Ray Dalio questions Bitcoin’s ability to replace fiat

Dalio doubts Bitcoin and stablecoins can replace fiat, citing volatility and limited use as money.

Fiat currency as an effective store of value is ‘in serious danger’, but Bitcoin and stablecoins will not fulfil this role. This was stated by investor and billionaire Ray Dalio.

«#Bitcoin has no relation to anything. It’s a tiny thing that gets disproportionate attention,» says @RayDalio on #crypto. «The value of $BTC is less than 1/3 of $MSFT stock. It’s not an effective store of wealth. But we are in a world where money as we know it is in jeopardy.» pic.twitter.com/Cc7o2TwkxG

— Squawk Box (@SquawkCNBC) February 2, 2023

According to the founder of Bridgewater Associates, mass issuance of reserve currencies makes him doubt that they represent a form of ‘effective money’.

«We live in a world where money as we know it is under threat. We print too much, and this concerns not only the United States», — he said.

In Dalio’s view, Bitcoin has achieved a lot in 12 years, but it remains too volatile to assume the status of money.

«Bitcoin is not an effective store of value, not an effective means of exchange. The first cryptocurrency is a tiny thing that attracts disproportionately large attention. For me the value of Bitcoin is less than 1/3 of the value of Microsoft stock», — he explained.

He arrived at similar conclusions about stablecoins, which are a ‘copy’ of fiat.

As a panacea, he sees an inflation-linked coin capable of preserving the purchasing power of the population.

«Inflation-linked bonds come the closest to this. If you created a coin with the inscription “OK, this is purchasing power”, in which I could save and invest my money over a period of time and transact anywhere, I think this would be a good coin», — he said.

The founder of Bridgewater Associates forecast the appearance of coins that will be attractive and viable unlike Bitcoin.

Back in May 2022, Dalio called Bitcoin a good hedge against inflation, but not a full substitute for gold.