Ray Dalio Is Right About The US Dollar, But So Wrong About Bitcoin - Part 2
Ray Dalio is the founder, co-Chief Investment Officer and co-Chairman of Bridgewater Associates, which is a global macro investment firm and is the world’s largest hedge fund. Ray Dalio Bloomberg is the world's 58th wealthiest person, worth an estimated $19 billion. Ray Dalio accumulated his wealth because he thought differently about the Markets.
While at Bridgewater Ray invented several investment strategies including: Risk Parity, Currency overlay and Portable alpha. Risk parity is a conceptual approach that attempts to equalize risk by allocating funds to a wider range of categories such as stocks, government bonds, credit-related securities and inflation hedges (including real assets, commodities, real estate and inflation-protected bonds), while maximizing gains through financial leveraging.
About three weeks ago, Ray did an interview with MarketWatch. He said that the US will need to be massively re-engineered in order to avoid losing its reserve currency status. He went on to say that despite his concerns about the future of the dollar, he wasn't bullish on Bitcoin because bitcoin is not effective as a medium of exchange or a store of value.
Today, he did an interview with Yahoo Finance and had more say about Bitcoin and its future.
A lack of venues that will accept cryptocurrencies for purchase. “I today can’t take my bitcoin yet and buy things easily with it.”
Bitcoin and other cryptos are too volatile to be considered an effective store of wealth. That volatility also hurts bitcoin’s use transactionally because vendors won’t know how much they’re getting, Dalio said.
If bitcoin or other cryptos become “material,” Dalio predicted governments will “outlaw” it. “They’ll use whatever teeth they have to enforce that.”
“I don’t think digital currencies will succeed in the way people hope they would,” Dalio said.
Tell that to Stanley Drunkenmiller, who with George Soros, broke the bank of England back in 1992 when they shorted the British Pound. Drunkemiller is so good that once upon a time he had a stretch of 30 consecutive year of positive returns.
Stanley Druckenmiller recenttly said he was a dinosaur, but revealed he now owns some bitcoin—saying he's "warmed up to" the cryptocurrency as a store of value.
I honestly think Ray is saying one thing, but he has a Team doing down the "rat hole" to determine if he should buy Bitcoin. I wouldn't be surprised if Ray already owns Bitcoin and just putting on a "front" so he can purchase more before the Bitcoin price continues to move higher.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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