Pompliano Warns New Investors Are Driving Bitcoin Fear

Anthony Pompliano said that Bitcoin has weathered more than twenty major drawdowns in the past decade, and argued that the current slump is simply part of its historical rhythm. Meanwhile, Arthur Hayes believes the correction is nearing its end, and said that $80,000 should hold as support as the Federal Reserve prepares to halt quantitative tightening, a shift he says could reignite liquidity across risk assets. 

New Investors Are Panicking

Bitcoin’s latest bout of volatility rattled newer institutional investors, but long-time holders argue that the recent drawdown is just part of the asset’s natural rhythm. On CNBC’s Squawk Box on Monday, crypto entrepreneur Anthony Pompliano said seasoned Bitcoiners are unfazed by the correction, as the asset has experienced 30% declines more than twenty times over the past decade. According to him, Bitcoin historically undergoes a big drawdown roughly every 18 months, making the current slump well within expectations for those familiar with its market cycles.

Pompliano argued that the anxiety is coming largely from newcomers entering the space from traditional finance, where sharp swings are rare. He said many Wall Street-based investors are now grappling with year-end concerns, portfolio reviews, and bonus calculations, which may be motivating them to reduce exposure. That uncertainty, he added, contributed to the downward pressure on Bitcoin’s price as some of these investors question their initial enthusiasm.

VanEck’s head of digital asset research, Matthew Sigel, offered a similar perspective on Monday, and explained that the recent sell-off was “overwhelmingly a US-session phenomenon.” He pointed to tightening liquidity conditions in the United States and widening credit spreads as key drivers of the decline. These pressures are emerging at the same time that markets are digesting the scale of corporate capital expenditures tied to artificial intelligence, creating a more fragile funding environment.

Despite the turbulence, analysts argue that volatility is still a central feature of Bitcoin’s long-term growth. Jeff Park, a market analyst at Bitwise, said that Bitcoin’s volatility index climbed back toward 60 over the past few weeks, creating the potential for more dramatic price swings in either direction. 

Pompliano believes that volatility is not a sign of weakness but a necessary ingredient for Bitcoin’s long-term appreciation. He warned that a lack of volatility would be far more concerning because it would suggest stagnation.

Pompliano also mentioned Bitcoin’s historical performance, and pointed out that the asset has risen 240x over the past decade — equivalent to roughly a 70% annualized growth rate. While he warned that those extraordinary gains are unlikely to repeat, he believes even a more modest 20% to 35% annual growth rate over the next ten years will still allow Bitcoin to outperform equities. 

Bitcoin Will Hold $80K Support?

On the bright side, Bitcoin may be nearing the end of its correction. This is according to Arthur Hayes, the former BitMEX CEO who believes the $80,000 level will hold as a key support zone. 

Hayes argued on X that shifting US liquidity conditions could strengthen the crypto market, setting the stage for a recovery after Bitcoin’s more than 35% pullback from its all-time highs. The core of his outlook centers on the Federal Reserve’s expected move to end its current phase of quantitative tightening next month. With the Fed’s balance sheet no longer shrinking, Hayes expects fresh liquidity to flow back into markets, which will benefit both Bitcoin and risk assets. He also pointed to an uptick in US bank lending in November as another early sign that liquidity is beginning to turn.

Hayes stayed bullish throughout Bitcoin’s decline from its October peak, and repeatedly said that meaningful relief for the crypto market requires a return to quantitative easing. While he acknowledged the possibility of one more dip into the lower $80,000 range, he stuck to his belief that $80,000 should remain intact as a support level. 

BTC’s price action over the past month (Source: CoinMarketCap)

Hayes also suggested that a deeper sell-off in major US tech stocks, especially AI-related names, may be necessary before the Federal Reserve shifts decisively toward a more accommodative stance. He described the current environment as one where investors are essentially “playing for more money printing,” a condition he believes is ultimately bullish for Bitcoin.

Meanwhile, expectations surrounding the Federal Reserve’s next interest-rate decision have swung dramatically. The recent US government shutdown disrupted the flow of economic data, which fueled volatility in rate forecasts. Just a week ago, markets assigned less than a 50% probability to another December rate cut. Those odds have now surged to almost 80%, according to CME Group’s FedWatch Tool. 

This sharp shift caught the attention of economists like Mohamed El-Erian, who criticized the lack of stability in market expectations. El-Erian believes that the volatility stems from disrupted data, uncertainties around the Fed’s leadership, and the absence of a clear long-term policy framework — factors that have created an unpredictable macro backdrop for investors.