Barely six months after openly criticising bitcoin, billionaire hedge fund boss Ray Dalio has thrown his weight behind Bitcoin while expressing doubts about the future of the US dollar.

In a recent publication by Coindesk, Dalio was quoted to have said

“The U.S. dollar is on the verge of devaluation on a level last seen in 1971 and that China is threatening the greenback’s role as the world’s reserve currency. In such an environment, bitcoin, with its gold-like properties, looks increasingly attractive as a savings vehicle.”

While this may be one of the constant concerns about the US dollar emanating from higher quarters like Dalio of Bridgewater Associates has just done, he brings clarity by not just saying he’d “rather have bitcoin than a bond”, Ray openly admitted, saying

“I have some bitcoin.”

Ray Dalio’s new position represents a drastic U-turn from his earlier stance on cryptocurrencies and digital assets, especially bitcoin. Back in November 2020, Dalio who expressed pessimism about cryptocurrencies such as bitcoins and foresaw an inevitable crackdown by the government on digital assets in November, said

“I don’t think digital currencies will succeed in the way people hope they would,”

However, by December, just when the bull run was gathering steam and had the likes of Raoul Pal of Real Vision developing a crystal-clear prospect of the future of the digital asset ecosystem, Dalio began softening his previous hardline stance. In an AMA session on reddit, Dalio expressed that cryptocurrencies that are becoming a mainstay after existence depict “gold-like asset alternatives.”

Dalio's latest romance with bitcoin stems from the bleak future of the US dollar. Like a deja vu, Dalio warned against the same fate that led to the US dollar breaking off from the gold standard in the ’70s after more than a decade of excessive borrowing and over-bloated defence budgets to help shore up the economy during WWII and the painful Vietnam war. He said:

“The current situation now resembles 1971.”

Crypto market shows early signs of recovery

The market has taken a swift reversal from the death blow it took yesterday after bitcoin plunged by over 15% and Ethereum by over 20%. As of the time of reporting, the cryptocurrency market capitalization stood at $1.61 trillion. The market has seen an influx of over $150 billion within the last five hours. It is not clear if Dalio’s latest support for bitcoin is propping it up, but most alts are posting double digits, as Binance shows. Bitcoin is trading slightly above $38,000 with Ethereum above $2,500 after the latter dropped below $2,000 yesterday.

Although one thing remains obvious, Bridgewater Associates started 2021 with $101.9 billion in assets under management by far, making it the largest hedge fund AUM within its league. Perhaps with the clarity expressed by Ray Dalio, the co-chief investment officer of Bridgewater hedge fund, other hedge funds which might have been sitting on the fence regarding bitcoin may change their stance now and FOMO in.

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