A senior analyst at asset administration agency Bridgewater believes that regulation might doubtlessly make Bitcoin (BTC) a superb asset for institutional traders.
Bridgewater director of funding analysis Rebecca Patterson claimed that regulatory certainty round Bitcoin would resolve a number of the cryptocurrency’s greatest issues related to excessive volatility and low liquidity.
In a Feb. 24 interview with Bloomberg, Patterson mentioned that points like volatility and liquidity stay the principle hurdles for Bridgewater’s potential transfer into Bitcoin.
“Proper now Bitcoin can transfer 10% on a tweet, that’s not precisely a retailer of wealth for many institutional traders. So the volatility of Bitcoin is about 10 instances that of your greenback, it’s nonetheless double that of the Venezuelan bolivar,” the manager mentioned.
Patterson went on to say that each the volatility drawback and liquidity points would subside if Bitcoin turns into a better-regulated asset:
“The extra you get an actual regulatory ecosystem creating round Bitcoin and different currencies, the extra different sorts of traders are going to be comfy coming in, that’s going to carry liquidity, that’s going to scale back the volatility.”
“So I suppose if there was one factor I had been watching first, it might be seeing extra regulatory certainty,” Patterson mentioned, including, “I am undecided when that’s going to return within the U.S.”
Patterson additionally mentioned that she doesn’t have a look at Bitcoin as an “different forex” however slightly as digital gold. “If something, it’s a substitute for gold or digital gold. I believe that might be the higher comparability,” she mentioned. Patterson mentioned that many traders have been seeking to Bitcoin over considerations about inflation triggered by central financial institution cash printing. Nevertheless, for Bridgewater, Bitcoin nonetheless wants to show its standing as digital gold:
“As institutional traders, we do not know but if it’s going to be digital gold, it could be over time, however I don’t suppose we are able to say that with confidence but. And that impacts whether or not or not our consumer ought to personal it.”