Ray Dalio, the founder of the American investment company Bridgewater Associates, said that he himself prefers to invest in bitcoin rather than in bonds. He also clarified during the CoinDesk conference on May 6, 2021, that he already has bitcoins and he clearly preferred them to bonds.
This isn't the first time Dalio has talked about bonds as an unprofitable asset. Back in March, he said that investing in bonds is foolish because the yield on them is less than the rate of inflation. Thus, inflation benefits from all bond yields.
And if investors continue to be as attentive to cryptocurrency, government bonds will face significant outflows, which means that the government has forgotten how to raise money.
However, Dalio noted that the biggest risk for bitcoin is its success. In the event that most investors choose Bitcoin over bonds, governments will feel threatened, leading to repression in the crypto market.
According to the hedge fund manager, one way to measure this is the relative value of bitcoin against gold. He explained that if central banks' gold holdings and jewelry were excluded from the gold mining industry, the yellow metal would be worth about $ 5 trillion. This is about five times the value of bitcoin.
Mr. Dalio said that the US dollar is on the verge of devaluation, and China is the greatest threat to the role of the US dollar as the world's reserve currency. He also compared the current situation to 1971 by explaining in the simplest and most understandable way:
"Do you need more money? We can print them out. But at the same time, increase taxes because only taxes give the dynamics of economic growth. This is the control over the movement of capital. This will cause the growth of stocks, bitcoins, real estate, gold, the growth of everything, as it was in 1971. It's exactly the same situation we're in right now."
Thus, much depends on future technological innovations. "The world is changing at an incredible rate," Dalio stated. He added that no matter who wins in this race of new technologies, the first places will always be occupied by economic and military relations. And that's what the next five years will look like.