Dalio warns regulators will ‘kill’ bitcoin if it becomes too efficient

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Ray Dalio said regulators would shut down bitcoin if the cryptocurrency got too efficient and dismissed predictions from Cathie Wood of Ark Invest that its price would increase tenfold in five years.

Speaking at the Salt conference on Wednesday, the founder of Bridgewater Associates said bitcoin would be a viable investment alternative as long as it was accepted for payments, but added, “I think in the end of account, if it’s really successful. . .[regulators]will try to kill him.

He also took issue with Wood, who told the Salt conference – an annual gathering of hedge fund managers in New York City – on Monday that she expected bitcoin to be worth $ 500,000 in five years, a forecast that, according to Dalio, “doesn’t make sense”.

Wood’s investment firm has unveiled plans for a bitcoin exchange-traded fund, although it has yet to receive regulatory approval.

Dalio’s comments come after Gary Gensler, chairman of the United States Securities and Exchange Commission, called on Congress for more regulatory powers to deal with the “Wild West” of cryptocurrencies.

The SEC last week warned Coinbase, the first major U.S. cryptocurrency exchange to be publicly listed, that it would sue the company if it launched a new digital asset lending product called Lend.

The news has sparked a debate on whether these products, which allow users to earn interest on certain digital assets, should be considered securities and therefore fall under the purview of the regulator.

Dalio said he bought cryptocurrencies himself, but his holdings were still small compared to his investments in gold. He added that “governments don’t want alternative currencies” but investors should diversify their holdings.

The price of bitcoin has jumped nearly 50% this year with leading investors such as Paul Tudor Jones and Stanley Druckenmiller putting their weight behind the cryptocurrency.

Dalio, who is co-chief investment officer and co-chairman of the world’s largest hedge fund with more than $ 100 billion in assets, also said he was preparing to leave the industry. “I’m done in a year or two,” he says.

The investor predicted that markets would be different over the next several years as the effects of fiscal and monetary stimulus wear off. “You had a good stimulus and everyone is high and it’s great. But when it wears off, it will be a little different picture, ”he said.