The Pomp Podcast
00:05:53 · Anthony Pompliano
[00:05:53] S0: If you look at the equity market, the fourth quarter tends to be very strong. But more importantly is the fourth quarter of midterms tend to be even stronger. And so right now, in this 80 to 85 k range, what we're watching is a weakness. People are saying, oh, it's going to zero, all this stuff. Well, in the month of October, when you're going into midterms, usually, there's a lot of concern about there being no certainty. Who's gonna win? Are the Democrats gonna take congress? Are they gonna take the senate? Can the Republicans defend it? What's going on with Trump? JD Vance is running around the country, and he's doing all of these different, you know, speeches and rallies. Trump is campaigning. Which candidates are they gonna back? Are the Democrats gonna be strong enough? Can they exploit any of the mistakes the administer... It's all noise. So what happens is people basically want certainty. As we get close to the midterms and we get certainty, all of a sudden, people say, oh, nothing bad happened. Let me go keep investing my money, and they'll start pouring capital back into the equity market and into the Bitcoin market. And my guess is that going into the end of the year, you're gonna see strength in both equities and Bitcoin, and we're gonna end the year higher than where we are right now in both of those markets. So it goes back to if you have fundamentals, if you have seasonality type based stuff, and you have a very clear reason why the narrative has dislocated from those fundamentals, that's when you should be excited. And I think going back to the people calling it, going to zero, all this stuff, hey. Thank you. I appreciate all of that because it actually provides the opportunity. And if you look at... Again, what have we been doing in the public company for the last couple of months? We have a lot of Bitcoin. We've been selling Bitcoin at NAV and buying back shares, which is us buying more exposure. We're cranking on the Bitcoin exposure for every shareholder. We're trying to get more Bitcoin exposure because I have a generally bullish, view as to Bitcoin's future over the next, you know, twelve months or so.
00:07:44 · Polina Pompliano, Anthony Pompliano
[00:07:44] S1: So let me ask you this. Bitget CEO Gracie Chen says that Bitcoin could swing 30% in either direction in a month or two as the big AI IPOs hit. Why? [00:07:57] S0: Well, I think that anytime you have change in a market, there's always volatility. Volatility can work in both directions. Now one of the questions that people have had historically is, is AI sucking the air out of the room and capital is rotating towards AI and is moving away [00:08:12] S1: from question. [00:08:13] S0: From the Bitcoin, the Bitcoin market. Now I definitely think that there's been a lot of capital rotation. Specifically, we mentioned, you know, the miners moving to HPC, things like that. In my own investing, do I as aggressively buy Bitcoin every single day like I used to? No. But do I still want more and more Bitcoin exposure month after month, year after year? Absolutely. And so I'm continuing to increase that exposure. [00:08:40] S1: Hold on. [00:08:40] S0: But now when I get paid a dollar, maybe a 100% of it doesn't go to Bitcoin. Maybe it's, like, fifty fifty between Bitcoin and AI. [00:08:47] S1: Is that because the risk profile has changed, and also there's not as much upside as... On the Bitcoin train?
00:08:47 · Polina Pompliano, Anthony Pompliano
[00:08:47] S1: Is that because the risk profile has changed, and also there's not as much upside as... On the Bitcoin train? [00:08:52] S0: Yeah. I look at... Again, I I continue to say this, and I think that people almost think that it's like some, like, trite, you know, phrase. I look at AI is offense. Bitcoin is defense. I used to look at Bitcoin as offense. It was a thing that at, you know, a thousand bucks, $3,000, what... Whatever. The bottom of the 2018 market, as I've talked about plenty publicly, I looked at it as there is a generational wealth opportunity to buy an asset that had dropped 85%, and I didn't think anything had changed about the asset. And I was like, thank you very much. 85% discount at the store. How much can I buy? And then I kept buying and kept buying and kept buying. That was wealth generation. I still think that Bitcoin can generate a lot of wealth, but it is going to do it in a much more linear fashion at the... Compared to the asymmetry that we used to see. And you just look. Bitcoin went from 1,000 to 20,000 in 2017. Twenty x. It then dropped 85%, and then it went from $3,000 to $69,000. So if you go back to 2017 and you look at... It went from 1,000 to 20,000, dropped down to 3,000. Then it went from 3,000 to 69,000. Right? Then it dropped down to $15.16 k. Then it went from there to a 125 k. The returns are compressing. Yep. But who doesn't wanna see an asset in two years go from fifteen, sixteen thousand dollars to a 125,000? Are we really gonna complain?
00:08:52 · Anthony Pompliano, Polina Pompliano
[00:08:52] S0: Yeah. I look at... Again, I I continue to say this, and I think that people almost think that it's like some, like, trite, you know, phrase. I look at AI is offense. Bitcoin is defense. I used to look at Bitcoin as offense. It was a thing that at, you know, a thousand bucks, $3,000, what... Whatever. The bottom of the 2018 market, as I've talked about plenty publicly, I looked at it as there is a generational wealth opportunity to buy an asset that had dropped 85%, and I didn't think anything had changed about the asset. And I was like, thank you very much. 85% discount at the store. How much can I buy? And then I kept buying and kept buying and kept buying. That was wealth generation. I still think that Bitcoin can generate a lot of wealth, but it is going to do it in a much more linear fashion at the... Compared to the asymmetry that we used to see. And you just look. Bitcoin went from 1,000 to 20,000 in 2017. Twenty x. It then dropped 85%, and then it went from $3,000 to $69,000. So if you go back to 2017 and you look at... It went from 1,000 to 20,000, dropped down to 3,000. Then it went from 3,000 to 69,000. Right? Then it dropped down to $15.16 k. Then it went from there to a 125 k. The returns are compressing. Yep. But who doesn't wanna see an asset in two years go from fifteen, sixteen thousand dollars to a 125,000? Are we really gonna complain? [00:10:18] S1: I I know I've said this before, but I've seen Bitcoin drop to 2 k, and it dropping to under 80 k cannot scare me because I have perspective.
00:10:30 · Anthony Pompliano
[00:10:30] S0: Of course. But it's also... Bitcoin is the risky... Bitcoin is the least risky that it has been in years right now in my opinion. Why? The Lindy effect, the longer it's around, the more likely it is to persist. Hash rate, the adoption, the institutionalization and financialization of Bitcoin by Wall Street, the clearer regulatory environment. I'm not gonna go through thing after thing after thing. So if it is less risky than it was five or ten years ago, you should expect a lower return going forward. By the way, though, lower return does not mean no return. Lower return just means it used to go up a 100% a year. Maybe it goes up 30% a year now on a compounded basis. Well, the stock market is gonna do 10 to 15%, so you're gonna outperform the stock market most likely with Bitcoin compared to equities. Doesn't mean that you don't want equities. It just means that maybe Bitcoin's gonna outperform the indexes. And so if you have core Bitcoin exposure, plus you add in some of the AI stocks that you want exposure to or you wanna make private investments that you think can outperform Bitcoin, that's how you gotta put together a portfolio. But you also have to understand what is your risk profile, and how do you wanna put that portfolio together, and where does Bitcoin fit into it. Yeah. Today's episode is brought to you by Figure. If you're into Bitcoin, you already know. Selling is the last thing you want to do. But at the same time, life happens, man. Opportunities arise, bills come up, and markets move. That's where Figure comes in. Instead of selling your Bitcoin, Figure lets you borrow against it so you can get cash without losing your position and may also avoid triggering a tax event. Right now, their loans are around 8.91% interest. That's 9.9% APR at a 50% loan to value. So you keep your upside but still get liquidity. And I know the first question people ask is, yeah, but is it safe? It's a good question. Figure uses MPC custody, which basically means your Bitcoin stays in its own segregated wallet. It's not being lent out, pooled, or sitting on some exchange. They also have optional liquidation protection, which helps if the market gets volatile. And if you're on the other side, like you've got cash and you want a yield, they've got something called democratized prime.
00:12:35 · Anthony Pompliano
It's earning up to 9% APY, paid hourly, and it's backed by real world assets, not just token inflation. So whether you try to hold your Bitcoin long term or actually put capital to work, it's a pretty interesting setup. If you wanna check it out, I've got a link in the description that you can go to, or you can go to figuremarkets.co/pump. Every person listening to this show, you probably own Bitcoin and you got it the same way. You paid full price on an exchange. But there's a smaller group of business owners, family offices, and investors with sharp CPAs, and they're quietly getting theirs a very different way. They own the machines that make it, mining. Here's how it works. You buy the miners, and Simple Mining hosts and runs them at their facilities in Iowa on industrial power rates that you can never get on your own. The Bitcoin they mine goes straight from your machine to your wallet. There's two reasons I find this interesting right now. One, the economics. Cheap power lets you convert electricity into Bitcoin at a discount to spot. You're acquiring the asset below the sticker price that everyone else pays. But second, and listen closely, you've got a big income here. Miners are classified as computer equipment. Equipment means depreciation. Qualifying buyers can write off the entire purchase in year one. It's the same playbook real estate investors have run for decades, pointed at Bitcoin. Your CPA will want to see this before the end of the year, and so with attractive financing available, you can deploy these assets without selling any of your assets to do it. This is not some garage operation. Simple Mining runs over 40,000 machines and was just ranked the fastest growing company in Iowa on the Inc. 5,000. They put together a valuable resource called the twenty twenty six Bitcoin Mining Blueprint. It covers the five mistakes investors make when allocating to mining and how to avoid them before deploying capital. You can access it for free at simplemining.io/pump. That's simplemining.io/pump. Go check it out today.