Bitcoin Criticized By Titan Hedge Fund
Ray Dalio- the CEO and founder of Bridgewater, consisting of 350 institutional clients, making them the world's biggest hedge fund, is well equipped with the knowledge of traditional investment businesses.
Even though he had done his share of work in steering his company around traditional assets a few years ago, the question of him knowing about crypto asset bubbles arises.
Along with his friend, a billionaire finance tycoon Jamie Dimon, Dalio called Bitcoin a 'bubble'. He said, unlike gold, it is not an effective storehold of wealth because of its volatility. He termed Bitcoin as a bubble because it is a highly speculative market.
Some of the reasons why Mr.Dalio does not believe in cryptos and Bitcoins potentials are at large. There are two vital facets according to the Bridgewater criteria to consider it as a valid currency. Firstly, serving as a medium of exchange is of high importance and secondly, it should be a store of wealth.
Dalio said it was a shame that it could not be used as a currency. But because of the speculations and fewer transactions, it’s being hurt badly.
The main reason why he is terming Bitcoin a bubble is because he thinks the results and actions of cryptocurrencies have been driving people in thinking that without an understanding of all the fundamentals behind it, they can easily be sold at a higher price. Hence, it is a bubble.
Terming Bitcoin and cryptocurrency as a fraudulent activity is common today. Bitcoin was considered a fraudulent activity not only by the CEO of Finance, Dalio but also by Jamie Dimon, the CEO of JP Morgan.
The forecasts about bitcoins in particular and cryptocurrencies by the two big-shot CEOs may be right or time might prove them wrong. We can never really be sure if they are right about their opinion on this subject. Dimon's comment really did startle the market. Because of China's negative news and Dimon's comments, the markets dropped rapidly.