Ray Dalio gives his take on building a better Bitcoin

Bridgewater Associates founder Ray Dalio said, “I don’t think it’s Bitcoin” in terms of effective money.

A well-known investor instead proposed an inflation-linked coin that would sustain its purchases without the wild volatility typical of leading cryptocurrencies.

Dalio is not pro-Bitcoin

Speaking to CNBC, Dalio said what Bitcoin “has achieved” over its relatively short history is “pretty amazing”, adding that, in his view, it is uncorrelated with any other asset.

“I think it’s been amazing 12 years what has been achieved, but I don’t think it has anything to do with anything.”

He also said, “it’s a small thing that gets a disproportionate amount of attention,” backing up this point, citing its market cap as one-third that of Microsoft. In addition, many industries, including biotech, are much more attractive to him from an investment point of view.

Dalio further destroys the idea that he is pro-Bitcoin by questioning its effectiveness as money, a store of value and a medium of exchange. However, he acknowledged that the money system was broken.

“It’s not going to be effective money; it would not be an effective store of wealth, it would not be an effective medium of exchange. But we are in a world where money as we know it is in danger. We scored too much.”

Hinting at the collapse of currencies, which he describes as “evolutionary unfolding things”, Dalio foresaw people scrambling to a type of security.

Fixed the money system

When pressed if the “safety” was Bitcoin, Dalio insisted that neither Bitcoin nor a fiat-backed stablecoin would fit the bill.

“I think if you want digital currency you have to do something different. I don’t think stablecoins are good because you’re going to get fiat currency again.

Instead, inflation-linked coins would be a viable alternative. Through inflation linked coins, people can secure their purchasing power. Whereas saving in Bitcoins is subject to wild swings in volatility, says Dalio.

“If you make a coin that says, okay, this is purchasing power that I know I can keep and keep my money for a period of time, and I can trade anywhere, I think that would be a great coin.”

The Frax Price Index (FPI) is an example of an existing coin that gets its price by breaking down real-world consumer prices.