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Bitcoin Looks at a ‘Digital Gold’ Future

Bitcoin can become a ‘Digital Gold’ if the volatility drops and regulators step in, Bridgewater Executive says.

Bridgewater’s director of investment research Rebecca Patterson has stated that Bitcoin can become digital gold if the cryptocurrency’s volatility drops and its liquidity improves with a “regulatory certainty.”

Patterson stated those words during an interview with Bloomberg, first reported on by Business Insider. In the interview, Patterson publicized that she would not call Bitcoin an “alternative currency” and argued instead the flagship cryptocurrency will be better compared to gold as a store of value.

She continued that she believes bitcoin has the potential to become “digital gold,” however after some problems associated with its volatility, liquidity, and regulatory status are resolved. Patterson highlighted that as institutional investors they can’t say “with confidence yet” bitcoin will eventually be digital gold.

The flagship cryptocurrency has value to investors as a hedge against fiat currency inflation, for investors look at crypto while worrying about fiat currencies losing their value with “all this central bank printing.” To trigger Bridgewater to invest in the cryptocurrency, she wrote, a few things will have to improve.

As per the executive, Bridgewater will need to see its volatility drop as “right now bitcoin can move 10% on a tweet, that’s not exactly a store of wealth for most institutional investors.” Furthermore, the firm will need to see greater liquidity, which she believed may come from “regulatory certainty.” She said:

“The more you acquire a real regulatory ecosystem developing around bitcoin and some currencies, the more other types of investors are going to be comfortable coming in, and it’s going to bring liquidity, that is going to decrease the volatility.”

It is worth remembering that most analysts believe that regulators stepping in could stop bitcoin’s growth. This month, Treasury Secretary Janet Yellen claimed that Bitcoin is “an extremely inefficient” way to conduct some monetary transactions.

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