Wall Street is getting invited to ‘the greatest show on earth’ with bitcoin ETFs: Anthony Pompliano

Anthony Pompliano, Pomp Investments founder and partner, joins ‘Squawk Box’ to discuss the state of spot bitcoin ETF approvals, the various regulatory outcomes that could impact crypto trades, what investors should be on the lookout for, and more.

DEEPLY OPPOSED TO BITCOIN AND CRYPTO. IF HE WERE THE GOVERNMENT, HE WOULD CLOSE IT DOWN. >>> TRADERS ARE ON ALERT AS WE GET CLOSER TO THE ETF. JOINING US WITH MORE IS ANTHONY PAMPLIANO. >> THANKS FOR HAVING ME. >> I HAVE TO DIAL BACK.

I GO BACK TO WHEN IT WAS LISTED 30 YEARS AGO. I COVERED IT THEN. THE USO, THE OIL ETF IN ’04 AND O ’06. THIS IS BACK OFFICE STUFF. ALL OF WHICH IS TO SAY THE DEGREE OF ANTICIPATION OF THIS AND HOW IT IS MADE ITS WAY INTO

THE MARKET IS EXTREME. HOW IS IT NOT JUST ANTI-CLIMAX WHEN IT HAPPENS? >> WALL SDRTREET IS GETTING INV INVITED. WALL STREET HAS BEEN BOXED OUT OF IT. I THINK THAT IS WHAT YOU ARE SEEING IN THE EXCITEMENT. ONE THING I DO CAUTION IS YOU

CAN’T TRADE THIS LIKE OTHER ASSETS. WE SAW $1 BILLION OF INTEREST GOT WIPED OUT. THE GUYS DID A FANTASTIC JOB SAYING THIS ASSET IN 2021 WENT UP 800% BEFORE THE PANDEMIC STARTED. DURING THAT TIME, IT WAS FIVE 30% DRAWS. IF YOU ARE LEVERED LONG AND IT

GOES TO THE MOON, YOU ARE LIKELY TO GET SHAKEN OUT. >> THAT IS GOOD ADVICE. BE AWARE OF THE VOLATILITY. >> ON THE RISK BASIS, IT IS THE MOST ATTRACTIVE ASSET. IT COMES WITH TONS OF VOLATILITY. ALONG THE WAY, WE HAD TWO 80% DRAWDOWNS.

WALL STREET IS SAYING EF, IT IS C COMING. WE WILL HAVE A PERSISTENT BID. EVERYONE IS TALKING ABOUT THE PRIMARY FUND FLOWS. RETAIL OR INSTITUTIONS BUYING THIS ETF. OTHERS ARE CHANGING TO SAY THEY PUT UP TO 15% IN THE ETF. YOU HAVE THE BEST ASSET, WHY NOT

PUT BITCOIN IN YOUR ETF? >> ALL OF THIS FORMALIZES THE GREATER FOOL WHY BITCOIN SHOULD GO UP. THERE ARE MORE PEOPLE WHO WILL GET IN AND BUY AND HAVE AN EASY WAY OF DOING IT. IT IS EASIER TO OWN BITCOIN DIRECTLY THAN IT WAS TO OWN A

BARREL OF OIL OR GOLD BAR OR FUTURES ARE CONTRACT. IT DIDN’T CHANGE THE OVERALL PRICE CURVE. >> THERE ARE TWO POINTS YOU ARE MAKING. WHEN YOU BUY ETF, YOU ARE NOT BUYING BITCOIN. IF YOU WANT TO TAKE SELF CUSTODY, DO THAT.

ONE THING I SAY TO PEOPLE IS WHAT IS THE MOST VALUABLE COMMODITY? YOU ARE BUYING BITCOIN AND BUYING AN ASSET BACKED BY THE BIGGEST COMMODITY IN THE WORLD. IT IS INTERNET NATIVE AND FOR THE DIGITAL GENERATION. IF YOU DON’T LOOK AT OIL OR

GOLD, BUT YOU LOOK AT COMPUTING POWER. THAT IS WHY BITCOIN IS POWERFUL. >> IF I OWN BITCOIN THROUGH AN ETF, DO I HAVE BETTER OWNERSHIP OVER THE EXCHANGES? >> YOU HAVE THE ETF STRUCTURE. ALL OF THE THINGS THAT WALL STREET LIKES ABOUT THE REGULATED FUNDS.

YOU DON’T HAVE DIRECT EXPOEXPOS. YOU CAN GO TO THE ATM AND TAKE THE CASH OUT. WITH BITCOIN, YOU CAN OWN IT. YOU DON’T HAVE TO RELY ON ANY EXCHANGE OR ETF. SO, PEOPLE HAVE TO ASK WHAT IS MY COMFORT LEVEL? AM I COMFORTABLE TAKING SELF CUSTODY OR THE EXPOSURE?

I THINK THAT IS WHERE YOU SEE A LOT OF PEOPLE WHO HAVE BEEN SITTING ON THE SIDELINES WHO CAN’T TAKE SELF CUSTODY. >> ANTHONY, COINDESK IS REPORTING ON THE MATRIX REPORT FROM THE ANALYST WHO SAYS THE S.E.C. WILL REJECT THE SPOT ETF PROPOSAL.

I KNOW YOU THINK THAT IS A LONG SHOT. WHAT WOULD HAPPEN IF THEY DID THAT? IF THE S.E.C. SAID NO? >> IF THEY APPROVE IT, IT WILL BE SHORT-TERM VOLATILITY. IF THEY REJECT IT, THE SAME THING. SHORT-TERM VOLATILITY AND GET RIGHT BACK ON TRACK. WE SAW THIS.

CHINA HAD OVER 60% OF MINING INSIDE OF THE BORDERS. THEY BANNED MINING AND KICKED THEM OUT. 50% WENT OFF LINE. BY THE END OF MAY OF 2021, MINING HASH RATE WAS BACK TO THE HIGH TIME HIGH AT THE END OF THE YEAR OF 2021.

>> THE RISK/REWARD AND RETURNS PER UNIT OF VOLATILITY YOU CITE DEPENDS ON THE STARTING POINT. TWO YEAHAND A HALF YEARS AGO, Y SAID WE WOULD GET THERE ON BITCOIN. IT HAS BEEN NOTHING THROUGH THE INFLATION SPIKE. >> I THOUGHT IT WAS GOING 100.

I WAS OFF A LITTLE BIT. IN TERMS OF THE DIRECTIONAL MOVES AND IT GOES BACK TO VOLATILITY. I THINK THE VOLATILITY WILL DAMPEN AS ETFs AND STICKY HOLDERS COME INTO THE MARKET. WE AREN’T JUST TALKING ABOUT THE ETF. WE HAVE THIS COMING YU UP