According to Ray Dalio, founder of the world's largest hedge fund Bridgewater Associates, given that inflation is rising, it is important to get the returns in inflation-adjusted dollars right. This is the moment you can choose cryptocurrency.
When US annual inflation surpassed 6%, Dalio wrote in a post on LinkedIn that price pressures were undermining welfare.
According to him, the government is now printing more money, people are getting more money, and this is causing more purchases, leading to a higher inflation. Some people mistakenly believe they are getting richer because they see their assets rising in value without seeing their purchasing power eroded. Those who have money in cash suffer the most.
Dalio also added that those investing in cash this year would lose around 5%. The only thing he advises investors to do is not to judge anything in their returns or their assets in nominal terms. It should be viewed it in terms of inflation-adjusted dollars.
Dalio said that cryptocurrency forms a large part of his investment strategy.
However, Dalio admitted that there are still serious problems with bitcoin. If bitcoin poses a threat to the government, it will be declared as an illegal movement of funds. He also doubts that central banks or large institutions would have significant amounts in it.
According to a report by PitchBook Data, venture capital funds poured a record $30 billion into crypto investments in 2021. It is more than every other year combined. This is despite the fact that the total capitalization of the cryptocurrency market has surpassed $3 trillion this year, before falling to $2.2 trillion in December. Analyzing the data, US venture capitalists have raised $7.2 billion.
In addition, the latest CNBC Millionaire Survey found that 83% of millennial millionaires already own cryptocurrency. Meanwhile, 48% of them plan to buy as early as 2022.
Also, this year, the auction house reported receiving $100 million from the sale of non-fungible tokens (NFTs).
