Legendary investor Ray Dalio remains unswayed by Bitcoin’s impressive rally at the start of the year, maintaining his stance that the cryptocurrency is neither a reliable store-of-value asset nor a medium of exchange.
Dalio is the founder of Bridgewater Associates. The 73-year American, whose net worth is estimated to be around $19.1 billion (as of APRIL 16, 2023), created the asset management firm Bridgewater Associates from his New York City apartment just two years after receiving his MBA from Harvard Business School.
In a recent interview on The Julia La Roche Show, Dalio shared his unchanged views on Bitcoin, highlighting its persistent volatility.
According to Dalio, Bitcoin’s price fluctuations do not correlate with practical factors, rendering it an ineffective currency. He explained that the cryptocurrency’s value could decline due to various reasons, such as tech industry insiders selling it off in response to sector-specific issues. Dalio went on to assert that Bitcoin is a “very, very poor alternative to gold,” noting that central banks hold gold as their third-largest reserve after US dollars and euros.
Dalio also emphasized the ongoing risk of Bitcoin being outlawed or heavily regulated. He argued that central banks and nations generally have little interest in embracing the flagship cryptocurrency, making it an unattractive alternative. Despite the attention Bitcoin garners, Dalio pointed out that it is not a significant asset, with its prominence disproportionate to its actual size.
On February 2, Dalio talked with Andrew Ross Sorkin, co-anchor of CNBC’s Squawk Box. During this conversation, he shared his thoughts on the crypto landscape, reiterating his belief that Bitcoin is not an effective store of value or medium of exchange.
Despite Bitcoin’s impressive 12-year run, Dalio stated that it has no real connection to anything and attracts disproportionate attention. He insisted that it would not serve as an adequate money, store of wealth, or medium of exchange.
Nevertheless, Dalio acknowledged the current monetary system’s vulnerability due to excessive money printing by central banks, including those in the US, Europe, and Japan. He believes that as the world evolves, people will seek a safe store of wealth, and digital currencies could have a role to play in this transformation.
Dalio posed the question, “What is money?” not just as a medium of exchange but also as a store of wealth, suggesting that digital currencies linked to inflation might be a better option than Bitcoin. He envisions a coin that guarantees purchasing power over time and can be used for transactions anywhere, but he does not believe Bitcoin fits the bill.
Despite his critiques, Dalio sees potential for cryptocurrencies to continue evolving, possibly giving rise to new, more attractive, and viable coins in the future.
