Bitcoin will not be effective money, says Ray Dalio
Bitcoin will not be effective money, says Ray Dalio
Ray Dalio-founder of Bridgewater Associates-doubts Bitcoin's ability to work as money, and believes that it receives oversized attention compared to the size of its market capitalization.
The billionaire, however, believes that the existing monetary system is "in danger" worldwide due to the excessive money pressure.
Bitcoin: Nothing related
"It is a tiny thing that gets disproportionate attention," he said. "The value of Bitcoin is less than a third of the value of the Microsoft share."
The investor added that industries such as biotech are far more interesting than Bitcoin and that the latter could not be "effective money"-be it as a wealth storage or as an exchange. This criticism is not new: several central bankers, including the former Fed chairwoman Ben Bernanke and Riksbank-The Central Bank of Sweden -argue that Bitcoin's price volatility makes it a poor value. Supporter of the assets argue that the long-term performance of Bitcoin proves the opposite and that its fixed offer could make it a global value reservation in a decade. In fact, Dalio admits that the unlimited range of fiat currencies proves that they are not entirely stable in view of their high money pressure rates "It is not just the United States," he said. "All the reserve currencies - what's going on in Euroland, what's going on with the yen. In this world the question arises:" What is money and how will it work? "
The Federal Reserve has been fighting for inflation for over a year after underestimating the extent and duration of the price increase in 2021. She has now raised her key interest rate to over 4.5 %, the highest since 2007. Many wonder whether the Fed can further raise interest rates at this pace without causing great damage to the global economy. Both combined nations and a analyst from JP Morgan, the fed have asked as quickly as possible to change. Dalio focuses on China, Dalio believes that the change to a digital renminbi will become more "thing". Since the nation processes more of its retail in Renminbi, the currency could become a more effective value preservation. When he was asked about cryptocurrency alternatives about the Fiat system, Dalio recommended neither Bitcoin nor stable coins (cryptos that are traditionally "stable" currencies like USD). instead he beat an "inflation-bound coin", which, like an inflation index bond, ensures the purchasing power of the individual. "I think you will see the development of coins that you have not yet seen that will probably be attractive and useful in the end. I don't think it is Bitcoin," he concluded. Some groups, including the StableCoin Company Holding and the Russian Now experiment with gold-covered stable coins. . What is the optimal digital currency?