A senior analyst at Bridgewater Asset Management believes the regulation has the potential to make Bitcoin (BTC) a good resource for institutional investors.

Bridgewater’s investment research director, Rebecca Patterson, argued that Bitcoin’s regulatory security will address some of the biggest cryptocurrency challenges associated with high volatility and low liquidity.

In an interview with Bloomberg on February 24, Patterson said issues such as volatility and liquidity remain major obstacles to Bridgewater’s potential shift to bitcoin.

Currently, Bitcoin may move 10% in a tweet, as it is not really a store of wealth for most institutional investors. Thus, the volatility of Bitcoin is about ten times the dollar, and the Venezuelan bolivar remains twice as high, ”the leader said. …

Patterson also said that the volatility and liquidity issues would decrease if Bitcoin became a more regulated asset:

“The more you have a real regulatory ecosystem developing around Bitcoin and other currencies, the more other types of investors feel comfortable entering it, the more liquidity you will provide and reduce volatility.”
“So I think if you look at one thing first, there will be a lot of security,” Patterson said, adding, “I’m not sure when this will arrive in the United States.

Patterson also said that she considers Bitcoin not to be an “alternative currency” but rather digital gold. “If anything, this is an alternative to gold or digital gold. I think it would be a better comparison.” Patterson said many investors are looking to Bitcoin due to concerns about inflation driven by monetary pressure from the central bank. Bridgewater, Bitcoin still needs Prove its digital gold status:

“As institutional investors, we don’t know yet if this will be digital gold, it might happen over time, but I don’t think we can say that for sure yet. It affects whether our clients should own it or not.”