A senior analyst at asset management firm Bridgewater believes that the regulation could potentially make Bitcoin [BTC] an honest asset for institutional investors.
Bridgewater director of investment research Rebecca Patterson revealed that regulatory certainty around Bitcoin would solve a number of the cryptocurrency’s major issues related to high volatility and low liquidity.
Earlier in the 24th Feb. interview with Bloomberg, Patterson added that issues like volatility and liquidity remain the most hurdles for Bridgewater’s potential to enter Bitcoin.
“Right now Bitcoin can move 10% on a tweet, that’s not exactly a store of wealth for many institutional investors. Therefore the volatility of Bitcoin is about 10x times that of your dollar, it’s still double that of the Venezuelan bolivar,” the head added.
Patterson went on to mention that both the volatility issues and liquidity issues would subside if Bitcoin [BTC] becomes a better-regulated asset:
“The more you get a real regulatory ecosystem developing around Bitcoin and other currencies, the more other sorts of investors are getting to be comfortable coming in, that’s getting to bring liquidity, that’s getting to reduce the volatility.”
“So i assume if there was one thing I were watching first, it might be seeing more regulatory certainty,” Patterson said, adding, “I’m unsure when that’s getting to are available the United States”
Patterson also added that she doesn’t check out Bitcoin as an “alternative currency” but rather as digital gold. “If anything, it’s an alternate to gold or digital gold. I feel that might be the higher comparison,” she added. Patterson said that a lot of investors are looking to Bitcoin over concerns about inflation triggered by financial institution money printing. However, for Bridgewater, Bitcoin still must prove its status as digital gold:
“As institutional investors, we do not know yet if it’s getting to be digital gold, it’s going to be over time, but I don’t think we will say that confidently yet. And that affects whether or not our client should own it.”