A senior analyst at asset administration agency Bridgewater believes that regulation may doubtlessly make Bitcoin (BTC) a very good 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 primary 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 chief 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 growing round Bitcoin and different currencies, the extra different forms of traders are going to be snug coming in, that’s going to convey liquidity, that’s going to cut back the volatility.”
“So I suppose if there was one factor I have been watching first, it might be seeing extra regulatory certainty,” Patterson mentioned, including, “I am unsure when that’s going to come back within the U.S.”
Patterson additionally mentioned that she doesn’t have a look at Bitcoin as an “different forex” however fairly as digital gold. “If something, it’s a substitute for gold or digital gold. I believe that will be the higher comparability,” she mentioned. Patterson mentioned that many traders have been seeking to Bitcoin over issues about inflation triggered by central financial institution cash printing. Nonetheless, 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 might be over time, however I don’t assume we will say that with confidence but. And that impacts whether or not or not our shopper ought to personal it.”