Billionaire hedge fund manager and philanthropist Ray Dalio has praised Bitcoin in his latest interview. Dalio observed that the bellwether cryptocurrency is effectively the gold alternative for the younger generation.
The Younger Generation Is Especially Keen On Bitcoin
Speaking to MarketWatch on Wednesday, Dalio indicated that bitcoin is viewed as gold by the younger generation. Notably, most crypto believers think Bitcoin is a better store of value than the trusty yellow metal due to its digital nature, verifiable scarcity, and immutable design.
Dalio, who founded the world’s largest hedge fund Bridgewater Associates, also argued that while Bitcoin doesn’t have intrinsic value, it has imputed value which indicates that the asset has “merit”:
“It’s almost the younger generation’s alternative to gold and it has no intrinsic value, but it has imputed value and it therefore has some merit.”
According to the billionaire investor, the fact that Bitcoin has attained a considerable level of adoption in recent years and that it has never been successfully hacked is a huge feat.
Nonetheless, he still doubts governments will tolerate it. The Bridgewater Associates founder reiterated his belief that governments could outlaw the top cryptocurrency if it becomes too successful. Dalio first said this in November 2020 during an interview with Yahoo Finance, noting that the US government would clamp down on Bitcoin the same way Franklin Roosevelt banned gold in 1933.
Dalio believes governments could potentially forbid capital flows to cryptocurrency. He, however, doesn’t think it’s possible for the flagship crypto to be banned across the globe.
Previously a skeptic, Dalio seemingly softened his stance earlier this year when he said Bitcoin is “one hell of an invention” and that his firm Bridgewater would be exploring it as a potential asset. Dalio also recently said Bitcoin is an interesting way for investors to diversify their holdings.
Dalio Would Choose Gold Over Bitcoin Every Time
A major narrative surrounding Bitcoin is that it can serve as an inflation hedge. As central banks around the world continue to stave off economic crises with more spending, pundits are increasingly speaking about the prospects of runaway inflation.
Despite the Fed starting to phase out its pandemic stimulus program (which entailed buying bonds to boost the monetary supply), Dalio predicts that the money being pumped into the economy will likely induce more inflation.
Dalio revealed in late May that he owns some Bitcoin. Nonetheless, he has a greater penchant for gold as the yellow alloy has proven its worth as a viable store of value for thousands of years.