Bitcoin Hedge Argument Growing Stronger With Time, Says Pomp

The expert expressed a growing assurance in this concept of Bitcoin as a global hedge as supporting evidence continues to present itself. “The more data you get, the more that you can believe something”, he added.

Anthony Pompliano, Co-Founder of digital asset management company Morgan Creek Digital, said his view of Bitcoin as a global hedge has solidified over time.

“I think it’s always been part of the conversation”, Pompliano told Cointelegraph in a Jan. 30 interview on his notion of Bitcoin as a traditional market hedge over the years.

Bitcoin acts differently from traditional assets

In past years, Pompliano has gone on the record multiple times with the view that Bitcoin is a non-correlated asset – meaning the asset does not necessarily rise and fall with the rest of the traditional market.

The Morgan Creek co-founder expressed this sentiment to CNBC in an August 2019 interview, as Bitcoin rose in price amid a period of economic uncertainty.

Pompliano’s view hasn’t changed

As the crypto space matures, its related trends and market behaviors also change. Pompliano, however, has not changed his stance on Bitcoin as a non-correlated asset. “I don’t think that my opinion has changed at all”, Pompliano said, adding:

“The most important part of Bitcoin, when it comes to the global hedge, is the fact that it’s a non-correlated asset – meaning that, as stocks go up or down, Bitcoin doesn’t have correlation to that.”

Mentioning May 2019 as an example, Pompliano said Bitcoin’s price even moved in the opposite direction of the traditional market’s S&P 500 index, as well as gold, amid trade wars and other worldwide market instability. Pompliano called this a negative-correlation for Bitcoin.

“When you look at that correlation, that becomes really important as that kind of global hedge of instability”, he explained. “It’s a way for investors to diversify their wealth and add a layer of protection that, without Bitcoin, they don’t get elsewhere.”

Bitcoin reportedly accounts for 50% of Pompliano’s capital, according to an interview with Cointelegraph in July 2019.

Open Positions in Bakkt’s Bitcoin Futures Jump to Record Highs

While bitcoin hit fresh three-month highs on Wednesday, open interest in monthly bitcoin futures on the Intercontinental Exchange’s (ICE) Bakkt platform jumped to record highs.Open interest, or the number of open futures contracts, rose to $13 million, surpassing the previous record high of $12 million reached on Feb. 3, according to data analytics firm Skew.

Open interest has risen sharply, by 13.6 percent from $5.5 million to $13 million over the past two weeks. Open positions on the Chicago Mercantile Exchange’s bitcoin futures also jumped to a five-month high of $249 million on Wednesday – up 34.5 percent from $185 million seen two weeks ago.

Bitcoin’s price has risen by 19 percent since Jan. 24. The cryptocurrency printed a high of $9,775 on Wednesday, a level last seen on Oct. 28.

Analysts keep track of changes in open interest to gauge the strength of price moves.

An uptick in price along with a rise in open interest indicates there is strength behind the move higher. A trend is said to be lacking substance when the two metrics move in opposite directions.

Meanwhile, trading volumes in Bakkt futures have been in a declining trend since hitting a record high of over $44 million, or 6,601 BTC, on Dec. 18.

As of Feb. 5, trading volume was $27 million, of which $16 million came from the physically settled futures.

Volumes on CME, however, have held strong, with seven sessions in the last two weeks registering more than $500 million volume, as noted by Skew.

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