Prominent venture capitalist Anthony Pompliano is one of the cofounders of Reflexivity Research, along with prominent cryptocurrency analyst Will Clemente III. He took to the social media platform X to share his thoughts on the near future of Bitcoin, given that he keeps hearing from the community that the cryptocurrency is about to crash during a prolonged recession.
Should history repeat what happened three years ago, the expert stated his expectations for Bitcoin to show a V-shaped rebound and provided a clear explanation for his disagreement.
Liquidity spike likely to happen, analyst says
As a “risk on asset,” analyst William Clemente III, who rose to fame on Twitter in 2021 following the release of his research on Bitcoin, gave an explanation for why he disagrees with the general consensus that Bitcoin will likely crash during a protracted recession. Clemente III now has nearly 700,000 followers.
The main argument put out by these negative forecasters is that the decline in Bitcoin in December 2021 validates their prediction of an impending BTC crash.
https://x.com/WClementeIII/status/1726708275087810833?s=20
According to the researcher, Bitcoin acts as a “hedge against monetary debasement,” rising when liquidity starts to fall and falling when it starts to rise.
Since Clemente thinks that the maximum monetary tightening has already occurred and that inflation is presently declining gradually, liquidity is probably going to start increasing. He emphasises that a recession would be further evidence of an impending surge in liquidity.
Clemente went on to say that “Bitcoin does not have cash flows and therefore is not tied to the economy necessarily, as again, it’s historically tied to liquidity.”
“V-shaped recovery for BTC” may be on horizon
The expert believes that Bitcoin will see a V-shaped rebound in the near future because he anticipates a severe credit crisis that might occur similarly to what happened in March 2020, when the epidemic struck; at that time, Bitcoin temporarily fell below $4,000 and crude oil fell below zero.
In the near term, money would flow into USD/treasuries in this scenario, which would differ from the protracted recession that some people are now discussing (those who predict a sharp decline in Bitcoin prices): “A large infusion of liquidity would be required in the case of such a catastrophe. For Bitcoin, this would be a V-shaped recovery.”
As of this writing, Bitcoin, the cryptocurrency with the greatest market capitalization worldwide, is trading at $37,344 on the Binance platform.
