Ray Dalio on Crypto and the Future of Fiat
Former Bridgewater Associates CEO Ray Dalio has remarked that cryptocurrency currently functions as an “alternative currency” with a limited supply.
Dalio is confident that cryptocurrency could become a more appealing option if the supply of the US dollar increases or if there is a significant decline in demand for the greenback.
He predicts that fiat currency will find it challenging to serve as an efficient “store of wealth” compared to hard assets.
According to Dalio, a long-term “big debt cycle” is nearing its conclusion, and central banks will have to confront tough decisions.
Dalio believes that if central bank intervention ceases, interest rates will rise due to natural market forces. While this may help temper inflation, it could also lead to a potential wave of defaults, as companies and individuals would struggle to manage their debt.
The alternative, as per Dalio, is to create even more money, a process known as quantitative easing (QE). This, he asserts, would further erode confidence in fiat currency.
Dalio envisions a relentless cycle in which central banks are compelled to print additional money to manage existing debt.
