Rebecca Patterson, the director of investment research at Bridgewater Associates, said Bitcoin could be better compared to gold than a currency . Several similarities between both assets support the argument that Bitcoin is the “digital gold”.
Bitcoin = Digital Gold
In a recent interview with Bloomberg, Patterson said she wouldn’t call Bitcoin an alternative currency, but mentioned that Bitcoin would have to prove its digital gold status.
“As institutional investors, we don’t know yet if it’s going to be digital gold, it may be over time, but I don’t think we can say that with confidence yet. And that affects whether or not our client should own it,” she added. “Rebecca Patterson, Director of Investment Research at Bridgewater Associates
Regulatory Clarity Needed
Patterson noted that a good regulatory clarity in Bitcoin will make it a great investable asset for more institutional investors who are yet to join the trend, as some of Bitcoins biggest challenges, including high volatility and low liquidity, are closely tied to any conversations on regulations. Patterson believes that if Bitcoin is better regulated, both high volatility and low liquidity will subside, and institutional investors can feel comfortable adding the digital asset to their portfolios.
“Right now, Bitcoin can move 10% on a tweet. That’s not exactly a store of wealth for most institutional investors. So the volatility of Bitcoin is about 10 times that of your dollar… The more you get a real regulatory ecosystem developing around Bitcoin and other currencies, the more other types of investors are going to be comfortable coming in, that’s going to bring liquidity, that’s going to reduce the volatility… So I guess if there was one thing I were watching first, it would be seeing more regulatory certainty.”Rebecca Patterson, Director of Investment Research at Bridgewater Associates