Billionaire Ray Dalio has admitted that he owns bitcoin, though how much he can presently say is in his private stash remains undisclosed. Nevertheless, it is always positive to see that the big money hounds of the world are beginning to take bitcoin and cryptocurrency seriously, and thus we can likely expect to see the asset reach mainstream status in the coming months.
Ray Dalio Warns Crypto Lovers of Government Regulation
As a founder of one of the largest hedge funds in the world, Dalio says that the world’s number one digital currency by market cap is arguably a “better inflation hedge than bonds,” and that the only thing scary about it is its “success.” Given that the currency has incurred massive spikes over the past 12 months, he believes the primary danger to bitcoin exists in the form of limit-placing regulation, which he thinks could be trying to edge its way into the digital monetary spectrum.
In a recent interview, Dalio commented:
Personally, I would rather have bitcoin than a bond… I think bitcoin’s biggest risk is its success.
He took note of the fact that China – which is known for its up-and-down relationship with bitcoin – is already working to place serious limits on both mining and trading, which resulted in a massive price drop for bitcoin over the weekend. At the time of writing, the currency has begun to reel back from this rough period, though there is still a lot of ground to cover as one unit is only trading for about $38K.
Dalio is unique in that he is one of the first real billionaires to change his mind when it comes to bitcoin. Up until late 2020, he has often been recorded downplaying the currency’s benefits. In the past, he has said things like:
Unlike gold, which is the third highest reserve asset that central banks own, I cannot imagine central banks, big institutional investors, businesses or multinational companies using [bitcoin].
Changing His Mind
Now, he appears to have reversed that stance, and says that governments could ultimately gain control over bitcoin should they so desire. He is warning investors that they need to watch out:
One of the great [risks]… is the government having the capacity to control almost any of them – bitcoin or [other] digital currencies. They know where they are, and they know what is going on… My experience with the government is they can regulate whatever they want when they feel like it… and if [bitcoin] gets bigger and bigger, it will be regulated.
Already, we are beginning to see signs that regulators are trying to play a key role in the future of bitcoin. The U.S., for example, is now saying that all crypto transactions exceeding $10,000 must be reported to the proper financial authorities as a means of attacking illicit behavior.