The former hedge-fund manager at Goldman Sachs thinks that Bitcoin’s volatile state is actually beneficial, counter-attacking the asset’s rivals.
In a recent digital event, Raoul Pal expressed his views over the unstable volatility of Bitcoin, stating that it is actually a feature of the asset which promotes the strategy of risk and reward. Pal said that the price of Bitcoin doesn’t depend on its stability compared to other different types of assets. Rather it is gradually increasing at a normal rate while also experiencing downfalls.
Pal stated that volatility shouldn’t be considered a bad thing. It does introduce doubt among traders and investors, but it eventually ends up increasing the value of the asset. If we look at the past record of Bitcoin, the asset has seen many extreme downfalls over the years but still manages to make the considerable comeback happen every single time it falls. The asset has seen a huge increase of more than 100% this year, making it one of the best-performing assets in the crypto space and overall global market in 2021. If we ask experienced crypto-traders about volatility, they think that it is normal for any asset to experience such kind of behavior because the traders are always optimistic about the digital asset, seeing it eventually increase in value.
Pal said that if the asset doesn’t see volatility, then it will not be able to generate yearly returns of the 230% it does right now, so in that case, volatility is actually considered to be beneficial for the asset to survive and compete in the market. Pal believes that the rising adoption rate of the asset will keep its price maintained, seeing the recent mass involvement of traders and investors around the world.
Ending his claim, Pal said that Bitcoin should be regulated wherever it is traded, but the regulation should be just enough that it doesn’t hurt the asset while also supporting the economy of the land where it is being traded. If we take a look at India’s ban on Bitcoin, it is actually hurting the country’s economy because it is hindering the massive trade potential of the crypto-space formed by Indian traders and investors.
Pal’s recent tweet also highlighted that Bitcoin’s 3-month breakout is a huge deal for the asset, pushing it to an even more powerful position in the market.