In a hyper-charged political landscape that comes alongside a sweeping tech stock sell-off, enthusiasm for bitcoin ebbs and flows like the ocean.
And that just makes it more confusing for the average investor to understand how to invest — or if to invest — in bitcoin.
“For now, this is largely a retail speculative asset,” former Bridgewater Associates chief investment strategist Rebecca Patterson told Yahoo Finance Executive Editor Brian Sozzi in a conversation on his Opening Bid podcast (see video above or listen here).
Patterson is no stranger to literal skyrockets.
Her childhood in Florida involved looking on as the space program launched dozens of craft into the heavens. Bitcoin might be smaller than spacecraft, but for some, its continued rise into the mainstream is also quite the spectacle to behold.
“[Crypto has] become a really interesting, innovative sub-asset class for speculative investors,” Patterson added.
The wild price swings in bitcoin underscore Patterson’s point.
Bitcoin’s price has plunged some 25% in the last few weeks as part of a broader sell-off in risky assets.
That rising mainstream appeal — in the face of heightened volatility — has attracted the gaze of White House hopefuls, and with it, even more price volatility.
Former President Donald Trump, who had previously dismissed crypto, appeared to be more enthusiastic at the closely watched Bitcoin 2024 conference late in July.
In addition to accepting cryptocurrency campaign donations, he revealed plans to fire current SEC Chair Gary Gensler (who is disliked by the crypto community) and to create a “strategic bitcoin reserve.”
His plans include making the US a “crypto superpower” and beating China to the game.
“We will have regulations, but from now on the rules will be written by people who love your industry, not hate your industry,” Trump said.
Bitcoin influencer and investor Anthony Pompliano said it makes sense that Trump is coming around, considering the more enthusiastic stances on cryptocurrency from members of his inner circle.
“I do think he’s much more sympathetic than he was previously,” Pompliano told Yahoo Finance.
Aside from Trump, other contenders for the presidential seat have weighed in positively. RFK Jr. declared bitcoin crucial “for the nation’s economic recovery” at the conference.
Vice President Kamala Harris has remained slightly more mysterious about her administration’s crypto stance.
Democrats have historically wavered on the issue of crypto policy. Harris’s campaign has recently conducted outreach with crypto firms and seeks more favorable relationships, according to a report from the Financial Times.
Pompliano says the crypto industry would welcome the relationship reset with Harris.
Still, “the hype around [cryptocurrencies] being embraced by longer-term institutional investors is premature,” said Patterson.
“If you’re a large pension fund, a sovereign wealth fund, there is not enough liquidity for you to put on a position in bitcoin and then pull it out or take your profit if you’re in a distressed environment. Those sorts of investors aren’t there in size yet,” Patterson noted.
Three times each week, Yahoo Finance Executive Editor Brian Sozzi fields insight-filled conversations and chats with the biggest names in business and markets on Opening Bid. Find more episodes on our video hub. Watch on your preferred streaming service. Or listen and subscribe on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.
In the below Opening Bid episode, Patterson pushes back on the crypto bulls.
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