Wall Street doesn't need to fear the fluctuations of bitcoin, says millionaire investor

Source: Exame Original Title: Wall Street need not fear bitcoin's fluctuations, says millionaire investor Original Link: Institutional investors entering the crypto market now may have been caught off guard by the volatility of bitcoin, which has exerted downward pressure on the price, according to entrepreneur and investor Anthony Pompliano.

During an interview on CNBC's Squawk Box program on Monday, Pompliano said that Bitcoin experiences sharp declines approximately once every 1.5 years, and that the recent correction is unlikely to surprise experienced Bitcoiners.

“In the last decade, bitcoin has dropped 30% or more on 21 different occasions,” said Pompliano.

“Bitcoiners are used to this. Now, those who are not used to it are the people coming from Wall Street. They are not accustomed to this kind of volatility.”

“These new people are very, very scared. We're approaching the end of the year. There are issues involving bonuses, and many are trying to understand if they should sell this asset they were excited about. I think this is putting downward pressure on the price,” he added.

Bitcoin sales were predominantly in the USA

Matthew Sigel, head of digital asset research at fund manager VanEck, stated on Monday that the recent liquidation of bitcoin, which saw the token drop to lows around $82,000, was “mostly a phenomenon of the US session.”

He pointed out the liquidity squeeze and the widening credit spreads in the United States as the main factors, as fears around the large capital expenditures related to artificial intelligence clashed with a more fragile financing market.

The volatility of crypto helps drive the price

The volatility of the bitcoin price has increased in the last two months and was rising again to around 60 on Monday, which could generate large market movements in both directions, according to Jeff Park, market analyst at Bitwise.

Pompliano told CNBC that those who have been involved in crypto for a longer time understand that volatility is a strong indicator of market health.

“It is not something negative. I would be concerned if Bitcoin's volatility were essentially zero. You need volatility for the asset to rise.”

“You know that bitcoin has risen 240 times in the last decade. This represents a compound annual growth rate of about 70%. We will not have that level of growth going forward,” he added.

“But if we have something between 20%, 25%, 30%, 35% annual compounded growth over the next decade, Bitcoin will still outperform stocks. And that is why many Bitcoiners are so excited about this asset as part of their portfolios,” Pompliano added.