Anthony Pompliano, Founder & CEO of Professional Capital Management, says Bitcoin holders routinely face the same magnitude of market crashes that shake traditional finance once in a generation. The difference: Bitcoin investors experience these drops every 18 months.
What Happened: Market Correction Analysis
Pompliano detailed Bitcoin's correction history during a CNBC interview, noting the cryptocurrency has experienced consistent large-scale drawdowns throughout its existence. The current pullback represents a standard pattern for long-term holders, though it has caught traditional finance investors off guard.
These institutional players entered the market without preparation for Bitcoin's characteristic volatility, particularly as year-end forces converge. Bonus season, redemptions and portfolio rebalancing create additional sell pressure during this period.
The leverage reset has already occurred, according to Pompliano, removing the threat of cascading liquidations. He continues purchasing Bitcoin and anticipates a consolidation phase before the asset resumes upward movement. Traditional finance participants face their first major test in Bitcoin's volatility cycle, while veteran holders view the current environment as routine market behavior.
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Why It Matters: Long-Term Performance
Pompliano argues the 35% drawdown aligns with Bitcoin's historical patterns rather than signaling the start of an 80% bear market decline. Volatility has decreased by half compared to previous cycles. Extreme fear readings show Bitcoin at 8 and equities at 6, indicating capitulation has likely occurred. October's liquidation wave eliminated excess leverage from the system.
Bitcoin can still generate 20% to 35% annual returns over the next decade, Pompliano projects, outperforming equities despite not repeating its previous 240x rally over a ten-year period. Ethereum and Solana have not led this cycle with the same momentum they demonstrated in past euphoric peaks.
Wall Street's adoption began with Bitcoin, and Pompliano expects institutional attention to expand across other cryptocurrencies over time, though Bitcoin will maintain its position as the primary store-of-value asset.
Closing Thoughts
Pompliano's analysis frames Bitcoin's current correction as a predictable event within the cryptocurrency's established volatility pattern. The market has completed its leverage flush, positioning Bitcoin for potential consolidation before resuming growth with more sustainable annual returns than previous cycles delivered.
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