Join myFT Daily Digest to be the first to know about Bitcoin news.
Ray Dalio said regulators would shut down bitcoin if the crypto-currency became too successful and rejected predictions from Ark Invest’s Cathie Wood that its price would double within five years.
The founder of Bridgewater Associates said during the Salt Conference on Wednesday that bitcoin would be a viable investment alternative as long as it is accepted for payments, but added: ‘I think at the end of the day if it is really successful. . .[regulators]will try to kill it. ”
He also had a problem with Wood, who said at the Salt Conference on Monday – an annual meeting of hedge fund managers in New York – that she expects bitcoin to be worth $ 500,000 in five years, a prediction Dalio said “does not make sense”.
Wood’s investment firm has announced plans for a bitcoin exchange traded fund, although it has not yet received regulatory approval.
Dalio’s comments come after Gary Gensler, chairman of the US Securities and Exchange Commission, called on Congress to exercise more regulatory powers over the ‘Wild West’ of cryptocurrencies.
The SEC last week warned Coinbase, the first major US publicly traded cryptocurrency exchange, that this would happen sue the company as it launches a new product for lending digital assets called Lend.
The news has sparked a debate over whether such products, which allow users to earn interest on certain digital assets, should be considered securities and thus fall under the regulator’s jurisdiction.
Dalio said he bought cryptocurrencies himself, but his share is still small relative to his investments in gold. He added that “governments do not want alternative currencies”, but that investors should diversify their holdings.
The price of bitcoin has risen by almost 50 percent this year with high-profile investors such as Paul Tudor Jones and Stanley Druckenmiller throwing their weight behind the cryptocurrency.
Dalio, co-chief investment officer and co-chairman of the world’s largest hedge fund, with assets of more than $ 100 billion, also indicated that he was preparing to leave the industry. “I’m done in a year or two,” he said.
The investor predicted that markets would look different in the next few years as the effects of fiscal and monetary stimulus subside. ‘You’ve had a good stimulant and everyone’s high and it’s great. But if it decreases, it will be a slightly different picture, ‘he said.