The World’s Largest Hedge Fund is Getting into Crypto
Ray Dalio’s Bridgewater Associates is taking crypto seriously.
Bridgewater Associates doesn’t intend to directly invest in crypto itself yet but does so by backing an “external vehicle” instead. Its investment is “minuscule” compared to its total $150 billion in assets under management.
Aside from founder Ray Dalio’s announcement last May of a personal investment in bitcoin, this is the clearest signal to date that Bridgewater, founded in 1975 by Harvard Business School graduate Dalio from his Manhattan apartment, considers crypto a bona fide asset class.
From an email dated Feb. 22, a Bridgewater representative reported that “we won’t comment on our positions, we can say Bridgewater continues to actively research crypto but is not currently planning on investing in crypto.”
“Bridgewater is in a first-half plan this year,” said another Bridgewater spokesperson. “They’re planning on having a small slug of their fund deployed directly into digital assets.”
Another person familiar with the hedge fund’s crypto trading plans said: “Bridgewater is looking to get involved. They are doing serious diligence: liquidity, service providers and whatnot.”
The institutional space is moving quickly, with several hedge funds are getting into digital assets, and it’s a big deal that a hedge fund of this size is taking the digital asset class seriously. It joins other mainstream hedge funds, such as Brevan Howard Asset Management and Tudor Investment Corp., in addition to crypto hedge funds, which have rolled billions of dollars into the space.
Last year, London-based investment firm Marshall Wace was looking to raise a new fund to invest in blockchain technology, digital currency payment systems, and stablecoins.
In December, Dalio reiterated his concerns over regulation. “If it is a threat to governments, it will probably be outlawed in some places when it becomes relatively attractive.”
He also mentioned the use of cryptocurrencies with malware and ransomware. “You’re seeing much more malware. You’re seeing much more ransomware. In other words, breaking in and then looking for a payment, quite often that’s in Bitcoin. The digital component is a risk for our society and could be a risk for operating that way.”
Despite his skepticism, Dalio seems to have changed his mind since then, noting that Bitcoin has earned his respect. An extraordinary figure in the world of investing, he has been public about personally holding bitcoin, referring to it as “one hell of an invention. It has not been hacked. It has not been made obsolete. It has proven itself to be an asset which has imputed value. It's probably the next generation's version of gold."
“I believe in the blockchain technology…It has earned credibility.”