Ray Dalio, the founder of Bridgewater Associates — the world’s largest hedge fund — believes regulators will shut down Bitcoin if it becomes too successful.
Speaking at the SALT conference in New York on Monday, Dalio said Bitcoin is a flourishing cryptocurrency, and a good alternative for making payments. However, he thinks regulators will shut down the cryptocurrency if it gains mainstream success.
“I think at the end of the day if it’s successful, they will kill it”, Dalio said.
In the SALT conference — an annual meeting for hedge fund managers in New York City — Cathie Wood, CEO of Ark Investment, projected Bitcoin’s worth will soar to $500,000 in the next five years. But Dalio dismissed the forecast as “hot air”.
Wood plans to launch a Bitcoin Exchange Trade Fund that will hold and track Bitcoin’s future performance. Though her investment firm is yet to receive regulatory approval.
Governments don’t want alternative currencies
Dalio’s comments come after SEC (Securities and Exchange Commission) Chairman Gary Gensler said US regulators are working round the clock to come up with a set of rules to protect crypto investors through better regulations of new digital assets.
Gensler last week threatened to sue Coinbase, a major US crypto exchange to list publicly, over plans to launch Lend — a new digital asset lending product that allows users to earn interest on various digital assets.
Coinbase wondered whether SEC should regulate or even consider the Lend product a form of securities in the first place. They hinted SEC has no such regulatory powers.
Dalio owns a decent amount of cryptocurrencies. But he says the amount is fairly small compared to his gold investments. He added that crypto investors need to diversify their crypto holdings as “governments don’t want alternative currencies”.
The cryptocurrency high will soon wane off
Although Bitcoin prices took a nosedive last week, other high-profile investors such as Stanley Druckenmiller and Paul Tudor didn’t mind buying the cryptocurrency.
Dalio predicts that in the next few years the crypto markets will experience a major shift. Thanks to the fiscal and monetary stimulus packages waning off.
Right now he thinks everyone is going through some cryptocurrency high. He said as soon as the high wanes, everything will somewhat change.
Dalio is allegedly planning to leave the industry in a year or two. His hedge fund, Bridgewater Associates, so far boasts more than $100 billion worth of assets.
