Billionaire investor Ray Dalio has described fiat currency as being in serious “danger” as an effective storehouse of wealth, but he also doesn’t believe Bitcoin (BTC) and stablecoins are the solution.
Dalio, the founder of hedge fund firm Bridgewater Associates, explained on CNBC Squawk Box on February 2 that the massive money printing of the US dollar and other reserve currencies makes 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 the 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 will not be cash. It is not an effective store of wealth. It is not an effective means of exchange,” he argued.
He also ruled out stablecoins as an effective form of money, since it is a replica of state-backed fiat currency.
Instead, Dalio proposed creating an “inflation-linked currency” that would serve to ensure that consumers secure their purchasing power.
“The closest thing to that is an inflation index bond, but if you created a currency that says OK this is purchasing power that I know I can save and put my money over a period of time and transact anywhere I think that would be a good coin,” he said.
“#Bitcoin it has nothing to do with it. It’s a tiny thing that gets disproportionate attention,” says @RayDalio in #crypto. “The value of $BTC is less than 1/3 of $MSFT stock. It is not an effective store of wealth. But we are in a world where money as we know it is in danger.” 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,” he added.
However, not everyone agreed with Dalio’s take on Bitcoin and the viability of an inflation-linked currency.
Digital asset manager Eric Weiss of Bitcoin for Family Officers was one, who said his 38,300 Twitter followers that such a coin could not exist:
“According to Ray, (Bitcoin) 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 view of Bitcoin, referring to it as a defense against wealth confiscation in parts of the developing world:
“I am surprised that the market is now leading the Fed,” @ARKinvest Founder @cathiedwood says about the bearish trends of the bond market.https://t.co/DDNw4dbOPD pic.twitter.com/AAS0UWf0kh
— Yahoo Finance (@Yahoo Finance) February 2, 2023
“Those populations need a backup, an insurance policy like Bitcoin,” he said.
Related: Crypto Friendly Ray Dalio Withdraws From $150M Bridgewater Fund
Dalio’s latest views on Bitcoin come despite recently labeling it “a great 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 1-2% of a portfolio of investors on January 6, 2022.
As an investment product, the hedge fund manager said in May. on Aug 24, 2021 that he would prefer to buy BTC over bonds, but then stated on Aug 5, 2021 that he still prefers gold.
On October 4, Dalio stepped down as co-chief investment officer but remained on board as a mentor.
