Key Highlights
- Pompliano pointed to data showing the Bitcoin Fear and Greed Index falling to 5.
- He said large asset managers are increasingly engaging with on-chain infrastructure.
American entrepreneur and crypto enthusiast Anthony Pompliano says retail investors are capitulating as Bitcoin sentiment sinks to levels rarely seen, even as institutional participation remains steady.
In a video posted on X on Thursday, the host of The Pomp Podcast pointed to data showing the Bitcoin Fear and Greed Index falling to 5, a reading below those recorded during several prior crypto market volatility.
Pompliano said, “Everyone is worried about the price of Bitcoin,” describing what he characterized as anxiety among individual holders.
Sentiment at historic lows
Citing research from Binance, Pompliano noted that the index has dropped beneath levels seen in earlier downturns. Historically, such extreme readings have aligned with periods of heavy selling and, at times, eventual price stabilization.
He argued that what stands out in the current cycle is that the broader ecosystem looks markedly different from previous bear phases. Bitcoin’s price, market structure, and adoption metrics remain structurally higher than during earlier moments when fear spiked to similar extremes.
Bitcoin stuck between liquidity levels
Bitcoin is currently trading in a narrow band around $66,000 after multiple failed attempts to reclaim the $70,000 level.
Traders are watching two nearby liquidity zones. On the upside, clusters of liquidation orders are concentrated between roughly $69,000 and $72,000, levels that could act as a short-term price magnet if momentum builds. On the downside, market participants continue to reference a CME gap in the mid-$65,000 range, an area some expect could be revisited before a decisive move higher.
Ownership shift away from individuals
Pompliano emphasized a shift in who holds Bitcoin. Over the past year, he said, supply has gradually moved from individual investors to businesses, funds, exchange-traded funds, and even governments.
Data from River Financial indicates that individuals have been net sellers, while institutional investors have been net buyers. At the same time, spot ETF assets under management have not declined in proportion to the broader market capitalization, suggesting allocations have remained comparatively stable despite volatility.
He argued that the divergence points to retail investors reacting emotionally to price swings while institutional players maintain longer-term positioning.
Schiff warns of deeper slide
Meanwhile, longtime Bitcoin skeptic Peter Schiff offered a different view, arguing that if Bitcoin breaks below $50,000, a steeper decline could follow.
In a post on X, Schiff said a move under that level would likely lead to a test of $20,000, roughly an 84% drop from Bitcoin’s all-time high. While acknowledging that similar drawdowns have occurred in previous years, he argued that today’s market involves far greater leverage, institutional exposure, and overall capitalization.
Institutions move beyond exposure
Beyond ETF allocations, Pompliano said large asset managers are increasingly engaging with on-chain infrastructure. He cited examples highlighted in Binance research, including BlackRock expanding activity tied to Uniswap and Apollo Global Management partnering with Morpho in on-chain money markets.
According to Pompliano, such moves reflect a shift from passive exposure via ETFs toward participation in governance tokens and crypto-native financial rails.
He also pointed to relative performance data, noting that indexes tracking revenue-generating crypto protocols have outperformed broader DeFi and Layer 1 benchmarks this year. This trend, he suggested, may signal early institutional positioning in segments viewed as more closely tied to financial infrastructure rather than speculative activity.
What it means
Pompliano framed the current environment as a split between short-term panic and long-term capital allocation. While retail sentiment has plunged alongside price declines, he argued that institutional investors are less reactive to volatility.
“The institutions are here,” he said, contrasting what he described as retail investors “freaking out” with larger players focused on multi-year participation in Bitcoin and digital assets.
Also Read: Why Bitcoin ETFs Lost $133M While Solana Attracted New Money
