Dalio Bridgewater Fund Research: Bitcoin can also rise 160 percent
If the share of gold invested in asset allocation diversification is replaced by Bitcoin, Bitcoin prices will theoretically rise by at least 160 per cent.
Analysts at Bridgewater have concluded that if investors transfer some of their gold-invested assets into cryptocurrencies, they will significantly increase their value.
Assuming that half of the total market value of bitcoin and privately held gold savings is invested in bitcoin (about $1.6 trillion), bitcoin prices will climb to $85,000, the report adds.
But Bridgewater itself admits that the estimate is much more conservative than that of several other financial institutions.
“In reality, our above estimates may prove conservative, as such large-scale liquidity could lead to tight supply and asset reflection, driving up the real price of Bitcoin .”
The analysis of Bridgewater also found that the main institutions involved in Bitcoin investment are still smaller companies, hedge funds and family funds, rather than larger traditional financial institutions, in which the market size of encrypted money is still very small. The reason is that large institutions that want to hold bitcoin still face structural problems and operational challenges.
In addition to the current apparent lack of regulatory transparency, a key challenge for large traditional financial institutions is to ensure the liquidity required for large-scale exchanges without destabilizing markets.
The study also showed that although Bitcoin is at its highest level in history, it is still low compared with other asset classes.
In fact, Bridgewater’s assessment of volume from the basis of the agency’s “actual volume” found that although the published foreign exchange volume highlighted a clear boom, the volume was basically the same as the encrypted money market.
This trend proves that the liquidity of fixed quantity and small-scale futures markets based on bitcoin depends largely on the change of their prices.
The good news is that although larger financial institutions have not adopted the urgent requirements of asset allocation adjustments. However, we believe that a small adjustment in asset allocation by relatively small investors may still have a significant impact on the Bitcoin market.