The Case for Ray Dalio as Satoshi Nakamoto
[Opinion] For those living under a rock, I’ll start with a brief explanation of what Bitcoin is — Bitcoin is a decentralized store of monetary wealth and energy. It is finite and cannot be manipulated per its structural DNA; think of Bitcoin as the digital form of gold (but better). The question of “who invented Bitcoin” has eluded loyalists since the inception of the popular cryptocurrency. All we know is that the presumed pseudonymous person or persons who developed bitcoin goes by Satoshi Nakamoto. Theories about Satoshi’s identity range from aliens, to Elon Musk, but it’s anyone’s guess ….. my bitcoin is on Ray Dalio.
All speculators must start with the basics:
Why does Bitcoin Exist: We can only speculate as to the creator’s motives. Perhaps he/she/they recognized the inherent flaws of traditional fiat fiscal policy which is regulated by a central governing entity. It has become clear over the last decade that the MMT / QE approach adopted by central banks across the globe has resulted in rampant inflation and a widening income gap between the haves and have nots. During a time when the purchasing power of the US dollar is declining at an alarming rate, Bitcoin has emerged from a fringe investment to an institutionally adopted store of wealth and a meaningful hedge against inflation.
But Why Ray?: Both a financial mastermind and a renowned scholar of socio-political and economic history, Ray Dalio has a deep understanding of the broken financial system which created the rampant income inequality that we face today.
In his ‘Paradigm Shift’ article on Linkedin Dalio writes “It is also a good time to ask what will be the next-best currency or storehold of wealth to have when most reserve currency central bankers want to devalue their currencies in a fiat currency system.”
Even prior to the pandemic Dalio has been quoted as saying that the widening income gap is a national emergency. More recently on a CNN interview with Poppy Harlow he states that “a large wealth gap with large values gaps at the same time of lots of debt produces conflict and vulnerability.” He goes on to say “If one reads history, one recognizes that some of the thigns we’ve gotten used to in our lifetime like peace, harmony and productivity — you can’t take for granted. I think that there is a polarity and debt situation in which there probably will have to be revolutionary type changes”
Who does Bitcoin benefit: Bitcoin benefits all who suffer from the risks and inefficiencies of a government regulated fiat currency. As a store of wealth, Bitcoin stands to benefit those with the most wealth. As a decentralized and transparent monetary network, Bitcoin provides benefit to those who have historically been disenfranchised by an economic system that favors a wealthy minority.
But Why Ray: Bitcoin as a store of wealth stands to benefit Ray Dalio to the tune of $18.7B, his predicted net worth as of February 2020.
Dalio is quoted as saying that if there isn’t a smart bipartisan resolution to amend the broken system such that it is productive for the majority of people, the resolution will come through greater conflict. As I mentioned in a previous post, Bitcoin serves as a means to course correct our failed monetary policy in a last ditch effort to avoid “plan B” which Dalio defines as “greater conflict.”
Additional Random Indicators:
- Fidelity Digital assets has established what is arguably the most advanced and robust digital asset custody program in the world. Ironically, their recent digital assets report cites Ray Dalio’s article on Paradigm Shift’s as a primary reference.
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Ray Dalio has not become one of the wealthiest individual in the world by missing the mark on an emerging trend. Dalio has entire teams of Analysts, Data Scientists and Mathematicians at Bridgewater charged with spotting trends before they emerge. Call me crazy to think that the guy in charge of the largest hedge fund in the world rarely “misses” something. And if Dalio genuinely thinks he missed something, he has infinite resources at his disposal to help him uncover it without the need to consult with the ugly depths of the twitter comments section. Not to mention that Dalio’s mere mention of Bitcoin serves to generate more credibility for the crypto asset — this fact is not lost on Dalio.
Further dissecting the arguments Dalio makes against Bitcoin, it’s almost as if he timed his tweet perfectly to be proven wrong on every point just 1–2 months later. From PayPal’s BTC integration to BTC adoption by institutional investors — Dalio couldn’t have tried any harder to be entirely wrong on every point. However, we can assume that the head of the top performing Hedge Fund in the world is rarely wrong. Dalio didn’t accumulate $18B of wealth by being in the dark. My opinion is that Dalio’s tweet was a signal to investors and enthusiasts that the age of Bitcoin is finally upon us
Last but not least I’ll leave you with a snippet of the comments section from the Paradigm Shift article that I linked earlier in this post. The exchange in the comment below is significant for a few reasons: 1. The question being asked references bitcoin 2. The questions comes from the individual who is in charge of the money at Saudi Aramco. For those unfamiliar, Saudi Aramco is the Saudi state-owned oil company — it is the 5th largest company in the world and had a market cap of $2T at the time the question was asked below. 3. The polarity of Dalio’s response is pretty telling in my opinion . It screams of a proud creator who wants to keep his creation a secret but can’t resist the temptation to throw in a little brag at the end. He starts off with the ‘deny at all costs’ approach by basically saying “I don’t want to waste a single precious breath on a topic so unworthy as crypto currency.” Then two sentences later Dalio can’t resist but to end the statement with a humble brag by stating that crypto could be preferable to gold…… and “that’s all he’s going to say” :-)
I suspect that Ray Dalio is either the creator of Bitcoin or the single largest stash holder in the world. Contrary to popular opinion, he hasn’t been underperforming in traditional markets due to bad investment decisions, but rather because there isn’t a human on earth (other than maybe the Treasury at Saudi Aramco) who better understands that traditional markets have completely gone to shit.
As a final note, and in the rare chance that this post ever finds its way back to Ray Dalio, I’d like to extend my sincere condolences to Ray and his entire family on the tragic passing of Devon Dalio last month.