Ray Dalio, the founder of hedge fund giant Bridgewater Associates, has stated that he would rather hold Bitcoin than bonds in an inflationary environment. Dalio made these remarks during an interview at Consensus by CoinDesk Convention, where he also confirmed that he had some Bitcoin holdings but did not reveal the exact amount.
From the interview, it is clear that Ray Dalio prefers Bitcoin as an investment vehicle because of the following reasons.
1. Looming Inflation
Dalio said there is a looming global debt crisis in which the US dollar is at risk of devaluation, a condition last witnessed in 1971. If the debt crisis happens, then Bitcoin would be a more viable savings tool, given that it has gold-like features.
Dalio said that in the event of serious inflation, “Personally, I’d rather have bitcoin than a bond.”
Dalio will not be the first billionaire to make remarks about the dollar’s possible devaluation and how Bitcoin could help the situation. Stanley Druckenmiller has also made similar remarks.
3. BTC as a store of value
Bitcoin is also being increasingly opted for as a store of value, despite its volatility. While other people only seek Bitcoin to enjoy profits from trading, others are using it to protect their wealth from inflation.
Dalio was a Bitcoin critic up until towards the end of last year, but he has changed heart this year and believes that Bitcoin could be the best solution to solve the problem of storing assets during a period of inflation.
4. Bitcoin could go up
Dalio has been studying the debt cycle in the US for a while. He says that the current situation is similar to what happened in 1971 when the US abolished the gold standard and the dollar was made a fiat currency due to growing debt.
According to Dalio, a clear evaluation of the US budget shows that debts will increase, and more money will be needed. When the 1971 situation happened, stock values shot up. If this happens now, the value of Bitcoin will also increase compared to the US dollar, giving Bitcoin holders good returns.
5. Bitcoin is a neutral reserve currency
A rising number of countries have reservations about using the US dollar as a reserve currency. Against this background, Bitcoin is being seen as a possible neutral reserve currency that is not affiliated with any jurisdiction.
This makes Bitcoin similar in feature set to gold, and this may protect the token’s future value.
6. Bitcoin is tech-savvy
The world is changing, and everything is now leaning towards technology. Bitcoin is a great technological innovation, and this means that the country that realises Bitcoin and digital currencies ultimate potential most effectively will have an edge.
“The world is going to change at an incredibly fast pace,” Dalio said. “Whoever wins the technology race, wins it all, economically, and militarily. … That’s what the next five years looks like” Dalia said.