Crypto Briefing: Anchor’s CEO Daniel Popa on Bitcoin’s Volatility and the Importance of a Predictable Store of Value
Crypto Briefing, a website dedicated to the crypto community and the latest news and analysis, recently published an article written by Daniel Popa, the founder and CEO of Anchor. The main topic was the future of the crypto economy. Additionally, Popa gave his insight into what the latest drops in the value of Bitcoin could lead to.
Nowadays, anyone who is looking to invest in crypto is most likely to turn to Bitcoin. After all, this is the coin that opened doors to the idea of not using fiat currencies, which are at a constant risk of inflation and market fluctuations.
In hindsight, the idea of having a currency that doesn’t have to rely on the government to have monetary value was quite innovative. However, using Bitcoin means investors also have to accept all other risks. Unfortunately, the main issue with this cryptocurrency is that it’s extremely volatile. Its value can change in a matter of hours, leaving investors wondering whether it’s even worth it.
Is Bitcoin safe enough to invest in?
Daniel Popa also touches upon the fact that, outside of the crypto world, financial managers would always look for safe investments. These would come in the form of government and municipal bond funds, as well as treasury securities, for example. Why are these secure? When backed and insured by a government that can repay its debts, these investments provide the much-needed peace of mind.
Still, the US national debt is growing by the minute, so investing in crypto seems like a sound choice. Bitcoin is borderless, and it doesn’t depend on a third party for validation. Yet, that doesn’t mean it’s stable or secure enough to rely on.
In the end, without stability, every investment is at risk of ending up being a total disaster. That’s why stablecoins exist, although, as Daniel Popa says, they haven’t been able to keep their stability-based promises. Tether, in particular, has disappointed many. It was presumably backed 1:1 to the US dollar. However, as it turns out, it is about 74% backed — so it’s difficult to trust it or even call it “stable.”
To learn more about the future of the crypto economy, as well as why a predictable store of value is necessary, read the entire article here.
Title photo by Burak K, Pexels.