Ray Dalio’s thoughts on Bitcoin
Those who have built it have done a fabulous job of sustaining that dream and moving Bitcoin into being an alternative gold-like asset.
Ray Dalio is the co-founder and CEO of Bridgewater, the largest hedge fund in the world with $150 billion of assets under management.
In the last several years, as the popularity of Bitcoin rose, he was mostly neutral towards commenting, primarily due to lack of information and research. He decided to dig deep into Bitcoin, as a non-expert, and posted a long and detailed comment about Bitcoin and the market behind it.
If you don’t have the time to read the whole report, here is a short summary of his views. Ray Dalio is not a crypto market expert, but his assessment is important and demanded by the industry, as he pointed out.
1. Bitcoin is one hell of an invention
“To have invented a new type of money via a system that is programmed into a computer is rapidly gaining popularity as both a type of money and a storehold of wealth is an amazing accomplishment.”
“Those who have built it have done a fabulous job of sustaining that dream and moving Bitcoin into being an alternative gold-like asset.”
“Because of all the debt and money creations that are underway, there is rising need for alternative gold-like assets and also a growing need for assets that can be privately held.”
“It seems 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.”
2. Bitcoin supply
“Although Bitcoin is limited in supply, digital currencies are not limited in supply. “
“New cryptocurrencies will continue to come along to compete, so Bitcoin-like assets should play a role in determining the price of Bitcoin and other cryptocurrency prices. Bitcoin could face a risk of being displaced by other, better solutions/cryptocurrencies.”
3. Security
“Bitcoin being digital and connected, means it is not protected against cyber attacks, even though it was not hacked so far. Even with the possibility of »cold storage, «there are not a lot of people doing it, plus it is difficult to do.”
4. Privacy
“Regarding privacy, it appears that Bitcoin will unlikely be as private as some people surmise.”
“If the government wants to get rid of Bitcoin, it probably could and the chances for this grow by growing popularity of Bitcoin.”
5. Bitcoin as a (risky) investment
“Bitcoin looks like a long-duration option on a highly unknown future that he could put an amount of money in that he wouldn’t mind losing about 80% of.”
Ray Dalio’s comment is yet another important confirmation that Bitcoin is on a path of broader adoption by being recognized by the traditional finance industry.
DISCLAIMER: This article is for informational and discussion purposes only and does not constitute a marketing message, an investment survey, an investment recommendation, or investment advice. The article was prepared exclusively for a better understanding of market dynamics.
