A senior analyst at US asset management firm Bridgewater Associates said Bitcoin should be viewed as digital gold, not an alternative to fiat currency.
“Bitcoin is a digital gold but cannot be a currency”
Rebecca Patterson, director of investment research at Bridgewater Associates, said that because of the similarities between the two assets, Bitcoin could be better than a currency compared to gold, and therefore supports the digital gold argument.
In a recent interview with Bloomberg, Patterson said he would not call Bitcoin an alternative currency. “I think it’s a digital alternative to gold. I think this will be a better comparison. ”
Despite calling BTC an alternative to the precious metal, Patterson added that the cryptocurrency must prove its status as digital gold.
“As institutional investors, we don’t know yet whether digital gold will exist, it may be over time, but I don’t think we can say that yet with confidence. And this affects whether our client will have it or not. “
Patterson noted that good regulatory clarity in Bitcoin would make it a great investment asset for more institutional investors not yet on the trend.
According to him, some of BTC’s biggest problems, including high volatility and low liquidity, are closely linked to asset regulation.
He added that the main reason why the company, founded by Ray Dalio asset manager, did not make any moves to join the BTC caravan, was the excessive volatility of Bitcoin.
“Right now Bitcoin can move 10% with one tweet. This isn’t exactly a store of wealth for most institutional investors. In other words, the volatility of Bitcoin is about 10 times your dollar. ”
The analyst believes that if Bitcoin is better regulated, both high volatility and low liquidity will decrease, and institutional investors can feel comfortable adding digital assets to their portfolios.