Anthony Pompliano Says Fed Liquidity Move Could Lift Bitcoin And Tech Stocks, But Weigh On The Dollar

In a Substack post, Pompliano stated that the return of quantitative easing is likely to leave investors “very happy,” given its historical impact on asset prices.

• The Federal Reserve surprised markets by announcing $40 billion in monthly Treasury bill purchases on Wednesday.
• Anthony Pompliano said that quantitative easing has historically redirected investors from cash to higher-risk assets.
• He noted that long-duration assets tend to outperform during liquidity expansions.

Pro Capital (BRR) CEO Anthony Pompliano said on Thursday that the Federal Reserve’s decision to restart balance-sheet expansion could set the stage for a broad rally in risk assets, including Bitcoin (BTC).

Bitcoin’s price fell nearly 3% in the last 24 hours, slipping under the $90,000 mark in midday trade. On Stocktwits, retail sentiment around the apex cryptocurrency remained in ‘neutral’ territory over the past day. 

Meanwhile, the U.S. Dollar Index (DXY) edged 0.5% lower in midday trade, with retail sentiment trending in the ‘bearish’ zone over the past day amid ‘high’ levels of chatter.

Risk Assets Stand To Gain

In a post on Substack, Pompliano wrote that periods of quantitative easing have historically lifted markets by pushing investors away from cash and toward assets that benefit from lower discount rates. 

He predicted that stocks, Bitcoin, and real estate typically outperform once policymakers increase the money supply and make borrowing cheaper. He also said the U.S. dollar and short-term cash-like instruments tend to weaken because yields fall and purchasing power erodes.

Pompliano added that long-duration assets, including tech stocks and venture-backed companies, often see the strongest response because their valuations rely heavily on future cash flows, which become more attractive when rates drop. He noted that defensive sectors, traditional value stocks, and some commodities often lag during QE cycles because investor appetite shifts toward growth.

The Technology Select Sector SPDR Fund (XLK) fell 1% in midday trade on Thursday, dragged down by Oracle’s (ORCL) most recent earnings. On Stockwits, retail sentiment around the ETF remained in ‘bullish’ territory over the past day. The iShares US Aerospace and Defense ETF (ITA), meanwhile, rose 1.7% with retail sentiment also trending in 'bullish' territory over the past day.

Fed Cut Overshadowed By Balance Sheet Move

The Federal Reserve lowered its benchmark rate by 25 basis points on Wednesday, bringing the federal funds range to 3.50%–3.75%. The decision included three dissents, including two officials who supported no change and Fed Governor Stephen Miran, who preferred a deeper 50-basis-point cut.

The rate move was widely expected on Wall Street. The unexpected development was the central bank’s plan to resume balance-sheet expansion by purchasing $40 billion in monthly Treasury bills, marking a return to asset accumulation after months of quantitative tightening.

Investors Position For A ‘Liquidity Wave’

Pompliano said the renewed bond-buying will likely lower yields further and push investors into higher-risk corners of the market. When the Fed increases liquidity, borrowing costs fall, confidence improves, and asset demand rises, he wrote.

He also pointed to several deflationary forces he believes are converging on the U.S. economy. According to Pompliano, trends in AI, robotics, and tariffs each carry deflationary effects on their own but together create conditions that could challenge the Fed’s ability to manage monetary policy effectively.

Overall, Pompliano stated that the return of QE is likely to leave investors “very happy,” given its historical impact on asset prices. U.S. equities were mixed in midday trade on Thursday. The SPDR S&P 500 ETF (SPY) was up 0.01%, the SPDR Dow Jones Industrial Average ETF (DIA) rose 1.27%, but the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) was down 0.67%. Retail sentiment around QQQ on Stocktwits fell into ‘extremely bearish’ territory from ‘bearish’ over the past day.

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