Bridgewater Associates’ director of investment research explained how bitcoin and other cryptocurrencies can reduce volatility as well as increase liquidity.
Bridgewater Associates, the world’s largest hedge fund, is ready to invest in Bitcoin if its volatility declines and liquidity increases. The fund’s director of investment research told Bloomberg TV about this in an interview. According to her, now the value of the main digital coin may fluctuate in the range of 10% because of publications on Twitter. Bitcoin’s volatility is ten times higher than that of the U.S. dollar. She is confident that such a volatility rate is not suitable for most institutional investors.
Another problem of bitcoin is low liquidity, Bridgewater Associates representative said. According to Patterson, it is possible to increase this indicator by creating a regulatory ecosystem to ensure comfortable work with cryptocurrencies for investors.
“The more a real regulated ecosystem is developed around bitcoin and other cryptocurrencies, the more other types of investors will start to get comfortable with crypto assets. That will bring liquidity. It will reduce volatility,” the expert explained.
At the end of January this year, the founder of Bridgewater Associates, Ray Dalio, changed his attitude towards cryptocurrency. He wrote about it in the company’s daily newsletter, which is sent to the fund’s clients. Dalio said that in the future bitcoin could become an asset “similar to gold” and stated his willingness to invest in the main digital coin a sum of money that he wouldn’t be sorry to lose.
Head of MicroStrategy Michael Saylor announced the company’s purchase of 19.4 thousand bitcoins worth $1.02 billion on February 24. Now there are 90.5 thousand bitcoins in MicroStrategy’s portfolio.