Ray Dalio – founder of Bridgewater Associates – doubts Bitcoin’s ability to function as money and believes that it is getting too attention-grabbing compared to the size of its market capitalization.
However, the billionaire believes that the current monetary system is “in jeopardy”, due to excessive money printing by central banks globally.
Bitcoin: It has nothing to do with it
in interview On CNBC’s Squawk Box on Thursday, Dalio said that while Bitcoin has accomplished “incredible” things over the past 12 years, it ultimately has “nothing to do with it.”
“It’s a small thing that gets disproportionate attention,” he said. Bitcoin is worth less than a third of the value of Microsoft stock.
The investor added that industries such as Biotech are more interesting than Bitcoin and that the latter cannot be “effective money” – either as a store of wealth or as an exchange.
This criticism is nothing new: many central bankers, including former Fed chairmen Ben BernankeAnd Riksbank – that Sweden’s central bank He argues that Bitcoin’s price volatility makes it a poor store of value and an ineffective tool for trading. supporter of the original Argues That Bitcoin’s long-term performance provides evidence to the contrary, and that its stable supply could make it a global store of value within a decade.
In fact, Dalio admits that the unlimited supply of fiat currencies proves not entirely stable either, given the high rates of money printing and
“It’s not just the United States,” he said. “All reserve currencies — what’s going on in the eurozone, what’s going on with the yen. In this world, the question is ‘what is money and how does it work?’”
The Federal Reserve has been engaged in a battle to tame inflation for more than a year after underplaying and continuing to raise rates in 2021. It has now raised its benchmark interest rate to more than 4.5%, the highest rate since 2007.
Many are wondering if the Fed can continue to raise interest rates at this rate without causing significant damage to the global economy. Both United nations and one analyst JP Morgan called for the Fed to pivot as soon as possible.
What is the best digital currency?
Turning to China, Dalio believes that its transition to a digital renminbi will be “something”. As the nation locates more of its trade in the renminbi, the currency can become a more effective store of value.
When asked about cryptocurrency alternatives to the fiat system, Dalio recommended neither bitcoin nor stablecoins (cryptocurrencies pegged to traditionally “stable” currencies, such as the US dollar).
Instead, he proposed an “inflation-linked currency” that hedges an individual’s purchasing power, similar to inflation-linked bonds.
“I think you will see the development of coins that you haven’t seen, which are likely to be attractive, viable coins. I don’t think bitcoin is,” he concluded.
Some groups, including stablecoin Rope and Russian GovernmentNow try gold-backed stablecoins.
Ray Dalio Says Post-Bitcoin Will Not Be Effective Money, first appeared on CryptoPotato.