In the face of inflation, bitcoin (BTC) is not a reliable asset, says Ray Dalio

Billionaire Ray Dalio is one of those crypto-pessimists who do not bet on bitcoin (BTC). Already in 2022, with the queen of crypto under further bearish pressure, the founder of Bridgewater Associates drew the attention of the crypto community to a number of vagaries facing bitcoin (BTC). Risks that the prudent investor should not ignore, he said. Although he later admitted to holding bitcoin (BTC) in his portfolio, Ray Dalio’s position on the intrinsic value of this asset has not fundamentally changed.

Bitcoin (BTC), an inefficient means of exchange?

Since it has regained color, BTC has been the favorite of investors and the crypto community. Ray Dalio, the founder of the asset management company, Bridgewater Associates is not left out of this frenzy. In an interview he gave Thursday, February 2, to the American channel CNBC, the billionaire delivered the analysis what he is doing about the crypto market as a whole and bitcoin (BTC) in particular.

Although he believes that investor interest in cryptos in general will continue to increase, Dalio believes that bitcoin (BTC) does not fit into this outlook. For the manager, although this crypto has succeeded for more than a decade in establishing itself as the queen of cryptos in terms of value, the asset has not demonstrated any real ability to maintain this value over time.

Ray Dalio’s position on the matter

This represents, according to him, a real obstacle to his current and future credibility. Because, given the galloping inflation, the question that every serious investor asks is whether an asset offers, over time, interesting guarantees in terms of a store of value.

The strong depreciation seasons that BTC is undergoing prove that the answer to this question has not been found. Difficult, in this context, to bet on the BTC. “It will not be an effective currency. It is not an efficient store of wealth. It’s not an efficient medium of exchange.” hammered Ray Dalio.

Why not a token inflation-backed alternative to BTC?

Dalio thinks that a crypto, linked to inflation, would offer better possibilities than bitcoin (BTC) to preserve the value of wealth. “If one creates a token that offers buying power that I know I can save and put my money in over a period of time and then transact everywhere, I think that would be a good token. I don’t think bitcoin is the solution”said the billionaire.

For Dalio, as long as the issue of the extreme volatility of the prices of cryptos such as bitcoin (BTC) is not resolved, the latter will have difficulty in imposing themselves in transactions. It is for this reason, he argues, that the dollar, euro, and gold will continue to be priority reserve assets for central banks.

It is also for this reason that he believes that central bank digital currencies (CBDC) will grow in size. This is because CBDCs will be an efficient medium of exchange and a store of wealth that governments can control, three fundamental characteristics of credible currency that BTC does not offer, he adds.

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