Altcoin Founders Are Dumping Their Coins And Buying Bitcoin

To investors,

You begin thinking you have seen nearly everything that is possible after being in the bitcoin and crypto industry for nearly a decade, but every once in awhile you see something new that surprises you. That is exactly what happened yesterday when I saw a video clip of Cardano founder Charles Hoskinson talking in a recent recording.

Here is Hoskinson talking about selling his altcoins from the Cardano treasury in order to buy bitcoin:

This clip is eye-opening for a number of reasons. First, Hoskinson is essentially admitting that his altcoin will not be able to hold water compared to bitcoin over time. The only way to create long-term economic value is to sell his altcoin treasury and purchase bitcoin. This seems to signal the altcoin founders understand bitcoin is never going away.

Second, Hoskinson seems to understand that the bitcoin treasury companies are conducting a speculative attack on bitcoin. They are selling shares to buy bitcoin, so the altcoin foundations have the ability to sell their altcoins to buy bitcoin. The speculative attack, which was popularized by Pierre Rochard in 2014, has become one of the most important ideas to further the adoption of bitcoin in recent years.

Third, and maybe most interestingly, the dominant performance of bitcoin treasury companies has become too breathtaking to ignore. Take Metaplanet as an example — Simon Gerovich, Dylan LeClair and the team have created one of the best performing stocks in the world. The company has grown their bitcoin balance sheet from 0 bitcoin to 10,000 bitcoin in a little over one year. Just incredible to watch.

So imagine you are sitting on hundreds of millions of dollars in altcoins and you are watching them continue to degrade in value against bitcoin. You naturally start thinking it could be economically accretive to sell the altcoins and buy bitcoin. This is no different than selling debased US dollars or public company equity. We are watching the speculative attack permeate every corner of the financial world.

Everyone wants bitcoin and they are willing to sell whatever value they own in order to get more bitcoin. This has long been the thesis of bitcoiners — hard money ultimately sucks capital into its black hole — it is cool to see the thesis playing out globally.

And if you think bitcoin is close to toping out for this cycle, remember we still have a long way to go for bitcoin to catch up to global M2 supply. Raoul Pal recently highlighted that “89% of all BTC's price action is explained by global liquidity.”

This suggests bitcoin should see $150,000 price point in the coming months, but no one has a crystal ball so lets see what happens. Bitcoin is infiltrating Wall Street in new ways every day. People want as much of the digital asset as they can get their hands on. And a speculative attack is not a bad way to do it, especially if you are sitting on a treasury of altcoins.

Hope everyone has a great start to their week. I’ll talk to you tomorrow.

- Anthony Pompliano

Founder & CEO, Professional Capital Management

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Jordi Visser is a macro investor with over 30 years of Wall Street experience. He also writes a Substack called “VisserLabs” and puts out investing YouTube videos. In this conversation we talk about Israel, Iran, what it means for the stock market, bitcoin, oil, gold, AI stories of the week, inflation coming in weaker, and what Jordi is excited about.

Enjoy!

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