Key Points

  • 1. Ray Dalio warns of an impending monetary crisis and suggests that an inflation-linked cryptocurrency would be more secure than Bitcoin.
  • 2. Dalio expresses skepticism about Bitcoin, stating that it has no relationship to anything and is not a safe store of value.
  • 3. Dalio highlights fiat currencies as the true cause for concern and warns that money as we know it is in jeopardy.
  • 4. Dalio advocates for the development of currencies that guarantee purchasing power and dismisses Bitcoin as a viable option.
  • 5. Bridgewater Associates aims to back a cryptocurrency fund, signaling a potential shift in institutional investor sentiment towards cryptocurrencies.

Ray Dalio's Took on Bitcoin in the last year: Trough Bridgewater Associates, the world's largest investment fund, officially entered the crypto world following founder Ray Dalio's praise for cryptocurrencies and revelation of his Bitcoin holdings. Dalio, a renowned investor, had described Bitcoin as an "amazing achievement" and believed institutional investor adoption would surge in the coming years.

Dalio´s Idea about Bitcoin

Issues Warning on Imminent Monetary Crisis, Advocates for Inflation-Linked Cryptocurrency Over Bitcoin

Ray Dalio sounded the alarm on an impending monetary crisis and asserted that a cryptocurrency tied to inflation would offer greater security than Bitcoin, the largest cryptocurrency by market capitalization.

Dalio, a renowned figure in the world of finance, expressed skepticism about Bitcoin, stating that it "has no relationship to anything" and rebuking claims that it serves as a safe store of value.

"It's a small thing that gets a disproportionate amount of attention," Dalio remarked. "It's not going to be cash. It's not a cash-like deposit of wealth. It's not a cash-like medium of exchange."

However, Dalio highlighted fiat currencies, such as the US dollar, the euro, and the Japanese yen, as the true cause for concern.

"We're in a world where money as we know it is in jeopardy," Dalio warned. "We're printing too much, and it's not just in the United States."

He also pointed out China's push to trade with the yuan and promote its digital renminbi, suggesting that they would become more widely used in global transactions.

"If Saudi Arabia sells oil in renminbi and then buys things from China in renminbi, when they get it, they'll have more renminbi, it'll be a higher percentage of their reserves," Dalio explained. "The question in the coming years is really what is money, not just as a medium of exchange but as a store of wealth."

While Bitcoin has been touted as the future of currency, Dalio argued that it is too volatile. He also dismissed stablecoins, which are often considered safer than Bitcoin, as essentially fiat currencies.

Instead, Dalio advocated for an inflation-linked currency that could guarantee purchasing power.

"If you created a currency that says 'OK, this is purchasing power that I know I can save and put my money into for a period of time and transact,' then I think that would be a good currency," Dalio stated. "So I think you'll see the development of currencies that you haven't seen that will probably end up being attractive, viable currencies. I don't think Bitcoin is one."

The Time Has Come

Instead of directly investing in digital assets, Bridgewater Associates aimed to back a cryptocurrency fund, a significant move considering the fund managed $150 billion in assets. This could have prompted other institutional investors to reconsider cryptocurrencies despite the ongoing recession.

Dalio had admitted to holding some Bitcoin investments, referring to it as "almost the alternative to gold for a younger generation" and meriting "a small portion" of a diversified portfolio. However, he cautioned that governments might ban cryptocurrencies if they became too successful.

Earlier this month, U.S. President Joe Biden had signed an executive order mandating federal agencies to conduct a comprehensive review of their cryptocurrency and digital asset-related policies.

Additionally, Steve Cohen's Point72 Asset Management's venture capital arm had led a $21 million Series A funding round for cryptocurrency market intelligence firm Messari in 2021, as per MarketWatch.

Ray Dalio

Ray Dalio

Ray Dalio is the founder and co-chief investment officer of Bridgewater Associates, one of the largest and most successful investment firms in the world. Dalio is known for his expertise in macroeconomic investing and his principles-based approach to decision making. He is also a well-known philanthropist and author.
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