Billionaire hedge fund manager Ray Dalio expressed optimism on Wednesday about the prospect of cryptocurrencies becoming an “attractive alternative” to struggling fiat currencies.
Dalio Bets On Crypto, Downgrades Fiat
During an interview with the Financial Times, Dalio was asked if cryptocurrencies could “meaningfully” replace the dollar.
“Crypto is now an alternative currency that has its supply limited, so, all things being equal, if the supply of dollar money rises and/or the demand for it falls, that would likely make crypto an attractive alternative currency,” he responded.
Dalio, the founder of Bridgewater Associates, argued that most fiat currencies, particularly those burdened with large debts, will face difficulties maintaining their value and will fall relative to “hard currencies.”
On the question of whether the exposure that stablecoins have to Treasuries could pose a systemic risk, Dalio stated,” I don’t think so. However, I see a fall in the real purchasing power of Treasuries as being a real risk. That shouldn’t produce any systemic risk in stablecoins if they are well-regulated.”
Notably, Dalio published the entire interview on X in response to what he said was a “mischaracterization” by the publication.
Dalio’s 15% Allocation Advice
Dalio’s comments come in light of the concerns he raised about the U.S.’s fiscal situation. Earlier this month, he advised investors to consider allocating 15% of their portfolio to either gold or Bitcoin (CRYPTO: BTC), citing a potential debt crisis and the weakening of the U.S. dollar due to excessive borrowing and deficit spending.
The U.S. economy is facing a potential crisis as the national debt, currently over $37 trillion, continues to rise, sparking concerns among economists and analysts. In the same FT interview, Dalio warned of a “debt-induced heart attack” in the relatively near future.
Similar observations were made by entrepreneur and investor Anthony Pompliano previously, who said that Bitcoin's ongoing cycle was driven by expectations of stronger growth, higher inflation and a higher for longer interest rate policy
Price Action: At the time of writing, BTC was exchanging hands at $111,426, up 0.08% in the last 24 hours, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
