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Author:Anthony Pompliano, Founder and CEO of Professional Capital Management; Compiled by: Shaw Bitcoin Vision
Last week’s market sell-off spooked many investors.They couldn’t help but question:Is the stock market bull market over?Is Bitcoin Facing a 75% Plunge??Are the predictions of those doomsday pessimists finally coming true?
These are all legitimate questions.But before we can pontificate on where the future will lead, we must first analyze what is happening in the market right now.Dan Niles, founder of Niles Investment Management, gave a very insightful explanation over the weekend.He wrote:
There are two factors driving the market this year:
As interest rates have been cut again, liquidity has increased significantly.
Continued optimism about artificial intelligence has also benefited from loose financing conditions, which have facilitated the construction of debt-related capital expenditures.
Recently, these two pillars of the market have been called into question:
It seems difficult to say whether the Fed can cut interest rates on December 10. Even if it does, at least four or more Fed officials may oppose it.
OpenAI’s mention of government support has forced investors to question whether the company, which is on track to hit $20 billion in revenue this year, can fund $1.4 trillion in infrastructure commitments.
The above situation has led to overvaluation of the overall market, especially the overvaluation of some highly speculative industry sectors that rely on easy funds, and is now being questioned.
As a result, the S&P 500 rose 0.1% last week, while the Big Seven fell 1.1%, and my AI index fell 3.2% on the above concerns.The Russell 2000 fell 1.8%, with more than a third of its constituents in the red and more reliant on loose market conditions.
Dan Niles’ point about investors questioning the future is hard to argue with.You can see changes in market sentiment in real time online, and market prices are signals that don’t lie.
The White House and the Trump administration will not stand idly by by those who spread fear.White House economic adviser Kevin Hassett was a guest on ABC and explained how the current government’s new economic policies actually help the American people:
“During the Biden administration, people’s purchasing power fell by about $3,000 because wage increases failed to keep up with price increases. Under the Trump administration, purchasing power has increased by about $1,200. We understand that people are still hurting from high prices, but we are quickly closing the gap.”
U.S. Treasury Secretary Scott Bessent believes that purchasing power is about to see a greater increase.He recently explained on TV that the actual purchasing power of American citizens will “increase significantly” in the first half of 2026.
Energy prices have fallen, and so have interest rates.These are important facts when evaluating the economic policies pursued by Bessent, Trump, Hassett and others.But my favorite thing about Bessant’s speech was his promise not to tell the American people how they really feel.
I remember when several hosts of the All-In podcast interviewed Bessant earlier this year and asked him if he believed official economic data.Bessant replied “no.”But more importantly, he explained that over the past few years, the data has reflected one set of circumstances, but the actual feelings of the American people have been completely different.
Who would you believe in this situation?Will you listen to the data or the public opinion?
Take Ritholtz’s Ben Carlson.He wrote an article titled “What if things are better than they seem?””Wonderful article.In the article, Carlson points out the following data points:
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Fifty-four percent of Americans making between $30,000 and $80,000 a year now have taxable brokerage accounts, and half of them have entered the stock market within the past five years.
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Robinhood has approximately 25 million customers.Half of them opened securities accounts for the first time.
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Nearly 40% of 25-year-olds now have an investment account, up from just 6% in 2015.
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Households with incomes below the median now account for one-third of JPMorgan’s clients who transfer money to investment accounts, up from 20% in the 2010s.
We have moved from housing as our largest investment to the stock market.Just look at the growth in stock holdings among people under 40:
My biggest takeaway, besides this stunning chart showing a whopping 300% increase since 2020, is that the data itself may not matter.People are suffering.Food prices are too high, electricity bills are too high, and rents and housing prices aren’t much better.The situation is so bad that the New York Times recently published an opinion piece calling for price controls on a variety of products and services.
There is madness everywhere.
But let’s get back to investment assets.These woes in the regular economy are unlikely to weigh on stock prices.Businesses create more profits with fewer employees.Their productivity, efficiency and value are increasing.You can fake forecasts, but you can’t fake 30% year-over-year growth for a trillion-dollar company.
As far as Bitcoin is concerned, the Fear and Greed Index has remained at 10 for two days in a row.
This situation is very rare.Quinten Francois demonstrates average performance when the Fear and Greed Index drops below 20:
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1 day +0.9%
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1 week +5.2%
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1 month +19.9%
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3 months +62.4%
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6 months +48.5%”
So what happens in the future?No one knows.But the data shows thatThe recent market volatility is unlikely to be the beginning of a severe recession or market collapse across all asset classes.Prices for certain sectors or assets may be lower for longer, but the global bull market continues.
The challenge for investors in the future is thatHow to tell if their portfolio is optimized for long-term returns.If you focus too much on short-term price fluctuations, you may be holding the wrong assets or have the wrong investment strategy.Of course, leverage can wipe out even the best investors.
So I suggest everyone take a deep breath and relax.If you take the long view, everything will be fine.
