Updated 28 May, 2021

Bridgewater CEO Ray Dalio Warns Crypto Regulation Could Soon Come


Key Takeaways:

  • Ray Dalio “very bullish” on Bitcoin and crypto assets
  • The billionaire investor sees the success of cryptos as their biggest risk

Bridgewater CEO says Bitcoin and crypto assets are ‘exciting’

Ray Dalio, the founder and co-chief investment officer of the largest hedge fund in the world, Bridgewater, clearly expressed he views the future of cryptocurrencies as “exciting and unknown”. In a discussion at the Wall Street Journal “Future of Everything Festival”. In a 30-minute interview, the billionaire hedge-fund manager had a chance to give his take on the rapidly-developing digital asset market.

“Exciting and unknown,” Ray Dalio said in reply of a question how he saw the future of crypto. “Crypto as a digital clearing mechanism and so on, very exciting, very bullish. Crypto as a storehold of wealth, very interesting. Probably will be important for us.”

He went further to expand that the biggest risk for a cryptocurrency is “its success”. “As a storehold of wealth, no government wants to have an alternative currency,” he said. Ray Dalio has been sounding the alarm that the crypto market could soon be surveilled by regulators. If the evolving space is ever going to be adopted by mainstream finance, this might be the case. Mr. Dalio, however, thinks that the regulations coming after bitcoin could impose “shocking” taxes. This would come into effect if governments and central banks feel their monetary sovereignty is threatened.

Crypto Industry Regulation Well Underway

The US is already taking steps toward regulating bitcoin and the cryptocurrency market. The US Department of Treasury last week announced business who transact $10,000, or more, in cryptocurrency, should report it to the Internal Revenue Service (IRS).

Ray Dalio has long been interested in the cryptocurrency market. More recently, he became a supporter of the crypto revolution. In March, Mr. Dalio said Bitcoin “is like digital cash” that could also serve as an alternative investment to gold. He pointed several benefits of the flagship cryptocurrency, including being a storehold of wealth. The investor said there is “a good probability” of governments outlawing Bitcoin.

In light of this, a few countries have already banned Bitcoin and cryptocurrencies in one way or another. Most recently, China banned all banks and other financial institutions from transacting or dealing in cryptos. In Russia, using cryptos as payment for good or services is illegal. While interest in cryptocurrencies was booming in Turkey in recent months, in mid-April, Turkey’s central bank banned the use of cryptocurrencies for purchases. And Iran this week banned cryptocurrency mining for four months as the country has been experiencing power outages, sometimes lasting up to 6 hours a day.