Cryptocurrencies? They are getting too much attention
Ray Dalio, a US investor who made his fortunes by managing hedge funds, believes that the cryptocurrency industry is attracting too much attention and this is not good. Dalio explained however that cryptography is only a “small” part of his wallet. Cryptography on the other hand represents only a small fraction of even the global financial markets, however the International Monetary Fund (IMF) recently warned that it poses contagion risks due to its growing correlation with US equities.
The high-tech Nasdaq index and cryptocurrencies have been trading in tandem in recent times, with the increasingly aggressive Federal Reserve macro narrative taking over. The head of Bridgewater Associates also said other businesses will have to adjust due to rising interest rates.
Dalio, who was initially skeptical of cryptocurrencies, revealed his bitcoin purchase last May. He, however, hasn’t turned into a fan of cryptocurrencies, regularly predicting that governments could end up “killing” bitcoin if it gets too successful. During his recent podcast appearance, Dalio said it would be reasonable to allocate up to 2% of one’s wallet in bitcoin.
The hedge fund manager said the price of the largest cryptocurrency is unlikely to hit the $ 1 million target as he doesn’t believe bitcoin will be able to supplant gold. Dalio sees gold as the preferred store of value because it has existed for thousands of years.
by Alessandro Crea
Thursday 27 January 2022 13:00