Bridgewater founder: It’s time to consider replacing the dollar with cryptocurrencies

Here is the English translation: Billionaire investor Ray Dalio, the founder of the world's largest hedge fund Bridgewater Associates, has recently warned that the ballooning US debt could eventually lead to the devaluation of the US dollar as a store of value. Therefore, he pointed out that it is time to consider more widely accepting alternative currencies such as cryptocurrencies. Dalio said in an interview during the World Economic Forum in Davos: "The situation we're in now is we have too much debt, and we're producing debt rapidly. So, yes, we have to consider alternative currencies." "By the way, it's not just individuals who are thinking about this. Many countries and central banks are also considering this. The changes in holding bonds and debt as an asset, and buying gold and other assets in portfolios, is a reality," he added. In the past year, the price of Bitcoin has risen 165%, and even surpassed $100,000 per coin after Trump's victory in the US election last November. It is widely expected that the new administration will be more crypto-friendly. Trump and his wife Melania have even released their own NFT collectibles. Furthermore, Trump signed an executive order on Thursday to establish a cryptocurrency working group to propose new digital asset regulations and explore the possibility of establishing a national cryptocurrency reserve, fulfilling his promise to quickly reform US crypto policy. It is reported that the working group will be led by David Sacks, Trump's appointed AI and cryptocurrency commissioner. The group members also include the US Treasury Secretary, Attorney General, Commerce Secretary, SEC Chair, CFTC Chair, and other government and regulatory officials. Dalio is not the only one who believes the era of US dollar dominance is coming to an end. In its latest report, Morgan Stanley pointed out that while the US dollar's dominance has swept the entire market, traders seeking to sell this global reserve currency are far more numerous than people imagine. The bank recommended shorting the US dollar against the euro, yen, and pound, as the dollar is expected to weaken. "While there are many who are bullish on the dollar and may be the most vocal in expressing their views, it seems there are more 'silent' investors who intend to sell the dollar. Many have funds ready and are just waiting for a short signal," the bank's analysts wrote. However, Morgan Stanley's reasons differ from Dalio's: the inflation data before March may increase the likelihood of the Fed cutting interest rates, and the protracted fiscal negotiations in Congress may disappoint dollar bulls. The report said strategists expect a more moderate trade policy outcome, which could also put pressure on the dollar. Dalio, on the other hand, is more focused on warning about the increasingly inflated US debt problem. He pointed out that the worst-case scenario for US debt (such as a major inflationary outbreak) has not yet occurred. And the Trump administration's extension of its signature tax cuts may increase the debt level. Furthermore, Dalio also believes that the current 10-year US Treasury yield hovering around 5% is just the beginning of an upward trend, which could put pressure on the US stock market and support more capital flowing into areas like cryptocurrencies. "Perhaps the biggest threat, certainly one of the biggest threats, is the bond supply and demand related to US debt," he added.