Ray Dalio, the founder of the world’s biggest hedge fund, Bridgewater Associates, called bitcoin ‘unhackable’ and disclosed that he was considering crypto as investments for new funds, offering clients protection against fiat currencies that are susceptible to inflation, via his company’s web page.
“At the same time, I greatly admire how Bitcoin has stood the test of 10 years of time, not only in this regard but also in how its technology has been working so well and has not been hacked. Still, to one holding digital/cyber assets at a time when the cyber offense is much more powerful than cyber defense, the cyber risk is a risk that I can’t ignore,” Dalio said.
He also commented on the ingenuity and uniqueness of the flagship crypto’s exhibit, taking into account that the world’s most popular crypto is barely 10 years old.
“I believe Bitcoin is one hell of an invention. To have invented a new type of money via a system that is programmed into the computer and that has worked for around 10 years and is rapidly gaining popularity as both a type of money and a store hold of wealth is an amazing accomplishment.”
What you should know: Bridgewater Associates is the world’s biggest hedge fund, founded in 1975. The firm serves institutional investors that include foundations, foreign governments, pension funds, endowments, and central banks.
- Its major strategy includes the global macro investing style based on economic macros such as currency exchange rates, inflation, and gross domestic product.
- Ray Dalio has been the man behind such a powerful hedge fund. He has grown one of the world’s biggest hedge funds, managing about $160 billion in assets.
Dalio went on by breaking down the qualities this digital gold asset possesses; the fact that it has a finite supply gives it a distinct advantage among many financial assets.
“Those who have built it and supported the dream of making this new kind of money a reality have done a fabulous job of sustaining that dream and moving Bitcoin (by which I mean it and its analogous competitors) into being an alternative gold-like asset.
“Because there aren’t many of this gold-like store hold of wealth assets that can be held in privacy and because the sizes of their markets are relatively small, there exists the possibility that Bitcoin and its competitors can fill that growing need,” he said.
However, he concluded his insightful write-up by warning about the risk Bitcoin had, on the account that a better alternative will be invented and pass it by.
“Although Bitcoin is limited in supply, digital currencies are not limited in supply because new ones have come along and will continue to come along to compete so the supply of Bitcoin-like assets should, and competition will, play a role in determining Bitcoin and other cryptocurrencies prices.
“In fact, I assume that better ones will come along and displace this one because that is the way the evolution of everything works—i.e., new ways of doing things and new things always have and always will replace old ways of doing things and old things. Since the way Bitcoin works are fixed, it won’t be able to evolve and I presume that a better alternative will be invented and pass it by. I see that as a risk,” he added.