Despite BNY Mellon’s entry into Bitcoin (BTC), the CEO of one of the company’s asset management divisions remains skeptical of the underlying risks associated with the world’s largest digital currency.

Francesca Fornazari, head of currency solutions at Insight Investment, a subsidiary of BNY Mellon, believes that Bitcoin may not be suitable for most institutional investors due to high volatility, low liquidity, governance and environmental risk.

In an interview with Bloomberg on Tuesday, Fornasari said that valuing bitcoin may be more difficult than the gold value due to the sharp price fluctuations, which further complicates the potential response to inflation.

At the end of the day, you need to be aware of the fact that if you invest in bitcoin, there are a number of different factors and considerations that will affect the value of your investment that have nothing to do with inflation. or securing inflation, ”she said.

A currency exchange expert stated that slow and expensive bitcoin transactions can be a major obstacle to mass adoption. “We are skeptical of the potential of bitcoin as a means of payment,” said Fornasari.

However, Insight Investment is optimistic about digital currencies or other cryptocurrencies in addition to bitcoin and expects the growth of these digital assets, especially those that address issues such as transaction speed and cost, energy consumption and volatility, according to Fornasari.

On the subject: Bitcoin needs clear rules to be less volatile, says a Bridgewater analyst.

Insight Investment is one of the world’s largest asset managers and manages almost $ 1 trillion in assets. The company has been a subsidiary of BNY Mellon since 2009 after it was acquired by the American banking giant from Lloyds Banking Group.

The company’s skeptical attitude towards Bitcoin is clear despite the fact that BNY Mellon actively switched to Bitcoin after the bank announced its plans to store and transfer Bitcoin and other cryptocurrencies as an asset manager in February this year. The company also claimed that the poor performance of one of its exchange-traded funds was due to lack of contact with companies that invest in bitcoin.

Source: CoinTelegraph

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