Bitcoin ETF: What You Need To Know 2 Weeks Later

Anthony Pompliano went on Bloomberg to talk bitcoin etf, Coinbase, altcoins, and more.

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Kraken CEO Dave Ripley on the business implications of these new Bitcoin ETFs and we’re joined Now by Anthony Pompano a founder of pomp Investments who actually invested in the exchanges early on coinbase for example but when you look forward now in the era of a Bitcoin

ETF is a business model like coin bases in severe threat frankly given the ETF flow yeah I think the public markets drastically uh underappreciate what these businesses are right so if you think about it everyone knows the exchange business every knows the custody business but coinbase has kind

Of quietly been transitioning into a web 3 uh or kind of Crypton native uh Revenue as well and so they have this new blockchain base uh that’s driving a lot of Revenue and so really what I think Public Market investors should be thinking about whether it’s coinbase or

Other uh of these public companies is go stack rank every single one of these companies by what percentage of the revenue comes Crypt native and the higher the percentage of Crypt native Revenue the more mispriced they probably are in the public markets and I think qub is a great example speaking of

Crypto native you have kind of the ETF you have other kind of of stocks tied to the crypto industry but then you have things that are actually decentralized things that live in web 3 a word that we don’t hear a lot anymore on these programs where is the value anymore as

An investor do you start to look at more mainstream Bitcoin and the Bitcoin related products that have attached to Wall Street or do you look into web 3 well I think it’s all the same thing right if you really think about it Bitcoin was the one that kicked off this

Entire Revolution um when you look at the monetary uh competition I think Bitcoin is by far the winner uh now there’s going to be a big technology competition and really when you look at this sector I think a lot of people want to put it in a separate bucket but I

Look at this just as another macro asset that you can go in and you can invest in and so what we have seen is young people specifically are putting their Capital into this sector this sector has outperformed drastically even with the recent pull down you know Bitcoin is

Still up like 75% or something and so I think that investors who want to have outperformance they’re going to have to allocate to the sector and the ones that continue to fight it they’re just going to get left behind Anthony I want to get back to the spot Bitcoin ETF discussion

But I have to ask you a little bit more about coinbase obviously had a great year last year up nearly 400% or something like that you take a look at the 2024 performance down what 28% year-to date is that a dip that you’re buying um so coinbase we’ just held the

Uh position and what I think really again it’s the number one regulated Exchange in America and so if you’re bullish on this sector you’ve got to be bullish on coinbase another thing is they’re the custody provider for many of these ETFs and so in some weird way

They’re almost taxing the entire ETF uh kind of trend and so I think coinbase will continue to be a leader um and overall that’s good for the industry but I also think it’s good for Wall Street right Wall Street doesn’t just want to have a bunch of assets that are sitting

There that they can’t access if they’re on you know non-public exchanges and so having a stock like coinbase that they’re able to allocate to I think is actually good for them as well I want to get a little bit philosophical here because I’m looking at your notes you

Write about this new regime that this uh spot Bitcoin ETF approval is bringing about different investors less volatility more mainstream adoption less volatility doesn’t that just mean that Bitcoin trading is going to become less fun definitely I always joke that when the suits show up the fun is over right

And so to some degree um if you really think about what these new investors do they have different behaviors right they rebalance their portfolios historically what’s the meme bin hold right you don’t rebalance and so uh on top of that you also will see a lot of use of

Derivatives and so there is a lot of capital that’s going to flow into these ETFs we’re seeing that already but when you start to see derivative usage I think that some of that will pull away it won’t actually move the underlying and so people just have to realize new

Investors new behaviors uh the days of th% returns in a single year are probably over the good news is that an 80% draw down is much less likely doesn’t mean it won’t happen but much less likely now that volatility dampens and you are indeed here in a suit today

Uh you know you have Bitcoin ETF approval but what about the rest of them do you think an ETF tied to ethereum or another type of crypto asset could make as much sense this is one of my big bets over the next couple of years so I think

That the altcoin ETFs are going to be a massive area for Innovation and also value to be created uh we recently uh took one of our businesses reflexivity research we sold it to a Canadian uh publicly traded asset manager called defi Technologies one of their subsidiaries Valor this is their whole

Strategy basically go and find all of the altcoins That Wall Street wants access to but they can’t get access to and create etps in Europe and so we think that capital is going to flow heavily into the Bitcoin uh ETF but it also is going to flow into all of these

Other assets but how do you parse what’s real from the noise and especially when you think about the E uh the SEC and the Crackdown they have on so many of these tokens on so many of these exchanges how do you make a bet on any of them there’s

More nonsense in the public Equity Market than there’s in the crypto industry in terms of these assets and so when you really look at it is crypto is a free market still for for many uh purposes and so there’s been a lot of clearing out but the market has done

That right when you look at the public markets I mean you guys cover almost on a daily basis someone doing something stupid a company that you know said it was doing one thing and ended up not being successful and so uh bad people will do bad things markets will

Ultimately kind of uh figure out who the winners are but I do think that in this sector there’s a lot of people who have said hey there’s no value there right you know Warren Buffett told me it’s not valuable but again these assets have outperformed something like a birkar and

I think that people need to go spend the time to actually learn about it I want to talk quickly about stable coins obviously one of the big conversations in the crypto uh sphere over the past few weeks has been about tether’s reserves obviously the CEO of cander Fitzgerald saying that he’s seen them

They’re there is tether the stable coin of the future so one of the interesting things about tether and usdc usdc was rising in adoption uh but it’s a regulated stable coin in the United States and so actually people internationally don’t like that that is a turnoff to them is that there’s now a

Coin that the United States government has a lot of oversight in and so tether has continued to see adoption go up uh they are the 16th largest holder of us treasuries at this point they are an essential part of the American Financial economy so what does that mean for

Circle then as it looks to IPO would you be a buyer in IPO Stu I think circle’s an amazing business and especially with high interest rates they’re going to continue to do very very well I think again it’s I’m an American sitting on American soil right I look at these

Things very differently than maybe somebody does internationally but you again we cannot discount if you’re the 16th largest buyer of us treasuries at the same time that China Japan Etc is all buying treasuries less these things are going to become a very very important part and then also tether I

Mean if you look at their numbers right it’s one of the most profitable businesses on a revenue to uh employee basis in the world and so instead of attacking these types of businesses we should be looking at and saying how do we create more of these businesses but

Next time let’s not let it happen outside the United States let’s make sure that it’s based here in the United States Anthony this was awesome got to leave it there come back soon that is Anthony Pompano of pomp Investments