Anthony Pompliano, the Founder of Morgan Creek Digital, said that Bitcoin (BTC) is a non-correlated asset. During a conversation at CNBC’s Squawk Box, he discussed how cryptocurrencies are performing. Most of the virtual currencies, including Bitcoin, seem to have a low correlation with other assets, almost close to zero.
Bitcoin is a Non-Correlated Asset
Anthony Pompliano explained during a CNBC interview that Bitcoin is a non-correlated asset. Indeed, a few days ago, Pompliano wrote a blog post in which he mentions that there is a near-zero correlation between Bitcoin and the S&P 500 index. Furthermore, he mentioned that the correlation to the dollar index is also near zero.
Today's CNBC segment:
– Bitcoin is uncorrelated to stocks
– Supply & demand economics work
– Long Bitcoin, Short the Bankers
The message won't change. Onward!https://t.co/MqJ1LEZnKa
— Pomp 🌪 (@APompliano) December 26, 2018
He wrote on the matter:
“Bitcoin is a non-correlated asset – This is the holy grail of any portfolio. Bitcoin’s current 180-day correlation to the S&P is 0 and the correlation to the dollar index is near zero as well. Investing in non-correlated assets should reduce the risk and increase the returns of a portfolio according to modern portfolio theory.”
He explained that it could be a good decision to invest in Bitcoin since it has the potential to grow in the future. He went on noting that Bitcoin has an asymmetric return profile since there is more upside than downside in owning this asset.
Bitcoin has also been a very good investment in the last 10 years. The most popular virtual currency outperformed every single asset available in the market. In the future, Bitcoin could keep growing and registering new all-time highs and surpassing traditional financial markets in returns.
Although Pompliano is bullish for the long term, he said that Bitcoin could keep falling even further. He mentioned that it could be traded under $3,000 in the near future. Pompliano is not the only expert that believes that Bitcoin could keep falling in the future. The cryptocurrency investor and partner at the investment firm BlockTower Capital, Michael Bucella, said that Bitcoin could keep falling in the near future.
At the time of writing this article, Bitcoin is the largest crypto in the market. The virtual currency is being traded around $3,654 and it has a market capitalization of $63.77 billion.