Billionaire Ray Dalio refers to Bitcoin as ‘digital gold’

In an interview with CNBC’s Squawk Box at the World Economic Forum meeting in Davos, Switzerland (running from May 22 to May 26), founder of the world’s largest hedge fund Bridgewater Associates, renowned investor and bestselling author Ray Dalio spoke about the future of money and said that cryptocurrencies will be ‘outlawed, probably by different government’.

He also likened cryptocurrencies and Blockchain to ‘digital gold’.  When comparing cryptocurrencies and other scarce commodities like precious metals, he said that Bitcoin and altcoins will be an important asset. ‘I think a digital gold, which would be a Bitcoin type of thing is something that, probably in the interest of diversification of finding an alternative to gold, has a little spot relative to gold and then relative to other assets,’ he said.

Dalio said to a CNBC report at the World Economic Forum that ‘Of course, cash is still trash. I’m asking you, do you know how fast you’re losing buying power in cash?’ 

‘When I say cash is trash, what I mean is all currencies in [relation] to the euro, in relationship to the yen,’ Dalio explained on what he meant by ‘cash is still trash’. ‘All of those currencies like in the 1930s will be currencies that will go down in [relation] to goods and services.’ He argues that all fiat currencies will lose value compared with goods and services. 

He also spoke about his pessimistic outlook on the global economy and its threats. 

Retuers reporter Dan Burns highlighted specific threats like the Ukraine-Russian war, COVID-19 lockdowns in China and food shortages. 

He said that the Federal Reserve’s next monetary policies would be to sell. ‘The Federal Reserve will sell, individuals will sell, foreigners will sell, and the United States government will sell because it needs to fund its deficit,’ according to an excerpt from Dalio’s interview. ‘There will be a supply/demand problem, which will result in a squeeze,’ he continued.

In the past, Dalio took a negative stance on Bitcoin and cryptocurrencies, saying  that Bitcoin was not money because it does not serve as a store of value or a medium of trade, until November 2020. However, in May 2021, he revealed that he holds some Bitcoin as an inflationary hedge. In March Coindesk reported that Bridgewater Associates would use a ‘small slug of their fund’ deployed directly into digital assets. During the same month, Dalio also said that he believes governments will impose taxes on cryptocurrencies that will be ‘more shocking than expected’.

Photo: Flickr