Ray Dalio, a prominent hedge fund manager and former CEO of Bridgewater Associates, has raised the issue of cryptocurrencies as an alternative currency given the debt risks associated with the dollar and other reserve currencies.
Cryptocurrencies Against Dollar Risks
Dalio points out that the limited supply of cryptocurrencies makes them appealing in the face of increasing dollar supply and/or declining demand. "Crypto is now an alternative currency with a limited supply, 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 emphasized.
Rising Gold and Crypto Prices
The expert noted broader risks posed by high debt levels in reserve currency governments. Dalio believes that the debt issues of the dollar and other reserve currencies undermine their attractiveness, contributing to rising gold and cryptocurrency prices in recent years.
Stablecoins and Treasury Risk
Regarding stablecoins, Dalio indicated that their holdings of U.S. Treasuries are unlikely to trigger systemic risks. However, he cautioned that a drop in the real value of Treasuries is a legitimate concern. He stated that this issue is unlikely to cause serious problems as long as stablecoins are well-regulated.
Dalio’s comments reflect a broader view among financial experts: with many fiat currencies under pressure, cryptocurrencies and gold are increasingly seen as safe stores of value and protection against declining currency strength.
