Founder of Bridgewater Associates: the world’s largest hedge fund by assets under management (AUM), Ray Dalio is one of the world’s most renowned investors. Their “Pure Alpha II” fund has historically performed well, with a +9.4% performance in the midst of the 2008 financial crisis. This year however, things took a turn. The Pure Alpha II fund’s performance reached -18.6% as of August 2020.
Dalio’s Opinion on Bitcoin
In a CNBC interview, Dalio stated that while Bitcoin may be great in theory he does not view it as a store of wealth and dismisses it as a speculative bubble.
“I may be missing something”
In one of his famous “Principles” tweets about disagreements, he was approached about his opinion about Bitcoin. Dalio stated that he may be missing something and would love to be corrected and listed the following reasons as to why he doesn’t hold a high opinion about it:
- Not a good medium of exchange
- Not a very good store-hold of wealth due to volatility
- If it becomes too large to compete with governments, they would outlaw it
- He can’t imagine “central banks, big Institutional investors, businesses or multinational companies using it”
The last point is very arguable with recent events such as the Iranian Central Bank allowed to fund imports with Bitcoin, Paul Tudor Jones investing in it and Grayscale crossing $10 Billion in AUM, as well as Microstrategy Solutions and Square investing a chunk of their treasuries in it.