Hedge fund owner and CEO of Bridgewater Associates, Ray Dalio, has warned investors that cryptocurrency could be banned and advised against holding cash and bonds. A controversial statement for sure, but it’s not easy to ignore the advice of a man with a net worth of over $ 17 billion and a life of investing experience.
Ray Dalio founded Bridgewater Associates in 1975 in New York City to change the investment landscape. Despite a crushing setback in 1982, he rebounded, and today his hedge fund manages around 150 billion dollars in assets. The Monetary Assistant has achieved legendary status in the financial community for his innovative style and ideas.
In May of last year, he revealed that he now wants to spend his days helping others achieve their dreams and become the best they can be.
He warned people against building up liquidity as the US economy undergoes dramatic change as the pandemic has fueled increased debt creation and the monetization of debt has negatively affected them. interest rate. The author of Principles: Life and work, a book on investment and management philosophies, Ray Dalio strongly believes in minimizing the possession of cash and bonds.
In his article on LinkedIn, he states, “I think one should consider minimizing the possession of cash and bonds in dollars, euros and yen (and / or borrowing in these) and placing funds in a very diversified portfolio of assets. , including inflation-hedging stocks and assets, especially in countries with healthy finances and well-educated, civilian populations that have internal order.
He then presents graphics and arguments that support his opinion and explain how the pandemic beheaded the world order. The three main foreign exchange reserves, the United States, Europe and Japan, have struggled to gain a foothold since the onset of the crisis. While he praised China’s progress in the past and kept an eye on the emerging superpower, he laments America’s inability to keep pace.
The billionaire insists on the importance of not putting all of his eggs in one basket. Ray Dalio’s investment advice is to be careful and study the socio-political landscape before making monetary decisions.
He thinks it is time to start investing in cryptocurrencies and urges investors to keep some amount in Bitcoin. He recommends starting with around 1-2%. A diversified portfolio will help offset losses, if any, and also give you leverage. Previously, he had expressed his doubts about cryptocurrencies and their valuations as they tend to be volatile. But, in December 2021, he revealed that he was very impressed with the way bitcoin is written, how they managed to stay safe from hackers and achieve growth. He shares that bitcoin and gold will work as an inflation hedge. Dalio sees bitcoin as a new gold.
Only a limited amount of Bitcoin is available for mining. This is how it was designed and could be one of the factors that some investors believe it could generate higher returns over the long term. Once bitcoin becomes an established entity in the market, demand could far exceed supply, increasing its value.
Dalio, however, cautions against being overly optimistic. He insists that governments have always been wary of cryptocurrencies. Perhaps this is the reason why he mentions that it may be prohibited in certain places. Dalio believes that since this is a troubled area, governments would find it difficult to regulate it and therefore decide to ban it.
Recently, the minutes of a Federal Reserve system meeting caused an uproar in the markets, with bitcoin stocks taking a hit. However, Ray Dalio’s investment advice could be of great help to you as companies are slowly starting to accept cryptocurrencies as a valid form of payment.