While he still has some concerns about the crypto, he is not totally against Bitcoin (BTC). He published his views about the numero uno crypto in detail on the Bridgewater website, underlining both the threat and ability of the top crypto by market cap. While providing his opinion, he cautions that he is not a crypto or Bitcoin expert.
Says the hedge fund manager,
“There aren’t many alternative gold-like assets at this time of rising need for them (because of all the debt and money creations that are underway and will happen in the future). Because of what is going on in the world, besides there being a growing need for money or storehold of wealth assets that are limited in supply, there is also a growing need for assets that can be privately held.
Because there aren’t many of these gold-like storehold of wealth assets that can be held in privacy and because the sizes of their markets are relatively small, there exists the possibility that Bitcoin and its competitors can fill that growing need. It seems to me that Bitcoin has succeeded in crossing the line from being a highly speculative idea that could well not be around in short order to probably being around and probably having some value in the future.”
Dalio believes that crackdown of crypto sector by governments, without understanding the potential, presents big threat to the asset.
“I suspect that Bitcoin’s biggest risk is being successful, because if it’s successful, the government will try to kill it and they have a lot of power to succeed.”
He does not accept the argument that Bitcoin’s decreasing liquidity guarantees its position as a store-of-value asset as such a justification provides leverage for other cryptos to take its position.
“Since the way Bitcoin works is fixed, it won’t be able to evolve and I presume that a better alternative will be invented and pass it by. I see that as a risk. For those reasons the ‘limited supply’ argument isn’t as true as it might appear – e.g., if Blackberries were in limited supply they still wouldn’t be worth much because they were replaced by competitors that were more advanced. I still don’t know the answer to why that isn’t a risk, but I would welcome my naïveté being corrected.”
Dalio also trusts that Bitcoin is facing a threat of getting hacked. In spite of that, the billionaire seems to be viewing Bitcoin as a likely investment option.
“This is why to me Bitcoin looks like a long-duration option on a highly unknown future that I could put an amount of money in that I wouldn’t mind losing about 80% of. That is what Bitcoin looks like to this non-expert. I am eager to be corrected and learn more. On the other hand, believe me when I tell you that I and my colleagues at Bridgewater are intently focusing on alternative storehold of wealth assets.”
Billionaire hedge fund manager Ray Dalio – Bitcoin is “one hell of an invention”