This year is coming to its end, and, naturally, it’s time to wonder what’s the next big thing in the world of Bitcoin.
CryptoPotato had the chance to meet and talk with one of Bitcoin’s most famous proponents and industry experts, Anthony ‘Pomp’ Pompliano, co-founder and managing partner at the venture capital fund Morgan Creek Capital.
An ongoing argument among the crypto community and regulators is the ‘blockchain, not Bitcoin’ narrative. This is particularly prevalent in China, where the government supports the development of blockchain-based technologies but outlaws the usage, storage, or trade of cryptocurrencies.
According to Pompliano, the gamechanger here is simply time: “I think that everyone comes into the industry and they usually do it through Bitcoin. They hear about it, start looking at it, and then there’s the evolution.” Pompliano said.
“They go and check enterprise blockchain, check out tokenized securities, DeFi, but pretty much everyone comes back to Bitcoin. Now, that journey may take six months, 12 months, or 18 months, but I think the best thing for Bitcoin is time.
It takes time for people to get familiar with it, to start using it, to understand why it’s crucial. I think that’s going to happen at the government level, the private level, and the institutional level. So it’s just the time needed for people to get more familiar with it.”
It’s becoming rather evident that a lot of marquee companies, as well as financial and even governmental institutions are turning their sights to blockchain-based technologies.
Most recently, Agustin Carstens, the General Manager of the Bank of International Settlements (BIS), urged central banks to begin embracing digital money.
“A great use case for blockchain is triple-entry accounting. Single-entry accounting was replaced by double-entry accounting. It’s pretty much true of all transactions and accounting for the last hundreds if not thousands of years,” Pompliano said.
“In that sense, I think the invention of triple-entry accounting is going to be huge for human development, and blockchain is a great way to do that in an automated fashion. We just announced that we led a series C funding for a company called Figure Technologies.
In that system, basically, what happens is, they created a digital mortgage, and the way that they transact with other people on Wall Street is through a decentralized settlement system. It’s triple-entry accounting that’s presiding over those transactions, so you don’t have a centralized party to do transactions.”
And yes, we couldn’t skip the most interesting question regarding the price of Bitcoin.
One of the most anticipated events in the upcoming year is the Bitcoin halving. This is the event that will slash by half the miner’s rewards for adding blocks to the network. As such, many crypto enthusiasts expect the halving to have a severe impact on Bitcoin’s price since the supply of newly minted BTC will decrease.
Basic economic principles dictate that when the supply of an asset is reduced, while the demand for it remains the same or increases, its price should go up.
This is also what Pompliano believes, and he is very confident about his price target. “The halving will be a big moment for Bitcoin. I don’t think that the price will shoot up the day after it, but I do think that from the day we are right now, we will see Bitcoin’s price at $100,000 by December 2021.”
History seems to be on his side. Back in 2012, following the first halving event, Bitcoin’s price increased by a factor of 10. After the second halving in 2016, the price surged by a massive 400%. Both rallies happened in approximately a year after the halvings.
Regarding what’s happening today around the price, Pompliano anticipates lots of volatility.
“I think that we are now in a bull market that will extend to around two years. In that period, I think Bitcoin’s price will see a lot of volatility with days spiking up 10-12% as well as 30% crashes. Generally, though, it will continue to trend upwards.”
In any case, 2020 is shaping up to be a fascinating year for Bitcoin, and it remains interesting to see whether the bull run will, indeed, extend, or if the bears will halt it preliminarily.