Ray Dalio: China’s CBDC Could Appeal to American Investors

“We haven’t been in a competitive environment because the dollar has been the world’s reserve currency,” said Dalio, the founder and co-chief investment officer of Bridgewater Associates, the world’s largest hedge fund, which manages about $150 billion.

article-image

Bridgewater Associate’s Ray Dalio; Source: Wikipedia

share

key takeaways

  • China’s central bank digital currency become increasingly competitive on the world stage
  • Right now, the US is producing a lot more debt and creating a supply and demand imbalance thanks to the fiscal stimulus

China is taking the lead in creating a central bank digital currency (CBDC) that’s going to become increasingly competitive on the world stage and could appeal to international as well as American investors, Ray Dalio said at a virtual bitcoin conference Friday hosted by Texas A&M University.

“We haven’t been in a competitive environment because the dollar has been the world’s reserve currency,” said Dalio, the founder and co-chief investment officer of Bridgewater Associates, the world’s largest hedge fund, which manages about $150 billion. 

“I’m not saying that this shift is going to happen quickly. But given the already overweighted nature of portfolios around the world,” and the death of the 60/40 portfolio, “the central bank will be put into a very difficult position of either having interest rates rise a lot or having to monetize, as it’s been happened before.”

Specifically, the Fed would have to buy the debt the Treasury sells, a principle of Modern Monetary Theory.

Dalio began making positive comments on bitcoin in December, and called it “one hell of an invention” earlier this year. He’s also said he’s considering digital assets as investments for new funds that would offer clients protection against the debasement of fiat money.

Right now, the US government is producing a lot more debt and creating a supply and demand imbalance thanks to the fiscal stimulus, he said.

If the demand for US debt isn’t there, the central bank “mechanistically is in a position where they will either see interest rates rise, and having the rationing of that debt—which is negative for the economy and nature of the financial assets—or they will print money and buy that debt. I think they’re going to print money and buy the debt.”

The supply and demand problem won’t just be in dollars or in bitcoin. The biggest point he made in his session was classic investing 101 advice: diversify and balance. 

“I would worry for investors who are either anti-bitcoin or pro-bitcoin,” he said, adding that we’re in a “a very major classic fiat monetary crisis of sorts,” and that investors should hold a “properly balanced” diversified portfolio of assets that can protect them against it. 

“Individuals should not be so focused on the magical thing,” he said. “[If] you put too much into it, I don’t think you could look at past returns and consider them indicative or even the volatility indicative.”

For more of Ray Dalio’s thoughts on bitcoin you can read his 17-page client note on it here.

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

The convergence of DePIN and energy generation aims to address modern grid challenges by incentivizing distributed generation.

article-image

An improving outlook on tariffs is positive for cryptocurrencies, but a sustained rally is going to take movement on the regulatory front

article-image

Apollo’s Christine Moy explained how the “velocity” of innovation in crypto has led to the evolution of RWAs

article-image

Warren Buffett attributes his astounding investment returns to only about a dozen “truly good decisions” he’s made

article-image

This report has been corrected.

article-image

Stablecoin revenue a bright spot for the crypto exchange in Q1, as trading revenue dropped 19% quarter over quarter

article-image

Creators are being told to “shill” their tokens and cash in on their “cults”