Bridgewater Fund's Dalio: Once Bitcoin is close to successful regulation, it will be strangled without hesitation

Ray Dalio, founder of the world's largest hedge fund, Bridgewater Associates, said in an interview with the media on Wednesday that if Bitcoin really succeeds, regulators will eventually control the cryptocurrency.

"If it eventually succeeds, they (regulators) will kill it immediately or try to kill it," Dalio added. "I think ultimately they will kill Bitcoin because they have the ability to do so."

"El Salvador has adopted it, India has banned it, and the U.S. is discussing how to regulate it," he said. "It will eventually be brought under control." As the market's speculative frenzy continues to attract attention, U.S. regulators have stepped up their oversight of the sector.

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said at a Senate hearing on Tuesday that the agency is working overtime to develop rules to better regulate thousands of new digital assets and tokens to protect investors. Gensler wants crypto platforms to register with the SEC because trading in crypto assets falls under the agency's jurisdiction.

Despite its wild swings, Bitcoin has been quite successful in terms of price: the currency has more than quadrupled in the past 12 months and now trades at around $48,000 a coin, having hit a high of more than $60,000 earlier this year.

(Bitcoin weekly chart source: Tradingview)

Dalio said Bitcoin has no intrinsic value, meaning the asset lacks fundamental and objective worth. “Historically, there are a lot of things that have no intrinsic value but have perceived value.”

Perceived value refers to the subjective perception of the value of a product or service by investors. Different from the traditional concept of value, perceived value is the value judgment of investors and is externally cognitive oriented.

Dalio: "This perceived value goes up and down, it could be the Dutch tulip." The Dutch tulip bubble in the 17th century is known as the earliest recorded speculative activity in human history. Tulips once caused an extraordinary frenzy in the flower trading market. Tulip bulbs were in short supply and prices soared. The Dutch tulip market had become a disorderly gambling pool for speculators.

On Tuesday, "female stock god" Cathie Wood boasted that the price of Bitcoin will exceed $500,000. In response, Dalio said, "Even if Bitcoin grows 10 times in five years, it doesn't make sense to me."

However, Dalio said Bitcoin is a good alternative to cash. In his portfolio, he holds a very small amount of digital tokens. "In comparison, cash is trash."

When asked about his future plans, Dalio, 72, said he "expects to step down in a year or two." Bridgewater Fund has been transitioning to the next generation of leaders for some time, and when asked what he plans to do in the future, Dalio said he will "be quiet."