Better late than never

Ray Dalio may be planning a major crypto investment with his Bridgewater hedge fund. Dalio has had bitcoins in his private portfolio for several months. Because things are going so well privately, he is now probably planning an investment in a crypto fund with his hedge fund Bridgewater. According to him, Bitcoin is a “damn good invention” and, after his private successes, he has now apparently found the courage to venture into the crypto sector as an institutional investor.

Dalio is considered one of the most influential and wealthiest hedge fund managers in the world – no wonder with fund assets of 150 billion US dollars, including money from numerous pension and insurance funds. According to reports from CoinDesk, the Connecticut-based investment firm plans to back an external vehicle with exposure to cryptocurrencies. This decision has great charisma because Ray Dalio has been around long enough not to make rash decisions: He founded Bridgewater Associates back in 1975, making him a major mutual fund pioneer. The signal of an investment by the world’s largest hedge fund in cryptocurrencies would be significant for Bitcoin, Ether and Co. as a serious form of investment.

“A damn good invention”

Dalio is not the first hedge fund CEO to go from Saul to Paul: Already Kenneth Griffin of Citadel has abandoned his initially critical stance towards cryptos and now invests in this sector. In January 2021, Dalio called Bitcoin a “damn good invention” in an internal memo, and in May of the same year he announced his personal investment in Bitcoin. At Christmas, he lent his crypto-optimism in an interview with MarketWatch: “I believe in blockchain technology; there really is going to be this revolution, so blockchain deserves confidence.”

Dalio says he has little knowledge of cryptocurrencies – yet he believes it’s worth holding a small portion of your portfolio in Bitcoins because “Bitcoin is like gold, even though gold has already established itself as a premium alternative to fiat money.” Dalio is enough of a realist, however, to be critical of government influence: “If they [cryptocurrencies] pose a threat to governments, they will certainly be banned in some places […],” Dalio said in the MarketWatch interview. But that doesn’t change his fundamentally positive view of cryptocurrencies, which he says could even act as “a gold alternative for the younger generation”.

They are all coming

Some hedge funds are already active in the crypto sector: British investment firm Brevan Howard launched its own crypto hedge fund in January 2022. Already in 2021, Point 72 AssetManagement led the US$ 21 million financing round for the crypto company Messari. With Bridgewater, another heavyweight in the investment landscape is now likely to enter the ring and herald a new era of institutional investment in the crypto sector.

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