Anthony Pompliano said recent unemployment has surged faster than the U.S. saw during the Great Depression, but what does that mean for crypto?
Morgan Creek Digital co-founder Anthony Pompliano, also known as Pomp, jumped on a YouTube livestream on July 18, talking about the current economic state and its future.
“In 1929, which was the start of the Great Depression, there was 3.1% unemployment — record low — and that unemployment jumped from 3.1% to over 8.5%, to then over 15% in the next two years,” Pomp said. “What you end up seeing is we have accelerated faster on the unemployment track than even in the Great Depression.”
April 2020 saw 14.7% unemployment in the U.S., up from 3.6% in January, according to data from Tradingeconomics.
COVID-19 caused a national upheaval
Governmental COVID-19 prevention measures took flight in March 2020, temporarily closing businesses while urging citizens to stay home. Prior to such measures and concerns, the U.S. hosted a booming economy, Pomp said.
Countless businesses temporarily closed, seeing money flow halt, while workers headed home. In the days and months following, U.S. government forces put various capital injections into play in an attempt to prop up the halted economy.
“They have inflated asset prices by pumping liquidity into the market,” Pomp said. Although the stock market has yielded a dramatic comeback since its COVID-19-related drop, the economy still remains in a state of struggle, shown by the 11.1% unemployment numbers posted in June.
Crypto is not off the hook
As much as people in the industry would like to say crypto lives outside the mainstream system, digital assets feel effects from the economy. Crypto logically might see less people investing if those people receive smaller wages — the result of unemployment.
Contrary to logic, however, crypto has performed well, rising ahead of mainstream markets. Historically, the asset has followed traditional markets at times, while travelling its own path on other occasions. Given a rising stock market, and a crypto market elevated from its 2020 low, unemployment numbers seemingly yield less impact than logic might hold, at least for now.