Cryptocurrencies had a very dramatic year in 2022. After a period of explosive growth for many coins, higher interest rates combined with a few spectacular collapses made the industry lose $2 trillion in value.
Parts of the crypto industry have begun to bounce back recently. Bitcoin, for example, has surged 40% in value since the start of 2023. Last weekend, it crossed the $23,000 threshold and continues to remain robust. Mark Cuban of Shark Tank fame defended Bitcoin last month as an instrument of stored value despite soured sentiment. And longtime crypto evangelist Cathie Wood has even gone so far as to say that she thinks Bitcoin will surpass $1.5 million by the end of the decade.
But not everyone is sold on Bitcoin. Founder of Bridgewater Associates and legendary investor Ray Dalio sees Bitcoin as “a tiny thing” that is unstable and often receives “disproportionate attention.” The investor compared the value of Bitcoin to Microsoft—the cryptocurrency is less than a third of what the tech giant is valued at—and added that the coin has “no relation to anything.”
But he acknowledges that in a changing world, consumers want to find ways to store their wealth and secure their buying power.
“We are in a world where money as we know it is in jeopardy,” Dalio said in an interview Thursday with CNBC’s Squawk Box. “We are printing too much, and it’s not just the United States.”
“People are going to say, ‘Where is my safe store of wealth?’” he noted. “I think the question over the next number of years is really ‘What is money?’ Not just a medium of exchange but a storehold of wealth.”
Although Dalio doesn’t think of Bitcoin as a stable store of value, and he shot down the idea of stablecoins, he didn’t write off digital currencies altogether, and discussed a possible future that could include inflation-linked digital coins.
“I think you’re going to see probably the development of coins that you haven’t seen that probably will end up being attractive, viable coins. I don’t think Bitcoin is it,” he said.
Dalio isn’t the only major investor deeply skeptical of Bitcoin. JPMorgan CEO Jamie Dimon called Bitcoin a “hyped-up fraud” in January while defending the broader technology that powers it as useful. Former options trader and author of The Black Swan, Nassim Nicholas Taleb, has referred to Bitcoin as a “tumor” in the economy that has grown in an uncontrolled manner.
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