Janice R. Andrews
The euphoria around Bitcoin fluctuates like the tides in this highly charged political environment, especially in light of the recent massive sell-off in tech stocks. When deciding whether to invest in Bitcoin, the ordinary investor finds it confusing due to its volatility.
In an interview with Yahoo Finance Executive Editor Brian Sozzi for his Opening Bid podcast, Rebecca Patterson, the former chief investment strategist at Bridgewater Associates, stated, “For now, this is largely a retail speculative asset.”
Patterson was up witnessing space launches in Florida, so he was no stranger to amazing spectacles. While Bitcoin may not have the same grandeur as a spaceship, its ascent to popularity has been quite the show. Patterson continued, “[Crypto has] evolved into a really intriguing, cutting-edge sub-asset class for speculative investors.”
The extreme fluctuations in Bitcoin’s price underscore Patterson’s argument. In recent weeks, there has been a significant sell-off in riskier assets, which has resulted in a 25% decline in the price of bitcoin. Politicians have taken notice of this volatility, which has caused further swings in the price of Bitcoin.
Donald Trump, the former president who had earlier written off cryptocurrencies, seemed more excited about them at the well followed Bitcoin 2024 conference in late July. In addition to taking bitcoin contributions for his campaign, Trump intends to remove Gary Gensler as SEC chair and establish a “strategic Bitcoin reserve.” His goal is to surpass China and turn the United States into a “crypto superpower”.
At the conference, Trump declared, “We will have regulations, but going forward, the rules will be written by people who love your industry, not hate your industry.”
Anthony Pompliano, a bitcoin investor and influencer, pointed out that Trump’s shift in position makes sense given his inner circle’s fervent support for cryptocurrencies. Pompliano stated to Yahoo Finance, “I do believe he’s much more sympathetic than he was previously.”
Other candidates for president have also declared their support for Bitcoin. At the same conference, RFK Jr. declared Bitcoin to be essential “for the nation’s economic recovery”. On the other hand, Vice President Kamala Harris has been more mum on her administration’s position on cryptocurrencies. Democrats have historically been hesitant when it comes to cryptocurrency legislation, but in an effort to build stronger ties with the industry, Harris’s team has reportedly reached out to cryptocurrency companies. This was reported by the Financial Times.
Pompliano stated that a new beginning with Harris would be welcomed by the cryptocurrency sector. Patterson thinks that the excitement around the adoption of cryptocurrencies by long-term institutional investors is unfounded, even in light of the political interest.
There is insufficient liquidity for a huge pension fund or sovereign wealth fund to invest in Bitcoin, reap a profit, and then remove their holdings when conditions worsen. Patterson said, “Those kinds of investors aren’t there in size yet.
For ordinary investors, Bitcoin is a complicated asset because of the political intrigue surrounding it and its volatile market position. The trajectory of Bitcoin’s journey continues to be highly speculative, despite growing interest from political leaders and changes in the regulatory landscape.
Listen to Brian Sozzi’s Opening Bid podcast, where he interviews the most well-known figures in markets and business, for further insights. Discover episodes on the video hub of Yahoo Finance, or sign up on Spotify, Apple Podcasts, or your favorite streaming service.
