Updated 19 Aug, 2021

Billionaire Ray Dalio Reiterates Regulation Could Hurt Crypto


Key Takeaways:

  • Bridgewater’s founder Ray Dalio says he’s still concerned over a crypto ban
  • “I own a very small amount of bitcoin. I’m not a big owner,” Ray Dalio states

Ray Dalio Still Warns Regulation Could Hurt Crypto

Ray Dalio is the founder of the largest hedge fund in the world, Bridgewater Associates. Dalio has once again voiced his concerns around potential regulatory frameworks by governments and central banks over the fast-emerging cryptocurrency market.

Regulation discussions among policymakers have accelerated their pace this year given the stratospheric rise in the value of digital currencies. Governments around the world, including the US, Canada, the UK and the eurozone, are all working to hammer out rules and requirements for every crypto market participant, both retail and institutions.

That being said, Ray Dalio said in an interview for CNBC Make It, he thinks there is “a reasonable chance” bitcoin could be outlawed by the US federal government. His remarks, made earlier in the month, came as a reiteration of his comments in March, when Mr. Dalio discussed bitcoin and cryptocurrencies when the market was hitting full steam right before bitcoin reached its all-time high of $64,800 in mid-April.

Ray Dalio pointed to 1934 when the US was in a major economic recession and President Franklin D. Roosevelt signed the Gold Reserve Act, effectively transferring all of the country’s privately held gold titles and certificates to the US Treasury Department.

According to Mr. Dalio, such a scenario is possible in the event of a steep decline in the economy or higher inflationary pressures. If these hypotheses were to materialize, Ray Dalio explained, federal governments across the world could be prompted to take similar action on bitcoin and other digital currencies.

While Ray Dalio’s concerns over bitcoin’s regulation are still on his mind, the US government is on its way to pass a troubling crypto requirement as part of the Senate-approved $1tn infrastructure bill.

Ray Dalio Says He Owns Bitcoin, Considers it Diversification

The 72-old billionaire, who now serves as Bridgewater’s chairman and co-CIO, told CNBC he owns “a very small amount of bitcoin”. “I am not a big owner,” he also said. “There are certain assets that you want to own to diversify the portfolio, and bitcoin is something like a digital gold.”

Staying true to his investment preferences as a gold bull, Mr. Dalio admitted. “If you put a gun to my head, and you said, ‘I can only have one,’ I would choose gold.”

Ray Dalio mentioned he considers his bitcoin investments as “diversification”. “By and large, I don’t really know whether bitcoin is going to go up or down. I could argue both sides of that,” he noted.

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