Bridgewater Associates founder Ray Dalio said, “I don’t think Bitcoin is” when it comes to cash.
Instead, the famed investor proposed an inflation-pegged coin that would keep you buying without the wild volatility typical of the leading cryptocurrency.
Dalio is not pro-Bitcoin
Speaking to CNBC, Dalio said that what Bitcoin “has accomplished” during its relatively short history is “pretty amazing,” adding that it doesn’t correlate with other assets in his view.
“I think it’s been pretty amazing what he’s accomplished over 12 years, but I think it’s unrelated to anything.”
He also said, “it’s a small thing that gets disproportionate attention.” Backing up this point, he mentioned that its market capitalization is one-third that of Microsoft. On top of this, many industries, including biotech, are much more attractive to him from an investment standpoint.
Dalio further shattered the idea that he is pro-Bitcoin by questioning its efficacy as money, a store of value, and a medium of exchange. However, he acknowledged that the monetary system is broken.
“It will not be cash; it is not going to be an effective store of wealth, it is not an effective medium of exchange. But we are in a world where money as we know it is in jeopardy. We are printing too much.”
Hinting at a currency collapse, which he expressed as “things open up in an evolutionary way,” Dalio envisions people rushing to find some form of safety.
fix the money system
When asked if that “security” was Bitcoin, Dalio insisted that neither Bitcoin nor fiat-backed stablecoins would be a perfect fit.
“I think if you want a digital currency, you have to do something different. I don’t think stablecoins are good because then you get a fiat currency again.
Instead, an inflation-linked currency would be a feasible alternative. Through an inflation-linked currency, people can secure their purchasing power. While saving in Bitcoin is subject to wild volatility swings, Dalio said.
“If you created a currency that says, okay, this is purchasing power where I know I can save and put my money in over a period of time, and I can transact anywhere, I think that would be a good currency.”
Frax Price Index (FPI) is an example of an existing currency that derives its price by pegging it to real-world consumer prices.
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