitcoin Investor Week" targeting institutions to traditional financial media intensively discussing Bitcoin's allocation value, its presence in traditional capital circles like Wall Street has significantly increased. Although public data has not provided detailed "daily net inflow" or "holding ratio" quantitative data, it can be confirmed that more compliant products, custody solutions, and derivative infrastructure are being built, allowing pension funds, family offices, and various asset management institutions to hold or indirectly hold Bitcoin within regulatory frameworks.
From an on-chain perspective, although the briefings did not provide specific on-chain indicators, under the combination of "declining volatility + absence of extreme retracements," the market generally tends to summarize this round of movements as a process of "gradual distribution of chips and a phase increase in the proportion of long-term holders." Such structural changes align with the direction of institutionalization, strengthening macro narratives, and the capital spillover from AI: assets with reduced volatility are more easily incorporated into institutional quantitative models, thus gaining sustained allocation demand.
At the intersection of macro uncertainty, rapid technological evolution, and rising institutional discourse, Bitcoin is being gradually packaged from "high beta tech risk asset" to "digital asset expected to assume a benchmark role," with AI becoming the funding and narrative engine for this role upgrade.
Bull-Bear Game: Crowded Narratives and Structural Divergence
The core arguments of the bullish camp can be summarized in three layers. First, on a structural level, Bitcoin's actual volatility is significantly down from historical highs, and according to Pompliano and some institutional views, if this phase phenomenon is understood as "halving volatility," then the frequency and magnitude of 70%-80% extreme retracements may decrease in the future. This provides narrative support for Bitcoin's transformation from "high-volatility speculative product" to "an asset that can enter long-term asset allocation pools."
Second, on the capital side, bulls believe that the AI industry will continue to generate a large amount of equity and cash flow wealth in the coming years, and Bitcoin provides a decentralized, globally liquid allocation outlet for this "new capital." AI-related practitioners, high-net-worth individuals, and the family offices and funds managing their wealth have become potential channels for "AI capital spillover → Bitcoin allocation." Coupled with traditional institutions gaining Bitcoin exposure through more financial products, the overlapping sources of capital form a long-term logic of "sustained buying."
Third, on the narrative level, "AI + Bitcoin" binds the two strongest topics in the tech and finance circles, providing a unified framework for multiple parties to tell their stories: Wall Street can discuss "the combination advantages of new types of risk assets and traditional assets," Silicon Valley can talk about "locking AI wealth with BTC," and the crypto circle can discuss "the two-way cycle of computing power and value flow." From the bullish perspective, this cross-industry consensus narrative itself is a capital attractor.
However, the bearish or cautious camp also has clear counterarguments. First, there is the risk of narrative crowding. AI and Bitcoin are already under the spotlight of public opinion and capital, and further binding under the influence of figures like Pompliano can easily evolve into a "super consensus trade": everyone knows this is a major narrative, and everyone is crowded into the same direction for allocation. Once the macro environment reverses, regulations tighten, or one side experiences a black swan event, the chain reaction could far exceed the adjustment of individual assets.
Second, there is the risk of contagion from an AI bubble. Tether CEO Paolo Ardoino warned that an AI-driven market bubble could become one of the biggest risks for Bitcoin in 2026. The logic is that if AI-related assets experience valuation contraction or even a systemic bubble burst in the next year or two, then the narrative strongly tied to AI may also be "de-bubbled," even if Bitcoin's on-chain fundamentals have not temporarily deteriorated. This can be seen as a typical scenario of "good narratives backfiring."
Third, there are doubts about the "permanent convergence of volatility." Current statements about "halving volatility" and "narrowing extreme retracements" are more based on the specific macro and regulatory environment of 2023–2025 and have not yet experienced the complete baptism of future interest rate cycle fluctuations, potential policy shocks, and new bull-bear cycles. From a statistical and risk management perspective, extrapolating phase low volatility as a long-term norm presents significant bias; if a new round of 70% retracement occurs in the future, the current narrative of "mature volatility" will face strong backlash.
Additionally, there is internal debate about whether miners should shift some of their computing power and capital towards AI businesses. Supporters argue that miners can gain diversified income through AI computing power businesses, enhancing the entire computing power ecosystem's anti-cyclical ability and attracting more infrastructure investment; opponents worry that this could dilute miners' focus on Bitcoin network security, long-term weakening the core value support of the "Bitcoin network security budget." Since the briefings did not provide specific mining company and revenue data, this debate currently remains more at the level of incentive structures and business models.
The essence of the bull-bear game lies in whether the combination of AI and Bitcoin represents a long-term synergy at the fundamental level or a narrative stacking and risk concentration between two hot tracks.
Market Outlook: Conditional Predictions Under the AI + Bitcoin Framework
Given the current limitations of information and data, judgments about the future market are more suitable for scenario analysis rather than a single prediction, emphasizing that the following content is based on public statements and market reactions, and does not constitute quantitative backtesting conclusions.
One scenario is that AI successfully navigates the next phase of the cycle, with its industry valuation undergoing reasonable digestion before continuing to release cash flow and profit growth. Bitcoin gradually completes its role transition from "risk asset" to "new benchmark asset" during the process of institutionalization and declining volatility. Under this assumption, the macro environment generally maintains moderate inflation and relatively friendly liquidity conditions, with institutions steadily increasing Bitcoin's allocation weight through more compliant products. Bitcoin's volatility oscillates in a medium-low range, with highs and lows slowly rising, and extreme retracements relatively converging.
Another scenario is that AI valuations experience a severe bubble burst in the next year or two. At that time, the tech high-valuation sector and the crypto market may de-leverage simultaneously, shifting the narrative from "AI + Bitcoin is the future of finance" to "technology and crypto are over-financialized," with Bitcoin being reclassified as a "high beta risk asset," leading to a significant rise in volatility and capital fleeing due to a sharp drop in risk appetite. In this path, the current discussion of "mature volatility" will be re-examined, and the market will need to complete a repricing of Bitcoin's risk premium through a new round of severe volatility.
A third scenario is that regulatory and policy variables dominate the trends over the next two to three years, leading to a divergence in the paths of AI and Bitcoin. For example, major economies may adopt relatively friendly or neutral industrial policies for the AI industry while imposing stricter financial regulations on crypto assets; or conversely, impose stricter constraints on the data and model security of AI while gradually providing a clear compliance framework for crypto exposure at the asset level. In such scenarios, compliant capital preferences for AI and Bitcoin may differ, with Bitcoin oscillating between the labels of "digital gold" and "tech asset," and its valuation anchor shifting with regulatory tone.
In terms of monitoring dimensions, key indicators to focus on in the next one to two years include: structural changes in Bitcoin's implied volatility and actual volatility, observing whether it stabilizes at relatively low levels or shows a new round of increases; public signals of institutional participation, such as the number of related financial products and the frequency of public statements from leading institutions; capital flows in the AI industry, observing whether there is a trend of allocating Bitcoin or other crypto assets from publicly disclosed financial reports; and changes in the regulatory tone of major economies towards AI and crypto in different directions.
In terms of operational thinking, a more cautious approach is to view "AI + Bitcoin" as a long-term structural theme under a macro narrative, rather than a short-term certainty trade, and to be wary of excessive concentrated exposure to a single narrative, especially maintaining risk awareness during times of high sentiment and data divergence.
Looking back from the current point, Pompliano's high-profile statement of "AI + Bitcoin" on CNBC is a landmark event: it completes the long-nurtured story puzzle within the crypto community at the mainstream media level—AI creates wealth, Bitcoin protects wealth. The convergence of news, capital, and sentiment at this moment provides the market with a new pricing framework. However, on a longer time horizon, whether this framework can stand firm still depends on three variables: whether Bitcoin's volatility structure is truly maturing through validation in future cycles, whether the AI industry can steadily release real profits amid the bubble and regulatory game, and how the macro and policy environment will shape the asset allocation preferences of institutions and individuals.
Whether AI and Bitcoin can truly become the dual cores of the financial future will not be determined by a single interview and a round of social media frenzy, but will be answered through data and market behavior amid macro shocks, regulatory cycles, and technological iterations over the coming years.
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