2021-12-29 21:48 |
Anthony Pompliano, a renowned Bitcoin (BTC/USD) proponent, believes many people are thinking of BTC’s volatility the wrong way. He said this during a recent interviewing, adding that the false perception of BTC’s volatility emanates from rampant dollar printing.
Reportedly, Pompliano believes using the dollar to measure BTC is a flawed way of trying to determine the flagship cryptocurrency’s value. He said this in response to a question by Joe Kernen from CNBC Squawk Box.
Specifically, Kernen asked Pompliano whether BTC investors want stability to the point where BTC becomes a useable asset in applications such as payments.
Pompliano rephrased Kernen’s question to demonstrate a misconception that has seen many people measure BTC’s value in dollars. He said BTC’s value should be measured against BTC.
Explaining why using the dollar to measure BTC’s value is a flawed formula, Pompliano said,
The dollar itself is hyper volatile as well. We just don’t think of that because all of the goods and services around us are priced in dollars.
He added that this method becomes less effective after considering the Federal Reserve printed 40% of the dollars in circulation over the past 18 to 24 months. According to him, this rapid note printing means the dollar has been losing value at an incredible rate since the onset of the COVID pandemic.
According to a report, the Fed printed 80% of the dollars in existence over the past 22 months. This revelation means the dollar is losing its value faster than Pompliano’s estimates.
BTC’s volatility is neither bad nor goodNonetheless, he admitted that BTC has been highly volatile when compared to the US dollar. Still, he argued that this has always been the case, noting that the coin has suffered two 50% plus plunges over the past two years. Pompliano further noted that the BTC market has experienced over six 20% plus drawdowns this year.
However, he claimed that the volatility in BTC’s market is neither good nor bad. According to him, people either like or like BTC’s volatility, depending on their position.
He further elaborated that,
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 post Anthony Pompliano says people are thinking about BTC’s volatility the wrong way appeared first on Invezz.
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