The Pomp Letter

To investors, Bitcoin critiques have been proposing the idea of a government ban for the digital currency over the last decade. Their argument is that bitcoin threatens the US dollar or other fiat currencies, so governments around the world will intervene to stop the adoption of the asset. Most critics are willing to admit that it is unlikely that governments, militaries, or central banks could ac...

To investors, The phrase “Web3” has taken the technology world by storm. It is used to describe the next iteration of the internet, which includes the belief of Web3 proponents that decentralized protocols and tokens will be core features of a new system. There are thousands of entrepreneurs and investors betting their time, money and energy that this new iteration will be the future of technology...

To investors, It is no secret that Turkey is experiencing painfully high levels of inflation right now. Economists’ expectations for inflation numbers in December are just over 30%, which includes estimations that range from 26% to 37%. Regardless of where the number officially ends up, the inflation that Turkish citizens are dealing with is hard to comprehend for investors in the developed, weste...

To investors, The global financial markets are obsessively watching what the Federal Reserve is going to do with interest rates in the coming months. Based on the most recent FOMC meeting, Fed Chairman Jerome Powell has signaled that the Fed is likely to hike interest rates approximately three times in 2022. I don’t want to spend our time together this morning debating whether the Fed will actuall...

To investors, There has been immense scrutiny on the Federal Reserve and central banks around the world over the last 18 months. Everyone from investors to business owners to retirees are trying to figure out what the central banks will do with interest rates and asset purchases, so they can better prepare their portfolios for the future. It is easy to get lost in the day-to-day drama of what the...

To investors, We have all heard Albert Einstein’s famous quote that “compounding is the eighth wonder of the world” and “he who understands it, earns it; he who doesn't, pays for it.” This concept sounds great as a theory, but there is something incredible when you actually see it play out in reality. The most recent example is when I saw Garry Tan tweet this excerpt from The Psychology of Money a...

To investors, There was an article in the Financial Times recently that discussed market cycles, sell-offs, and investor risks. My friend Josh Wolfe from Lux Capital shared it on Twitter with a fairly sober warning that most young investors haven’t experienced a market downturn. Here is the article and the tweet: This got me thinking — has the generation of 35 year olds and younger actually never...

To investors, Bitcoin’s on-chain distribution continues to become more decentralized over time. We can explicitly prove this claim by looking at the on-chain metrics, which offer unique insight into the amount of bitcoin that is held by each individual bitcoin address. First, let’s take a look at the largest holders of bitcoin on-chain. We can see that the number of bitcoin addresses with at least...

To investors, I thought it would be fun to assemble the most breathtaking photos that I could find related to bitcoin mining as we head into Thanksgiving here in the United States. The bitcoin miners spend immense time, effort, and capital to help secure the world’s strongest computer network. Here are some visualizations of their work: These are two Bloomberg photographs from inside Bitriver, the...

To investors, The President of El Salvador announced on Saturday night that he was planning to build the world’s first “Bitcoin city,” which would live at the foot of a volcano in his country. There is a lot to unpack here. Before we get into the details though, it is important to remember what El Salvador and President Bukele have already accomplished. The country announced in June at the Bitcoin...

To investors, Financial markets have been on a tear for the last 12 months. Everything in your portfolio appears to be going up at an exciting rate. If I were to ask each of you the performance of your portfolio, you would quote me a percentage increase on a nominal basis. If I then asked you for the real rate of return, you would take the nominal number and subtract 6%+ inflation to get the real...

To investors, Last week, I told the limited partners at Pomp Investments that I would be returning all outside capital at the end of the year and would be converting my investment activities into a family office. The response to this communication was incredibly powerful so I figured that I should share the decision publicly. No matter your occupation or life goals, my hope is that the letter belo...

To investors, I was talking to a friend recently about the various investment opportunities in the crypto industry. He kept explaining how much exposure he had to publicly traded stocks, so I asked my friends at Bitwise to do an analysis on that piece of the market. Below is their write-up. Really fascinating stuff. Crypto assets are the best returning asset class over the past one, three, and fiv...

To investors, There are many deeply held beliefs in the bitcoin and crypto industry that get repeated over and over again. One that I have always found peculiar is that “[Fill in the blank] is merely an attempt to get more bitcoin.” The argument is presented as a negative swipe at anyone who is buying, holding, or creating any investment assets outside of bitcoin. Before we dig deeply into this pe...

To investors, Jack Dorsey sent the tweet heard ‘round the world on Friday night. He explicitly called out hyperinflation, which has been historically considered an off-limits topic for executives and politicians in developed nations. As you would expect in today’s internet age, everyone started to pile in and call Jack Dorsey uninformed, stupid, irresponsible, and much more. No one topped this one...

To investors, It was confirmed yesterday that the Houston Firefighters Pension Fund has officially become the first pension fund in the United States to purchase, and directly hold, bitcoin in their portfolio. As many of you will remember, two public pension funds from Fairfax County in Virginia previously invested in the first two Morgan Creek Digital funds. They were the first public pension fun...

To investors, The best entrepreneurs and investors seek efficiency. They are in a constant search for how they can do more with less resources. You see this in capital allocation decisions, supply chains, headcount, and strategic efforts. Invest the least amount of resources to get the highest amount of impact. One of the biggest arbitrage opportunities in this pursuit is for an individual or enti...

To investors, Bitcoin is knocking on the door of a new all-time high in US dollar price as I begin to write this letter. The market structure for the asset has been quite clear for months now. The long-term, strong hands were accumulating as much bitcoin as they possibly could, while short-term, weak hands were selling their bitcoin. Approximately 85% of all bitcoin in circulation has not moved in...

This installment of The Pomp Letter is free for everyone. I send this email to our investors daily. If you would also like to receive it every morning, join the 190,000 other investors today. To investors, Bloomberg reported last night that insiders have confirmed the SEC will not oppose the Bitcoin Futures ETF applications that are set to begin trading on Monday. This led to a short term price ap...

To investors, The Head of the Bank of International Settlement Innovation Hub, Benoît Cœuré, gave a speech yesterday at the 23rd Geneva Conference on the World Economy . The speech was titled “Finance disrupted” and contained a number of interesting insights into how central banks are thinking about new digital technologies.  The main theme of the speech is that disruption is upon us. Cœuré opened...

To investors,  I set a goal earlier this year of helping 10,000 people leave their legacy jobs and get a new job within the bitcoin and crypto industry. That may seem like a big number initially, but we were able to create and launch a company that is well on the way to accomplishing that goal. Below is a guest post from CEO Colton Sakamoto on how we are training thousands of people this year to m...

To investors, We discussed last week the issues related to China’s decision to emphasize their existing ban on bitcoin and cryptocurrencies. This ban has manifested itself in multiple ways, including kicking miners out of the country, outlawing cryptocurrency transactions, and recently blocking access to various crypto websites that show asset prices and charts. There has been plenty of speculatio...

To investors, I hope each of you had a great weekend. At the end of last week, I saw a chart that really confused me. It showed the difference between the CPI Rent Index and the Zillow Rent Index. These numbers show that Zillow is estimating rents are increasing about 5.5% to 6% annually right now. The CPI Rent Index is showing just under 2% rent growth. The confusing part of this was that the two...

To investors, The NFT industry has exploded in popularity this year. There was more than $2.5 billion in sales volume during the first half of 2021 and it has only accelerated since then. Here you can see the weekly NFT buyers through the end of June consisted of both primary and secondary market participants. And this chart shows that NFT sales had hit a record high in Q2 of 2021. But all records...

To investors, Below is a guest post overview of the Lightning Network from Mitch Klee. You can follow him on Twitter by clicking here . Lightning network has been on track to change the game for Bitcoin. Drafted in 2015 and launched in 2018 by lightning labs , the lightning network has made leaps and bounds for Bitcoin in multiple areas, some of which are still yet to come. Using native smart cont...