Morgan Creek Digital co-founder Anthony Pompliano received a verbal beating for disclosing that 50% of his portfolio is in Bitcoin. Question is…is his lack of diversification a bad thing?
Is Pomp Crazy?
Earlier this week, Anthony Pompliano participated in a CNBC Squawk Box panel which discussed macro-economics and its impact on Bitcoin price action. One panelist asked Pompliano what percentage of his net worth was invested in Bitcoin and Pompliano resolutely said 50%.
Panelist Kevin Oleary, a well-known Canadian businessman, swiftly pounced on Pomp and administered a verbal beating, along with a quick lesson in the economics of investing.
That’s crazy, I forbid that, that’s insane, that breaches everything about diversification investing!”
O’Leary then rattled off a list of top-10 altcoins, pointing out their significant losses since 2017, then asked Pompliano, “If this is really such a great idea, when is there only one Vegas game working?”
Pompliano did his best to explain why institutional and retail investors should make an allocation for Bitcoin as it is a scarce asset that is non-correlated to traditional markets, and is also a hedge against macroeconomic instability.
Forget Altcoins, Go Bitcoin
While traditional economists, financial advisors, and market analysts are likely to agree with O’Leary’s scolding of Pompliano, a cryptocurrency analyst from Twitter swiftly came to Pompliano’s defense.
@RhythmTrader pointed out that despite a 200%+ gain from Bitcoin, 60% of Bitcoin hasn’t moved for more than a year.
This statement aligns with recent data released from CoinMetrics which also showed that Bitcoin’s ‘untouched supply’ had risen to a new high of 21.6%.
The report also observed an uptick in the origination of new Bitcoin addresses.