Legendary billionaire proposes radical dollar-beating ‘inflation-linked’ crypto rival to Bitcoin and Ethereum after extreme price swings
BitcoinBTC and ethereum, the two largest cryptocurrencies by market cap, have rallied in the past month, each adding around 40% to their price (triggering a wave of bullish price predictions).
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Bitcoin price has climbed back above $23,000 per bitcoin for the first time since August, up from below $17,000 just last month. EthereumETH, meanwhile, has topped $1,600 per ether as traders eye a looming upgrade.
Now, legendary billionaire Ray Dalio, the founder of the world’s largest hedge fund Bridgewater Associates, has warned that the world is heading for a currency crisis due to inflation – and proposed an “inflation-linked” bitcoin and ethereum alternative that could preserve purchasing power.
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“We are in a world where money as we know it is at risk,” Dalio told CNBC in an interview. “We’re printing too much, and it’s not just the US, it’s all the reserve currencies.”
Bitcoin is “a small thing that gets disproportionate attention,” Dalio said. “It’s not going to be efficient money. It’s not an efficient storekeeper of wealth. It’s not an efficient medium of exchange.”
Dalio, who has warned against holding dollars in recent years with the line “cash is trash”, also dismissed traditional currency-pegged so-called stablecoins and called for the creation of an “inflation-linked” version of bitcoin.
Inflation has shot to a 40-year high in the United States over the past year, forcing the Federal Reserve to embark on a series of rate hikes.
“If you created a coin that said, ‘OK, this is purchasing power that I know I can save and deposit my money over a period of time and trade in,’ then I think that would be a good coin,” Dalio said. So I think you’re going to see the development of coins that you haven’t seen that are likely to end up as attractive, viable coins. I don’t think bitcoin is.”
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Bitcoin price has roared back so far in 2023 after suffering a devastating crash throughout 2022.
“Bitcoin is heading for its best January since 2013 based on hopes that inflation has peaked, monetary policy is becoming more accommodative, and the various crises in the crypto sector, including high-profile bankruptcies, are now in the rearview mirror,” Nigel Green, CEO of financial advisor deVere Group, said in emailed messages.
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