The Price of Stability

Here's the deal with Bitcoin (BTC) right now: it hit $126,000 in late 2025, and everyone was screaming about $150,000 by year-end. Instead, it reversed hard, dropping to $87,000 and turning negative for the year. Dreams shattered, portfolios bruised.

But according to Anthony Pompliano, founder and CEO of Professional Capital Management, this isn't just another crypto crash story. Speaking on CNBC's Squawk Box Tuesday, he explained that something fundamental has changed: volatility compression has altered the entire game.

Bitcoin's historical 70-80% drawdowns came packaged with explosive upside. Those parabolic rallies that doubled or tripled prices in months? They were the flip side of catastrophic crashes. Now that volatility has been cut in half, and the result is pretty straightforward: no more blowoff tops, but also no more wipeouts that make you question your life choices.

Matthew Sigel from VanEck broke down the math. If Bitcoin's volatility gets cut in half, you'd expect a 40% drawdown instead of 80%. That's roughly what happened when BTC dropped from $126,000 to $80,000—about 36%. The trade-off is clear: holders sacrifice the euphoric rallies, but they also avoid the 75-80% beatdowns that defined previous cycles.

Zooming Out Changes The Picture

Before you get too depressed about missing the moon, Pompliano reminded traders that Bitcoin is up 100% over two years and nearly 300% over three years. The compound annual growth rate over the past decade is 70%. The asset is still performing exceptionally well, just without the violent swings that used to dominate headlines.

Volatility compression means more institutional-friendly price action with steadier gains, smaller drawdowns, and less drama. That's excellent news for long-term holders and institutions building positions. It's frustrating, however, for traders who made fortunes timing the 80% crashes and 10x rallies. Those days appear to be fading.

The Everything Exchange War

Pompliano, an early Coinbase Global Inc. (COIN) investor, also discussed how the exchange is pivoting to become an "everything exchange" where users can trade stocks, crypto, prediction markets, and more on one platform. Robinhood Markets Inc. (HOOD) is doing the same thing.

Coinbase came from crypto, Robinhood came from brokerage, and now traditional exchanges and financial players are joining the fight. BlackRock Inc. (BLK) CEO Larry Fink recently said AI and tokenization are the two big themes of finance going forward. Everyone is converging on the same model: 24/7 markets, everything tradeable, and AI-powered infrastructure.

Coinbase has an advantage with over 100 million users and a head start in crypto infrastructure. Traditional players, however, bring deep pockets and regulatory expertise to the table. The competition will be cutthroat, but ultimately the winner is retail through lower fees, faster execution, and better pricing.

Offense and Defense

Pompliano laid out his thesis for the next cycle, and it's pretty compelling. AI agents will serve as offense, going out and making money for companies by automating tasks and eventually replacing jobs. Then companies will take that capital and deploy it into crypto as defense—Bitcoin, stablecoins, and tokenized gold to protect purchasing power on their balance sheets.

According to Pompliano, this combination of AI driving revenue and crypto preserving value is where finance is headed. Both startups and large firms like BlackRock are already moving in this direction.

What Comes Next

Bitcoin's lack of a clear catalyst means the market is range-bound. There's no major regulatory breakthrough on the horizon, no new ETF wave, and no sovereign buying frenzy to push prices higher.

Pompliano thinks the compressed volatility means Bitcoin will grind rather than explode. That could mean a slow climb back toward $100,000-$120,000 over several months. Alternatively, it could mean more consolidation in the $80,000-$90,000 range.

The key question is whether the 40% drawdown holds, or if something breaks and forces Bitcoin lower. If volatility stays compressed, $80,000 should act as the floor. If volatility spikes again, though, all bets are off. Welcome to the new normal—less exciting, maybe, but also less terrifying.