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Pompliano Predicts Bitcoin to Safeguard AI-Generated Wealth in Next Decade

Last Updated June 25, 2024 11:04 AM
Teuta Franjkovic
Last Updated June 25, 2024 11:04 AM

Key Takeaways

  • Pompliano believes Bitcoin will be the preferred asset to store wealth generated by AI.
  • AI could significantly boost global GDP, and Bitcoin can safeguard this wealth.
  • AI-driven productivity could help alleviate the US debt crisis.

According to well-known Bitcoin supporter and venture capitalist Anthony Pompliano, Bitcoin is set to become the preferred asset for preserving wealth generated by artificial intelligence (AI) over the next decade.

In a June 24 CNBC interview , the founder of Pomp Investments highlighted Bitcoin’s potential to protect the considerable wealth expected to arise from AI developments.

AI and Bitcoin are Complementary Technologies, Not Competitors

Pompliano countered the idea that AI has overtaken Bitcoin and the wider cryptocurrency sector as the latest technology trend. He suggested  that the two technologies would enhance each other in the coming years.

Pompliano pointed out that AI could greatly increase global GDP by boosting productivity, with Bitcoin acting as a safeguard to preserve this wealth. He encouraged people to look beyond short-term market fluctuations and see the long-term potential of integrating these two technologies.

He stated :

“When you see these technologies coming together, an easy way to see the intersection is what money are these machines going to use?”

Bitcoin Hits 7-Week Low Amid Market Uncertainty, Pomp Bullish on Long-Term Outlook

Bitcoin recently hit a seven-week low, with its price  falling to $59,086 on June 23, amid negative market sentiment. At the time of writing, its price was $61,171.

This downturn has been influenced by several factors, including the planned distribution of $8.5 billion worth of Bitcoin to Mt. Gox creditors and over $1 billion in net outflows from spot Bitcoin exchange-traded funds in the last ten trading days. Furthermore, significant sell-offs by Bitcoin miners have contributed to the bearish mood.

Because of these factors, the Crypto Fear and Greed Index  shows a “Fear” market sentiment with a score of 30 out of 100, down from last week’s “Greed” rating of 71.

Nevertheless, Anthony Pompliano remains optimistic . He acknowledges the current 15% price drop but points out that pullbacks of 30% or more are not unusual during bull markets, suggesting a potential rebound.

Pompliano also drew attention to historical trends, noting that Bitcoin often experiences periods of sideways trading  in the second and third quarters, especially in years when halvings occur. He anticipates another price rally, likely to take place in the last quarter of 2024 or early 2025, following patterns observed in previous halving years.

AI-Driven Productivity Boost Could Help Alleviate US Debt Crisis

In the email shared with CCN Pompliano points out that the surge in artificial intelligence is significantly enhancing the efficiency and productivity of existing companies, not just the new “AI companies” that are proliferating.

By leveraging AI internally, these organizations are able to achieve more with fewer resources or less capital. This surge in productivity could potentially lead to an increase in GDP, which Pompliano suggests might outpace the growth of the US debt based on some early data he has reviewed.

If this trend continues—though there is no certainty that it will—it could lead to a scenario where the US debt-to-GDP ratio  declines in the forthcoming months and years, a possibility that seemed unlikely less than two years ago. If realized, this GDP growth would act as a crucial relief valve for what appears to be an out-of-control debt environment.

Pompliano believes that the solution to these complex economic challenges will likely require a combination of approaches. He anticipates that stablecoins will introduce a new group of buyers for US debt , while artificial intelligence will accelerate GDP growth more rapidly than it would otherwise. He also hopes for the election of serious, responsible politicians who will strive to balance the budget.

Collaboration Key to Solving Economic Challenges

Addressing problems as complex as the US economy requires multiple solutions and collaborative efforts across various sectors—politicians from both parties, and key players from Wall Street, Silicon Valley, and Washington D.C. According to Pompliano, it is essential for everyone to work together.

Last week, analysts at Bernstein projected  that Bitcoin could reach $1 million by 2033 and expect it to hit a cycle-high of $200,000 by 2025. This optimistic forecast is fueled by significant demand from spot ETFs and Bitcoin’s limited supply. Moreover, Bernstein has revised its 2025 price target for Bitcoin from $150,000 to $200,000, suggesting it could rise to $500,000 by 2029.

Major corporate investors like MicroStrategy have reaped substantial profits from their Bitcoin investments. According to data from Saylortracker , at the current Bitcoin price of around $67,000, MicroStrategy’s holdings are valued at over $14.59 billion. This success has encouraged other public companies to consider Bitcoin for their financial reserves. For instance, Metaplanet announced in April that it would integrate Bitcoin into its treasury assets, citing several motivating factors.

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