The Billionaire Investor Ray Dalio has called fiat currency “serious danger” as an effective store of value, but he also doesn’t think Bitcoin (BTC) and stablecoins are the solution.
Dalio, founder of hedge fund firm Bridgewater Associates, explained on CNBC’s Squawk Box on February 2 that the massive printing of money, US dollars and other reserve currencies, has made him question whether they are forms of “cash”.
“We are in a world where money as we know it is in jeopardy. We are printing too much, and it’s not just the United States, it’s all reserve currencies.”
However, Dalio was quick to add his thoughts on whether Bitcoin was a potential solution, acknowledging that despite what it has accomplished in “12 years”, it is still too volatile to serve as money:
“It’s not going to be effective money. It’s not an effective store of value. It’s not an effective medium of exchange,” he argued.
He also ruled out stablecoins as an effective form of money, since they are a replica of state-backed fiat currency.
Instead, Dalio proposed the creation of an “inflation-linked currency” that served to guarantee consumers their purchasing power.
“The closest thing to that is an inflation-indexed bond, but if you created a currency that said OK this is purchasing power where I know I can save and put my money over a period of time and transact anywhere, I think it would be a good coin”, said.
“#Bitcoin has no relation to anything. It’s a tiny thing that gets disproportionate attention,” says @RayDalio on #crypto. “The value of $BTC is less than 1/3 of $MSFT stock. It’s not an effective store of wealth. But we are in a world where money as we know it is in jeopardy.” pic.twitter.com/Cc7o2TwkxG
— Squawk Box (@SquawkCNBC) February 2, 2023
“So I think you’re going to see development of coins that you haven’t seen that will probably end up being attractive and viable coins. I don’t think Bitcoin is.” added.
However, not everyone agrees with Dalio’s take on Bitcoin and the viability of an inflation-linked currency.
The digital asset manager Eric Weiss, of Bitcoin for Family Officers, was one of them, who said to his 38,300 Twitter followers who such a coin could not exist:
“According to Ray, [Bitcoin] it is very close to being the solution to the world’s problems, but it is too volatile. It is waiting and vaguely describes a solution that does not and cannot exist.” Weiss said.
ARK Invest CEO Cathie Wood also had a different take on Bitcoin, referring to it as a defense against wealth confiscation in parts of the developing world:
“I’m struck that the market is now leading the Fed,” @ARKinvest founder @CathieDWood says on bond market downtrends. https://t.co/DDNw4dbOPD pic.twitter.com/AAS0UWf0kh
— Yahoo Finance (@YahooFinance) February 2, 2023
“Those stocks need a fallback, an insurance policy like Bitcoin,” said.
Dalio’s Latest Bitcoin Opinions Occur despite recently calling it “an incredible invention” that could serve as a viable hedge against inflation. However, these comments were made on January 28, 2021, before the current bear market took effect.
The billionaire investor has also previously recommended that BTC account for between 1% and 2% of an investor’s portfolio on January 6, 2022.
As an investment product, the hedge fund manager said in May. 24 of 2021 that he would prefer to buy BTC instead of bonds, but later, on August 5, 2021, he stated that he still preferred gold.
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