Traditional Investor Ray Dalio: Bitcoin Fails As Money

The prominent traditional investor Ray Dalio, commented about bitcoin recently saying that the cryptocurrency fails to serve the purpose of money. However, he also noted that people should look for an alternative of cash as the government can print out as much as they want which will end up decreasing its value as we are reading in our Bitcoin news today.

The traditional investor Ray Dalio is one of the most popular US investors and hedge fund managers. He is the co-founder of the investment company Bridgewater Associates and while speaking at the World Economic Forum in Davos, Dalio commented more about Bitcoin, gold and the entire financial system of today. According to Dalio, the largest cryptocurrency has a very long way to go if it wants to serve as a real method of payment since high volatility is its main drawback and has to overcome this obstacle in the near future. When he was asked whether people should consider purchasing Bitcoin as buying gold, he answered:

 “There’re two purposes of money- a medium of exchange and a store hold of wealth. And Bitcoin is not effective in either of those cases now. […] It’s too volatile. Because of the volatility, you can’t go next to it.”

He continued to explain that the potential stablecoin of Facebook Libra, could eventually provide the needed stability in the future since it could serve as a cryptocurrency that is backed by several financial assets thus reducing its volatility. Dalio also shared a negative opinion of fiat money saying that ‘’cash is trash.
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’’ He believes that the world has a fiat-monetary system right now that allows governments to continue printing cash and this could lead to more economic turmoil since the fiat currencies will keep on dropping.

However, the popular investor noted that even though the worldwide economy is doing good so far, people should not be too scared to enter the markets but they will have to have well-diversified portfolios. He added that investors should be global and emphasized that it is extremely important to purchase gold. He said that the central banks will buy gold instead of Bitcoin. The former proves itself as a ‘’reserve currency for a thousand years.’’