If Bitcoin Is Successful, ‘They’ll Kill It’
Founder of world’s largest hedge fund weighs in on cryptocurrency.
Founder of world’s largest hedge fund weighs in on cryptocurrency.
“I think at the end of the day if it’s really successful, they’ll kill it. And they’ll try to kill it. And I think they will kill it because they have ways of killing it. But that doesn’t mean it doesn’t have a place—a value and so on.” – Ray Dalio
Ray Dalio, billionaire investor and founder of Bridgewater Associates, the world’s largest hedge fund, said that the more successful that Bitcoin becomes, the more likely that it will get neutralized by governments and regulators supporting traditional monetary systems.
In an interview with CNBC on Wednesday, Dalio reiterated comments that he has made in the past, repeating that governments have the power to undercut the growth of the nascent cryptocurrency market, including Bitcoin and Ether on the Ethereum blockchain, which may pose a threat to conventional finance and global central banks.
Dalio said that Bitcoin may not “have intrinsic value” but said that it could still be useful in a diversified portfolio. The hedge-fund manager said that he thinks it’s worth considering all the alternatives to cash and all the alternatives to some of the financial assets.
“I’m no expert on it … I think diversification matters,” he said. “Bitcoin has some merit,” he said.
“The real question is how much [does an investor] have in gold versus how much you have in Bitcoin,” he noted.
For his part, Dalio explained that he maintains “a certain amount of money in Bitcoin… it’s a small percentage of what I have in gold, which is a small percentage of what I have in my other assets.”
Dalio’s comments come as traditional markets are struggling to rise, with the Dow Jones Industrial Average, the S&P 500 index and the Nasdaq Composite aiming to break a recent downbeat trend in trading.
Dalio, a prominent figure in the world of finance, has a networth of US$20 billion, according to Forbes.
In the past, Dalio, founder of the world’s largest hedge-fund firm, Bridgewater Associates, has said that he’s “very bullish” about crypto as a digital-clearing mechanism, perhaps referring to decentralized finance, or DeFi.
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A sharp rebound in tourism in Europe’s sunbelt powers its economic rebound as core manufacturing centres struggle to recover
Europe’s economy has a north-south divide—and now it’s the poorer south that is powering the region’s return to growth.
Southern Europe, which for decades has had lower growth, productivity and wealth than the north, powered an upside-down recovery on the continent at the start of the year. Buoyant tourism revenue around the Mediterranean helped to offset sluggishness in Europe’s manufacturing heartlands.
The south’s transformation from laggard into growth engine reflects both a rapid rebound in visitor numbers from the collapse during the Covid-19 pandemic and a series of blows the continent’s large manufacturing sector has suffered, from surging energy prices to trade conflicts.
Now growth in the south is more than offsetting the north’s manufacturing malaise: As a whole, the eurozone economy grew at an annualised rate of 1.3% in the first quarter, ending nearly 18 months of economic stagnation in a sign that the currency area is recovering from the damage done by Russia’s invasion of Ukraine.
It was the eurozone’s strongest performance since the third quarter of 2022, and approached the U.S. economy’s 1.6% first-quarter growth rate, which was a slowdown from a racy pace of 3.4% at the end of last year.
In the 2010s, Germany helped to drag the continent out of its debt crisis thanks to strong exports of cars and capital goods. Between 2021 and 2023, Italy, Spain, Greece and Portugal contributed between a quarter and half of the European Union’s annual growth, according to a report last year by French credit insurer Coface —a trend now confirmed and amplified in the latest data.
In the first quarter, Spain was the fastest-growing of the big eurozone economies. It and Portugal recorded growth of 0.7% in the three months through the end of March from the previous quarter, while Italy’s economy grew by 0.3%. France and Germany both grew by 0.2%, the latter rebounding from a 0.5% quarter-on-quarter contraction at the end of last year.
This means Germany’s economy has grown by 0.3% in total since the end of 2019, compared with 8.7% for the U.S., 4.6% for Italy and 2.2% for France, according to UniCredit data.
In Spain, strong growth “seems to have been entirely due to strong tourism numbers,” said Jack Allen-Reynolds, an economist with Capital Economics. Tourism accounts for around 10% of the economies of Spain, Italy, Greece and Portugal.
The euro rose by about a quarter-cent against the dollar, to $1.0725, after the latest growth and inflation data were published.
The recovery comes as the European Central Bank signals it is preparing to reduce interest rates in June after a historic run of increases since mid-2022 that took it the key rate to 4%. Inflation in the eurozone remained at 2.4% in April, while underlying inflation cooled slightly, from 2.9% to 2.7%, according to separate data published Tuesday.
“The ECB hawks will point to the strong GDP number as [an] argument that ECB can take its rates lower gradually,” said Kamil Kovar, senior economist at Moody’s Analytics.
The eurozone economy has flatlined since late 2022 as Russia’s attack on its neighbor sent food and energy prices soaring in Europe and sapped business and household confidence. Gross domestic product fell in both the third and fourth quarters of last year, meeting a definition of recession widely used in Europe, but not in the U.S.
Southern Europe is one of only a handful of regions where international tourist arrivals returned to pre pandemic levels last year, according to United Nations data. Tourism revenue across the EU was one-quarter higher in the three months through the end of last June than in the same period in 2019, according to Coface data.
The recovery in international tourism was “notably driven by the arrival of many Americans who…were able to take advantage of favorable exchange rates,” Coface analysts wrote. “On the other hand, the end of the zero-Covid policy in China has initiated a gradual return of Chinese tourists, although remaining below 2019 levels.”
In Portugal, the number of foreign tourists hit a record of more than 18 million last year, up 11% compared with the prepandemic year of 2019, official data showed in January. American tourists in particular have returned to Europe in force.
Tourist numbers in Asia Pacific and the Americas continued to lag 2019 levels by 35% and 10% last year, respectively, the data show.
It is unclear how much further the tourism boom can run, but economists expect the region’s economic recovery to strengthen later this year as cooling inflation boosts household spending power and lower energy costs aid factory output.
Recent surveys point to an improved outlook for growth. Consumer confidence has risen to its highest level in two years, and a leading business-sentiment index has shown steady improvement from the start of 2024.
“We think that the combination of a robust labor market, comparatively strong wage hikes and lower inflation compared with last year will finally lead to a moderate recovery in consumer spending in the next few quarters,” said Andreas Rees , an economist with UniCredit in Frankfurt.
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