Ray Dalio, Founder of Bridgewater Associates, joins ‘Influencers with Andy Serwer’ to share his thoughts on Bitcoin and cryptocurrencies.
ANDY SERWER: Bitcoin. I mean, so it’s a two-part question. Is that in a bubble? Maybe a three-part question. Is it dangerous? And what do you think is the likelihood that the government will ban this? And is that even feasible?
RAY DALIO: Bitcoin has proven itself over the past 10 years. It proved it wasn’t hacked. It is by and large therefore worked on an operational basis. It has built a significant following. It is, in a sense, an alternative to storing wealth. It’s like digital money. And those are the pluses. Bubbles are financial assets that have an imputed value. It is an asset that has no intrinsic value. It’s imputed worth. It is whatever we think.
And if you look at some of the bubbles in the past, a great book is “Extraordinary Popular Delusions and the Madness of the Masses” by Mackay, 1845 or so. But he’s talking about the South Seas Bubble and he’s talking about the Mississippi Bubble and so on. It’s when people love it. It’s the dot-com bubble and so on. And that – that, you know – could be. So if you look at Bitcoin, this is a possibility. You know it’s an alternative because there aren’t many such assets. There aren’t that many assets that could have intrinsic value that can’t be messed up.
As far as the government allowed, there have always been banks in the past. And then they decided with the Bank of England that it was in their best interest to have a banking monopoly in a country. So we estimate that every country values its monopoly on controlling supply and demand. You don’t want other funds to operate or compete because things can get out of hand.
So I think there is a very good chance that you have it under certain circumstances that banned the way gold was banned. And you watch this question come up in India today. India is taking the step today to forbid it, forbid ownership. OK, so we have to see what that means.
Can you do it now Now we come to the details. My understanding of people who are under government surveillance and so on is, yes, it’s a– they can understand, they can track it. You can know who is dealing with this. I dont know. I am not an expert on this. But there is a whole way. Is it private wallets? Isn’t it private purses? How do you do this, this and the other? I would guess it would be very hard to hold your own against this type of action. This is how it looks to me.