Legendary investor Ray Dalio warned investors the era of easy money is over, adding that cryptocurrencies’ craze is overblown, urging investors to hold cash instead, in an episode of Bloomberg’s “The David Rubenstein Show.”
Dalio is a billionaire, founder, and co-chief investor of Bridgewater Associates — the largest hedge fund in the world with $150 billion in assets under management. The billionaire said that the recent stock market price swings followed the Federal Reserve’s plan to raise interest rates in efforts to curb high inflation.
Interest rates hikes mean that borrowing money will become costly, and will reduce the value of future cash flows, said Dalio. Asset prices declined sharply as investors witness a new era of tighter monetary and fiscal policies, he added.
“The easy days where they dump money on you, and you don’t have much inflation, and you don’t have much tightness — those have passed,” he said.
Dalio explained that cryptocurrencies make up a “tiny percentage” of his holdings. Nonetheless, the billionaire cautioned that cryptos are trackable, vulnerable and could be banned by several governments in the future.