Anthony Pompliano: Libra is "incredibly positive for Bitcoin"

20 Jun, 2019
by Will Heasman
Opinion
Anthony Pompliano: Libra is incredibly positive for Bitcoin

A great debate is currently taking place within all corners of the cryptocurrency community, this debate centers around a singular question: Is Libra good, or bad for Bitcoin? Facebook’s entry to the cryptocurrency sector has been met with both excitement and apprehension, and now Anthony “Pomp” Pompliano, crypto podcaster and partner at Morgan Creek Capital has thrown his two cents down, suggesting that Libra will actually be “incredibly positive for Bitcoin…”

Within his latest newsletter, Pomp noted this raging debate currently ongoing within the industry, suggesting that the recent release of the Libra whitepaper was a catalyst for doomsayers to call the death of Bitcoin, XRP and other such notable cryptocurrencies. However, Pomp calls this notion “intellectually lazy,” instead, offering up a different model to asses the viable future of these assets. 

Token Density Theory 

To explain the model, Pomp analogizes a scenario:

“At first you have a single restaurant (Restaurant A). That restaurant is growing their business nicely and everything seems to be going well. Eventually, rumors spread that a new restaurant is going to open across the street. The owners of Restaurant A start to get nervous because they’re going to have competition.”

Continuing the analogy, Pomp relays that restaurant B does indeed open up, leaving restaurant A unaffected, however soon, restaurant C, D, and E all open up – leaving Restaurant A more worried than ever.

Regardless of the increased competition, restaurant A doesn’t lose revenue, in fact, it gains it…

According to Pomp, this phenomenon is due to the simple fact that density drives demand.

“In the restaurant example, more and more people flock to the intersection when they are hungry because they know there are multiple options available for food. The intersection eventually becomes known as the location where ‘all the restaurants are.’”

The same is happening within the crypto market, says Pomp, adding that a new desirable token within the crypto ecosystem has an “additive effect” on the market.

Refocusing on Libra coin, Pomp suggests that based on Token Density Theory Libra will bring more investors into the market, rather than steal investors away:

“Based on the Token Density Theory, Libra is likely to create an influx of users for Bitcoin and other tokens if it successfully launches. Additionally, it wouldn’t be surprising to see other large technology companies create their own tokens, which would further increase the positive effect on existing tokens.”

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