Investor Anthony Pompliano (Pomp) encourages Bitcoin holders that volatility is normal, neither positive nor negative.
In a recent interview about CNBC’s Squawk Box, moderator Joe Kernen asked whether investors want Bitcoin stable enough that it is a usable asset, for example for trading purposes. Payment term or not, Pompliano has show The answer, to prove the assumption that using dollars to measure bitcoin’s volatility is flawed, is “a bitcoin is always equal to a bitcoin”.
Bitcoin is undeniably volatile
In response to Kernen’s question about the influence of volatility on usability, Pompliano was quick to mention that volatility depends on the position held. And positions can change volatility.
The volatility cannot be judged as good or bad. Basically, volatility is only bad if it affects you negatively because if you buy an asset and the price goes down you don’t like volatility, while if you buy an asset and it goes up, you don’t like volatility, you love volatility. “
However, Pompliano admits that Bitcoin is always very volatile in US dollars.
“In the last two years there have been two price cuts of over 50%. This year there were more than six discounts over 20%. “
The problem here is that volatility is measured in dollars. And since it is a highly volatile asset, the use of dollars to measure bitcoin’s volatility is flawed.
One reason people overlook this is that dollars (or fiat money in general) are present in our daily lives.
“The dollar itself is also very volatile. We don’t think about it because all the goods and services around us are in dollars. “
Pomp says things are getting worse as 40% of the existing dollars were printed in the past 18-24 months. That is, the dollar has depreciated astonishingly since the beginning of the Covid-19 pandemic.
one article of tech startups claims that 80% of all existing dollars have been printed as of January 2020. So the currency devaluation is even worse than Pompliano says.
For the reasons stated above, the dollar is a bad denomination when used to measure Bitcoin’s volatility.
Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews