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The founder of the worldâs largest hedge fund, Bridgewater Associates, is still concerned that governments could outlaw cryptocurrencies. Nonetheless, he sees bitcoin as digital gold and owns some for diversification.
Ray Dalio Worried About Government Outlawing Cryptocurrencies
Bridgewater Associates founder Ray Dalio is still concerned that governments may outlaw cryptocurrency. Dalio now serves as the firmâs chairman and co-chief investment officer. Bridgewater Associatesâ clients include endowments, governments, foundations, pensions, and sovereign wealth funds.
Dalio voiced his concern in an interview with CNBC last week, stating that there is âa reasonable chanceâ that cryptocurrencies, including bitcoin, could eventually be outlawed by the federal government.
He pointed to the time when President Franklin D. Roosevelt signed the Gold Reserve Act in 1934, transferring all of the countryâs privately held gold titles and certificates to the U.S. Treasury as an example. The executive previously explained that any major economic downturn or inflationary event could prompt governments to take similar action on bitcoin and other cryptocurrencies.
The 72-year-old billionaire to CNBC last week: âI own a very small amount of bitcoin. Iâm not a big owner.â He added:
There are certain assets that you want to own to diversify the portfolio, and bitcoin is something like a digital gold.
âI just think of it as diversification. By and large, I donât really know whether bitcoin is going to go up or down. I could argue both sides of that,â he admitted.
The Bridgewater Associates executive explained that it is important to continually reevaluate the investments and avoid buying assets that perform well for a short period of time. âBe careful about what youâre putting your money inâ ,â he said, elaborating: âMake the diversification global, not just in the United States.â
While seeing bitcoin as a digital version of gold and a hedge against inflation, Dalio still prefers gold, citing the metalâs longer history of being a âstorehold of wealth.â He said: âIf you put a gun to my head, and you said, âI can only have one.â I would choose gold.â
Dalioâs crypto ban concern is getting less and less realistic over time, however, as cryptocurrency adoption increases globally. Last week, the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, said that Satoshi Nakamotoâs âinnovation is real.â A growing number of the worldâs largest investment banks are also getting into crypto, including JPMorgan, Goldman Sachs, Citigroup, and Morgan Stanley. In addition, companies are hiring more people to work on crypto projects, including Amazon, Fidelity, and Paypal.
What do you think about Ray Dalioâs concern? Let us know in the comments section below.
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