According to noted crypto influencer Anthony Pompliano, the approval of an ETF on bitcoin in the US market will literally cause “fireworks”, similar to what the gold ETF did.
The Bitcoin ETF will create fireworks just like the Gold ETF did for gold. pic.twitter.com/klqpaAHQbT
— Pomp 🌪 (@APompliano) September 15, 2021
The first-ever gold ETP seems to be that of Central Fund of Canada, which landed on the Toronto Stock Exchange in 1966, and on the American Stock Exchange in 1986.
Pompliano and the comparison between gold and Bitcoin ETF
The first gold ETF was launched by Gold Bullion Securities in 2003 on the Australian Securities Exchange.
The following year, State Street Corporation launched SPDR Gold Shares on the New York Stock Exchange.
Taking the latter as a reference, the price of gold in those years had risen from less than $350 to more than $450, although the real boom occurred in the following two years, 2005 and 2006, with the price rocketing to more than $700 and then falling back above $600.
In October 2007 the price of gold literally soared, mainly because of the famous financial crisis linked to subprime mortgages, and this surge continued in the following years, reaching an all-time high in September 2011 at over $1,900.
From $350 in 2003 to $1,900 in 2011, the price of gold rose by almost 450% in the space of some eight and a half years, a truly historic performance for an asset whose value is commonly thought to be not very volatile.
Something even more sensational happened between August 1976 and January 1980, when the price of gold jumped from $100 to $870 (+770% in less than three and a half years), but conditions then were too different from now to take that particular boom as a benchmark.
For example, a few years earlier, US President Nixon had permanently suspended the convertibility of the dollar into gold, turning it into a fiat currency in every way.
Pompliano points out that in the 20 years preceding 2003, the price of gold had remained substantially stable, thanks also to its famously low volatility, but instead, starting in that year, it underwent a sudden and powerful surge that lasted almost nine years.
Part of this boom was undoubtedly caused by the financial crisis of 2007/2008.
The almost nine-year bullrun in the price of gold started well before the financial crisis, and in the same year that the first real gold ETF was put on the market.
This suggests that it may also be related to this event.
Most of the capital invested in gold on the financial markets is not used to buy physical gold, but to buy financial derivatives of the commodity, such as ETFs.
Biden and the aim of fighting inflation
Pompliano’s hypothesis is that something similar could happen to Bitcoin if an ETF on BTC is approved and placed on the US market.
In fact, there are already bitcoin ETFs on the Toronto Stock Exchange, and they are very successful. Their audience remains much more limited than that of BTC ETFs authorized by the SEC to be traded on US markets.
Pompliano himself then adds in another tweet that President Biden has said he intends to stop inflation through his infrastructure bill.
He then comments by saying:
“Bitcoin is going to a gazillion dollars”.
LMAO President Biden claims he is going to stop inflation and lower the cost of living with his infrastructure bill.
Bitcoin is going to a gazillion dollars.
— Pomp 🌪 (@APompliano) September 16, 2021
It should be remembered that it was Anthony Pompliano himself in March 2020 who stated that they were literally printing money precisely during the halving of bitcoin. The consequences of that decision did not take long to become apparent.