According to U.Today, Ray Dalio recently shared his thoughts on Bitcoin in a blog post, hinting at a possible bullish stance. Dalio discussed the characteristics of good money, which he defined as a means of trade and a place to store wealth that is globally accepted. Currently, the top contenders are the dollar, euro, yen, and Chinese renminbi. However, Dalio pointed out that these currencies are all tied to debt, meaning that holding onto these currencies equates to holding onto debt liabilities.
Dalio emphasized that when there is a high risk of debts not being repaid or being repaid in devalued money, confidence in the currency decreases. If a country is burdened with excessive debt, its central bank may resort to printing more money, leading to devaluation. Unlike these currencies, gold is not backed by debt and is more resilient to devaluation caused by inflation. Central banks and investors favor gold because it remains stable even in the face of debt defaults and inflation. It is the third most held reserve after the major currencies.
Dalio also compared cryptocurrencies to gold, stating that they are non-debt forms of money. While some might argue that gems or art serve a similar purpose, being non-debt, portable, and accepted storeholds of value, Dalio’s focus is on recognized financial safeguards. He stated that when the system is functioning properly, without debt or inflation crises, and governments manage their monetary duties without devaluing their currency, then financial assets are solid. However, in times of financial instability, Dalio suggests that gold is a good asset to own as it is a reliable hedge and a diversifier in his own portfolio. He clarified that he was not providing direct investment advice, but merely sharing his perspective on the markets.