Dalio said the greatest risk attached to BTC would be its success. He went further to explain that just as digital assets are gaining recognition, the possibility of a greater return on investments might make the investors prefer them over bonds. If more people deflect from bonds by selling them to buy crypto instead, this could be a threat to the government when it comes to raising money. Dalio, however, referred to the government losing money as an existential risk.
He claims that investing in bonds has turned into a stupid thing to do because the profits from it are less than inflation. He also concurred that he would prefer to acquire bitcoin than owning bonds. In fact, he added that he does own bitcoin. Despite being a BTC owner, a larger percentage of the $151 billion that is in the care of his firm is in the United States Treasuries and other government bonds.
Dailo’s BTC Reversal
Though Dailo is canvassing for Bitcoin currently, his tune only changed relatively recently. Giving a speech at the World Economic Forum in January 2020 in Davos, Switzerland, Ray Dailo encouraged investors to have a more diversified portfolio. However, his recommendation is just hard assets such as gold, and he utterly advised every investor against investments in the crypto market like Bitcoin.
He referred to the asset class as a volatile one, and such a project as Diem from Facebook stood a better chance of getting widespread adoption. He also cited that the governments’ central banks were unlikely to keep bitcoin in the same manner they would hoard gold.
Then, about a year later, in January 2021, Ray Dailo referred to Bitcoin as “one hell of an invention.” Now, he was looking at cryptocurrencies as the best investments for the new funds in the market that can offer protection to clients against inflation.
Dalio wrote a note to clients and later posted it on Bridgewater’s website. He said: “to have come up with an idea of a new type of money through a system programming that has been sustained ten years and is getting adopted into the mainstream industry as a type of money as a store of value is a cool accomplishment.”
Dalio, however, admitted that it still looks challenging to put a value on digital assets. He highlighted the risk attached to Bitcoin irrespective of its potential to disrupt the monetary system. Among the risks he mentioned are the subjections to government restrictions because they want to control the supply of money and vulnerability to hacking.