Founder of Bridgewater Associates, Ray Dalio has said that in an inflationary environment, he would prefer to hold Bitcoin instead of bonds. At the Consensus by CoinDesk Convention, Dalio gave an interview, where he made these statements and also confirmed that he did have some Bitcoin holdings, although he refrained from disclosing the amount. The interview made it clear that the hedge fund giant’s founder preferred Bitcoin for a number of reasons. He said that a global debit crisis is looming, which will expose the US dollar to the risk of devaluation, something that happened last in 1971. If the debit crisis were to repeat itself, then considering how Bitcoin has gold-like features, it would prove to be a more viable savings tool.
Dalio went on to say that in the face of inflation, he would rather own Bitcoin than bonds. He won’t be the first billionaire to have made such remarks about the possible devaluation of the US dollar and how Bitcoin could assist in this situation. Similar remarks have already been made by Stanley Druckenmiller. Apart from that, Bitcoin is also preferred because it is a store of value, regardless of its volatility. Even though many people only opt for Bitcoin to enjoy the profits made from trading it, a lot of people are making use of it to protect their wealth from the effects of inflation.
Till the end of last year, Dalio had been a Bitcoin critic, but he changed his heart this year and is now of the opinion that it could actually be the solution needed for storing assets during times of inflation. Dalio has spent some time studying the debt cycle in the US. He believes the situation is similar to what took place in 1971 when the gold standard was abolished is the US and growing debt transformed the dollar into a fiat currency.
As per Dalio, the chances of debt increasing are high after an evaluation of the US budget and this means more money will be required. In 1971, stock values had gone up and if the same were to happen today, it would push up Bitcoin’s price as opposed to the US dollar and this would provide the crypto holders with solid returns. Moreover, a lot of countries already have reservations about opting for the US dollar as the reserve currency and Bitcoin could prove to be a neutral reserve currency that’s not affiliated with any jurisdiction.
This makes Bitcoin quite similar to gold and can help in protecting the future value of the token. Dalio went on to say that the world is changing rapidly and technology is making itself known in every aspect. Bitcoin is just another one of the great technological innovations being made nowadays. Thus, any country that realizes the ultimate potential of Bitcoin and other digital currencies will certainly have an edge. It is due to these reasons that Ray Dalio has himself decided to opt for the premier cryptocurrency as a mode of investment, even though he had previously been a critic.