Benzinga - by Adam Eckert, Benzinga Staff Writer.
Pomp Investments' Anthony Pompliano continues to look at the past performance of Bitcoin (CRYPTO: BTC) to make predictions about the future.
What To Know: Bitcoin is up more than 55% since the start of the year and nearly 135% over a one-year period.
The recent rally to all-time highs was largely driven by a surge in demand following the approval of spot Bitcoin ETFs in January.
Although the rally has stalled out in recent weeks, Bitcoin has checked some boxes that sets it up for another massive move higher, according to Pompliano.
“We just hit a really important milestone before the halving. We just had the highest weekly, monthly and quarterly close for bitcoin. And so the last four times that that’s happened, Bitcoin has appreciated at least 300% through the rest of the bull market,” Pompliano said Monday on CNBC’s “Squawk Box.”
Bitcoin has seen upward price momentum since late last year and many believe the bull market is just getting started with April’s halving event on the horizon. Bitcoin miners receive a reward for successfully mining bitcoin transactions. That reward is set to be cut in half later this month.
“The demand shock happened. Now we are going to have the supply shock, and so it’s hard just to see how the price doesn’t continue to go up,” Pompliano said.
Crypto markets have historically rallied in the months that follow a halving event. If bitcoin were to rally another 300% from current levels, it would be trading around $200,000 per coin.
Why It Matters: Pompliano previously explained that when an asset breaks through all-time highs, you enter into a price discovery phase where the world tries to figure out what that asset should be worth. He suggested this week that bitcoin is in the midst of a price discovery phase, spurred on by inflation.
“You don’t have to go to emerging markets to find a reason why people want to buy this. If you look at the United States dollar, it’s lost 25% of its purchasing power since 2020. Bitcoin is up 800% during that same time period,” Pompliano said.
Bitcoin is often thought of as an inflation hedge. What people might be missing is that it’s also forward-looking, he said, adding that bitcoin’s seven-month surge might be an inflation indicator.
“Why is it going up? You could argue, one, that it’s anticipating the next easing cycle. You could also argue the alarm bell is going off and actually inflation is not coming down month-over-month, it’s going up, and people see that and they’re buying bitcoin. So bitcoin is telling us, wait a second, inflation is a bigger problem than we actually thought,” Pompliano said.
The most recent consumer price index (CPI) reading showed consumer prices rose to 3.2% in February, ahead of expectations of 3.1%. Headline CPI also jumped 0.4% on a month-over-month basis. The next CPI reading is due to be released on April 10 at 8:30 a.m. ET.
$BTC Price Action: Bitcoin was down approximately 4.5% over a 24-hour period, hovering around $65,500 at the time of publication, per Benzinga Pro.
Now Read: Two Bitcoin-Related ETFs Shine In March’s Top 10 Inflow Rankings: ‘This Tailwind Should Persist,’ Analysts Say
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