Bitcoin shouldn’t be measured in dollars, says Pompliano

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The value of bitcoin is currently measured in dollars and this is understandable given that fiat is still the most dominant form of currency. While those in the crypto space believe this isn’t going to continue for very long, it is still important to price the digital asset in fiat currency to show its value to investors.

However, millionaire investor Anthony Pompliano objected to this accepted form of bitcoin valuation. He touched on how the digital asset is valued as well as the dreaded volatility during a recent episode of CNBC’s Squawk Box.

Don’t value Bitcoin in dollars

Currently, a bitcoin is traded for around $ 51,000. This face value is derived from the dollar, which gives fiduciary value to an asset created to replace it. Pompliano says it shouldn’t be. Instead, the price of bitcoin should be in bitcoin. In this way, “a Bitcoin always equals a Bitcoin”, explains the investor.

Related reading | Billionaire Ricardo Salinas: Forget Fiat, Buy Bitcoin Instead

The value of Bitcoin, when measured in bitcoin, doesn’t really change. The deflationary asset was designed in such a way that it appreciates over time rather than depreciating, 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 daily lives. Bitcoin was never really meant to be priced in dollars, as issues that are already plaguing fiat currency could then spill over to the asset, for example, its volatility.

“The dollar itself is also hyper volatile,” Pompliano said. “We just don’t think about it because all the goods and services around us are billed in dollars. “

BTC continues its downtrend | BTCUSD on TradingView.com Volatility is good when it favors you

Speaking to host Joe Kernen, Pompliano revealed his thoughts on the volatility which is one of the hallmarks of bitcoin. This volatility has been one of the most mentioned reasons when prominent figures and governments have advised investors to avoid the digital asset, explaining that they are prone to losses due to the widely fluctuating nature of prices.

Related reading | Why Bitcoin will never exceed the market cap of gold

Pompliano doesn’t consider bitcoin’s volatility to be a bad thing, however. He explained that volatility is primarily a matter of how it affects an investor. An example of this is when the price of a digital asset rises and the investor makes gains from that movement. In this scenario, they would accept volatility as a good thing. But if the opposite happened, it would be considered a bad thing.

“Volatility is neither good nor bad, is it? Basically, volatility is only bad when it goes against you, so if you walk along an asset and it goes down you don’t like volatility, if you walk around an asset and it goes up you like it. volatility.

The millionaire also pointed out that another issue was that bitcoin’s volatility was also mentioned in dollars. Given the latter’s equally volatile and depreciating nature, Pompliano said this is an imperfect way to measure volatility.

Featured image from CoinDesk, chart from TradingView.com

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