It’s always refreshing to see someone who wasn’t a bitcoin believer change their mind. Today, the cryptocurrency appears to have added another “fan” to its roster. That person is Ray Dalio, a billionaire and co-founder of the hedge fund Bridgewater Associates.
Ray Dalio Now Sees Bitcoin Through a New Lens
In the past, bitcoin has often attracted criticism and scrutiny for its vulnerability to price swings and its volatile behavior. While it’s easy to become wealthy overnight with the help of cryptocurrency, it’s also possible to lose everything, as we saw towards the end of 2018, a time when bitcoin lost roughly 70 percent of its value over the course of 11 months.
However, this year appears to be quite different for bitcoin in that people are no longer seeing it as a speculative asset. Rather, it has garnered a reputation as the world’s newest “safe haven.” It’s now looked at as a tool for hedging one’s wealth and keeping one’s money safe during times of economic strife, and Dalio seems to be getting the picture despite criticizing the world’s number one digital currency by market cap just a month earlier.
On Twitter, Dalio proposed the following:
I can’t imagine central banks, big institutional investors, businesses or multinational companies using it. If I’m wrong about these things, I would love to be corrected.
Well, better late than never as they always say, right?
In a recent interview, Dalio compares the asset favorably to gold, claiming it has some of the same features. He states:
I think that bitcoin and some other digital currencies have over the last ten years established themselves as interesting gold-like asset alternatives, with similarities and differences to gold and other limited-supply, mobile (unlike real estate) store holds of wealth.
Dalio later posted this same explanation to the social media platform Reddit following an “Ask Me Anything” session. He further commented that:
As [for] bitcoin relative to gold, I have a strong preference for holding those things which central banks are going to want to hold and exchange value in when they are trying to transact.
From Hater to Believer?
Dalio is famous for referring to bitcoin as a “bubble” in the year 2017, and for many people, the following months would ultimately prove Dalio right, only this time, things are quite different. The currency’s rally appears to be driven by institutional players rather than retailers, and thus bitcoin is maintaining a certain momentum it lacked three years ago.
For example, bitcoin just gave everyone a scare when it dropped into the $17,900 range, more than $1,000 less than where it stood just a week or so ago. Now, the currency has risen back to $18,800 at the time of writing, giving everyone reassurance that bitcoin isn’t planning to traverse the doldrums this holiday season.