Bitcoin Should Not Be Measured In Dollar Terms, Says Pompliano
The value of bitcoin is currently being measured in dollar terms and this is understandable given that fiat is still the most dominant form of currency. While those in the crypto space believe this will not continue for much longer, it is still important to price the digital asset in fiat currency to show its value to investors.
However, millionaire investor Anthony Pompliano has countered against this accepted form of valuing bitcoin. He addressed the way the digital asset is valued as well as the dreaded volatility on a recent episode of CNBC’s Squawk Box.
Don’t Value Bitcoin In DollarsPresently, one bitcoin is trading for around $51K. This apparent value is derived from the dollar, which confers a fiat value upon an asset that was created to replace it. Pompliano says that this should not be so. Instead, bitcoin should be priced in bitcoin. This way, “one Bitcoin still equals one Bitcoin,” says the investor.
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Bitcoin’s value, when gauged in bitcoin, does not really change. The deflationary asset was designed in a way that it appreciates in value over time rather than depreciate, as is the case with the dollar.
However, Pompliano notes that people ignore or overlook this part because they are so used to using dollars in their everyday lives. Bitcoin was never really meant to be priced in dollars as the issues that already plague the fiat currency could then translate onto the asset, for example, its volatility.
“The dollar itself is hyper volatile as well,” said Pompliano. “We just don’t think of that because all of the goods and services around us are priced in dollars.”
BTC continues downtrend | BTCUSD on TradingView.com Volatility Is Good When It Favors YouSpeaking to host Joe Kernen, Pompliano revealed his thoughts around the volatility that is one of the hallmarks of bitcoin. Said volatility has been one of the most mentioned reasons when prominent figures and governments have advised investors to steer clear of the digital asset, explaining that they are prone to losses due to the widely fluctuating nature of the prices.
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Pompliano however does not see bitcoin’s volatility to be a bad thing. He explained that volatility is mainly a matter of how it affects an investor. An example of this is when a digital asset’s price swings upwards and the investor realizes gains from this move. In this scenario, they would accept volatility as being a good thing. But if the opposite happens, then it would be regarded as a bad thing.
“Volatility is not good or bad, right? Basically, volatility is only bad when it goes against you, so if you long an asset and it goes down you don’t like volatility, if you long an asset and it goes up, you do like volatility.”
The millionaire also pointed out that another issue was that bitcoin’s volatility was also being mentioned in dollars. Given the latter’s also volatile and depreciating nature, Pompliano said that it was a flawed way of measuring volatility.
Featured image from CoinDesk, chart from TradingView.comRead more: https://www.newsbtc.com/news/bitcoin/bitcoin-should-not-be-measured-in-dollar-terms-says-pompliano/
Text source: NewsBTC
