Billionaire hedge fund manager Ray Dalio shared a positive outlook on the future of cryptocurrencies on Wednesday, saying they could become an “attractive alternative” to weakening fiat currencies.
Speaking with the Financial Times, Dalio was asked whether crypto could realistically replace the U.S. 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.”
Ray Dalio
Dalio, the founder of Bridgewater Associates, argued that most fiat currencies especially those weighed down by heavy debts will struggle to keep their value compared to “hard currencies.”
When asked if stablecoins’ exposure to U.S. Treasuries could create systemic risk, Dalio said he doesn’t believe so. However, he warned that “a fall in the real purchasing power of Treasuries” is a genuine concern, though well-regulated stablecoins should not face systemic risk as a result.
Ray Dalio Warns of U.S. Debt Crisis and Dollar Weakness
Ray Dalio’s remarks come as he continues to voice concern over the U.S. fiscal situation. Earlier this month, the billionaire investor advised putting about 15% of a portfolio into either gold or Bitcoin ($BTC/$USD), warning of a possible debt crisis and the weakening of the U.S. dollar due to heavy borrowing and rising deficits.
The U.S. economy is under pressure as the national debt has climbed past $37 trillion, raising alarms among economists and analysts. In the same Financial Times interview, Dalio cautioned that the country could face a “debt-induced heart attack” in the near future.
Entrepreneur and investor Anthony Pompliano has shared similar views, saying Bitcoin’s current rally is fueled by expectations of stronger growth, persistent inflation, and a “higher for longer” interest rate outlook.
