Bitcoin enthusiasts are familiar with significant market drops; however, many Wall Street investors may find themselves unprepared for such fluctuations. According to crypto expert Anthony Pompliano, Bitcoin experiences substantial price declines approximately every 1.5 years—an expectation that seasoned crypto investors understand.

“Over the last decade, Bitcoin has drawn down 30% or more 21 different times,” said Pompliano.

“So Bitcoiners are used to this. Now, who’s not used to this are the people who are coming from Wall Street. They’re not used to this type of volatility.”

These new investors demonstrate significant apprehension, particularly as the year draws to a close, especially regarding their bonuses and whether they should offload assets they initially found appealing.

Bitcoin Sell-off Primarily US-Based

Matthew Sigel, who directs digital assets research at VanEck, noted that the recent dip in Bitcoin prices, which hit around $82,000, was predominantly a US-driven event. He attributes this to tightening liquidity and expanding credit spreads, intensified by concerns related to major capital investments in AI amidst a delicate funding environment.

Crypto Volatility as a Growth Indicator

Bitcoin’s price volatility has surged recently, nearing 60, which can trigger significant market movements, both up and down. Pompliano highlighted this volatility as an essential indicator of the cryptocurrency’s market health.

“It’s not a negative. I would be worried if Bitcoin’s volatility essentially was zero. You need volatility for the asset to go up.”

He acknowledges Bitcoin’s remarkable growth over the past decade, predicting ongoing strong performance in the years to come, provided it maintains a compound annual growth rate of around 20-35%.