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.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
China’s economic recovery isn’t gaining the momentum money managers are awaiting.
Data from China Beige Book show that the economic green shoots glimpsed in August didn’t sprout further in September. Job growth and consumer spending faltered, while orders for exports came in at the lowest level since March, according to a monthly flash survey of more than 1,300 companies the independent research firm released Thursday evening.
Consumers’ initial revenge spending after Covid restrictions eased could be waning, the results indicate, with the biggest pullbacks in food and luxury items. While travel remains a bright spot ahead of the country’s Mid-Autumn Festival, hospitality firms and chain restaurants saw a sharp decline in sales, according to the survey.
And although policy makers have shown their willingness to stabilise the property market, the data showed another month of slower sales and lower prices in both the residential and commercial sectors.
Even more troubling are the continued problems at Evergrande Group, which has scuttled a plan to restructure itself, raising the risk of a liquidation that could further destabilise the property market and hit confidence about the economy. The embattled developer said it was notified that the company’s chairman Hui Ka Yan, who is under police watch, is suspected of committing criminal offences.
Nicole Kornitzer, who manages the $750 million Buffalo International Fund (ticker: BUIIX), worries about a “recession of expectations” as confidence continues to take a hit, discouraging people and businesses from spending. Kornitzer has only a fraction of the fund’s assets in China at the moment.
Before allocating more to China, Kornitzer said, she needs to see at least a couple quarters of improvement in spending, with consumption broadening beyond travel and dining out. Signs of stabilisation in the housing market would be encouraging as well, she said.
She isn’t alone in her concern about spending. Vivian Lin Thurston, manager for William Blair’s emerging markets and China strategies, said confidence among both consumers and small- and medium-enterprises is still suffering.
“Everyone is still out and about but they don’t buy as much or buy lower-priced goods so retail sales aren’t recovering as strongly and lower-income consumers are still under pressure because their employment and income aren’t back to pre-COVID levels,” said Thurston, who just returned from a visit to China.
“A lot of small- and medium- enterprises are struggling to stay afloat and are definitely taking a wait-and-see approach on whether they can expand. A lot went out of business during Covid and aren’t back yet. So far the stimulus measures have been anemic.”
Beijing needs to do more, especially to stabilise the property sector, Thurston said. The view on the ground is that more help could come in the fourth quarter—or once the Federal Reserve is done raising rates.
The fact that the Fed is raising rates while Beijing is cutting them is already putting pressure on the renminbi. If policy makers in China wait until the Fed is done, that would alleviate one source of pressure before their fiscal stimulus adds its own.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual