Ray Dalio says crypto could be a victim of its own success by inviting regulation – and his comments follow tough words from watchdogs

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Ray Dalio is one of the most successful hedge fund bosses of all time.

  • Ray Dalio said cryptocurrencies could become a victim of their own success by inviting regulation.
  • The billionaire hedge fund boss’s comments follow tough words from regulators in the UK and US.
  • Dalio has said governments could get tough on crypto if it threatens their control over money.
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Billionaire hedge fund boss Ray Dalio has said the biggest risk to cryptocurrencies is their own success, which could cause governments to crack down on them to ensure they control the money supply.

Talking about cryptocurrencies, Dalio told the Wall Street Journal “Future of Everything Festival” on Tuesday: “Its own biggest risk is its success, because as a storehold of wealth no government wants to have an alternative currency.”

The comments from Dalio, the founder and co-chief investment officer of investment titan Bridgewater Associates, came soon after regulators and watchdogs in both the UK and US hinted at official skepticism of crypto assets.

Bank of England governor Andrew Bailey said last week people should only invest in crypto “if you’re prepared to lose all your money.”

And Gary Gensler, the new head of the US Securities and Exchange Commission, said in a Congressional hearing the crypto world “could benefit from greater investor protection.”

Dalio said the future of cryptocurrencies is “exciting and unknown.” He added: “Crypto as a digital clearing mechanism and so on, very exciting, very bullish. Crypto as a storehold of wealth, very interesting. Probably will be important for us.”

But he said he remained concerned that governments could get tough on crypto if they feel their monetary sovereignty is threatened, something that he has talked about in the past.

Regulators around the world are increasingly focused on cryptocurrencies after bitcoin’s meteoric rise, with Turkey banning the use of crypto assets for payments and India flirting with an outright ban.

US regulators have not so far announced any plans to tighten crypto regulations, although some analysts have said that Gensler’s stance makes the approval of a bitcoin exchange-traded fund unlikely any time soon.

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Bitcoin’s path to $100,000 is less important than its potential impact on the corporate world over the next decade, Wedbush says

  • Dan Ives of Wedbush said bitcoin’s effect on the corporate world is more important than its price.
  • The analyst argued moves into blockchain tech and cryptocurrencies may surge over the coming years.
  • “Bitcoin mania is not a fad…but rather the start of a new age on the digital currency front.”
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Bitcoin’s path to $100,000 per coin is less important than its potential impact on the corporate world over the next decade, according to Wedbush.

In a note to clients on Thursday, Wedbush’s Dan Ives said that the story around bitcoin is much larger than its “potential path/timeline to $100,000.”

The analyst argued the important theme when it comes to cryptocurrencies is “the potential ramifications that crypto, blockchain, and Bitcoin could have across the technology and corporate world for the next decade.”

Ives said moves into blockchain technology and cryptocurrencies could surge over the coming years after companies like Tesla, IBM, Visa, Square, Mastercard, and more entered the fray recently.

There’s a “growing shift for companies to accept this digital currency as a form of payment,” according to the analyst.

Ives added that he still believes “less than 5% of public companies” will invest in bitcoin over the next 12-18 months but said that number could move “markedly higher” as more regulation and acceptance of the currency takes hold.

“Bitcoin mania is not a fad in our opinion, but rather the start of a new age on the digital currency front,” Ives wrote.

Although Ives was one of the first to the party, his comments about cryptocurrencies and their regulation are becoming more in sync with other Street commentators and even CEOs as cryptocurrencies and blockchain technologies continue to develop.

David Solomon, the CEO of Goldman Sachs, said his bank is looking into ways to support clients’ desire to own cryptocurrencies and other digital assets in a CNBC “Squawk Box” interview on Tuesday.

The CEO added that he believes there will be a “big evolution” in the way the US government regulates digital assets in the coming years.

Ives and his team also highlighted the potential of using blockchain technology for decentralized storage in their note to clients on Thursday.

The analyst said blockchain technology can help increase the overall speed and lower the price of digital storage moving forward. He noted, “there are a number of business models attacking this new market opportunity with privately-held Filecoin one of the more impressive strategies we have seen in the market.”

As far as Wedbush is concerned, Bitcoin isn’t going away anytime soon, rather it’s set to become “mainstream” and the effects on Wall Street and the corporate world will be huge.

Coinbase’s 840% revenue jump in the first quarter may be the perfect example of what Ives is talking about.

Coinbase posted $1.8 billion in revenue in its first-quarter report. That means the crypto exchange pulled in over $120 million more than Intercontinental Exchange, the company that owns the New York Stock Exchange, did in its most recent earnings report.

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SEC crypto commissioner admits the agency’s refusal to approve a bitcoin ETF has dug them into a ‘little bit of a hole’

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Bitcoin climbed on Thursday morning

  • The SEC cryptocurrency commissioner said the agency’s refusal to approve a bitcoin ETF is creating a bit of a challenge for the regulator.
  • The US thus far has not approved any cryptocurrency ETF that has sought the green light from the SEC.
  • The commissioner also encouraged more partnerships between the private and public sectors.
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Securities and Exchange Commission cryptocurrency commissioner Hester Pierce said the agency’s refusal to approve a bitcoin exchange-traded fund is causing a bit of a challenge amid a boom in cryptocurrency.

“We’ve dug ourselves into a little bit of a hole,” Pierce said in an interview with Blockchain Policy Matters, an online show by the Blockchain Association, on Thursday. “A lot of people are looking for a way to access the asset class.”

The US thus far has not approved of any cryptocurrency ETF. Around 10 firms have attempted to file and have been rejected, including VanEck, and WisdomTree. Canada, meanwhile, saw its first bitcoin ETF, the Purpose Bitcoin ETF, launch last month, along with two others in the country.

Pierce has been trying to put cryptocurrencies and blockchain into the spotlight since her appointment as commissioner in 2018. Among her first steps is to get regulators to look at the assets in a different light.

“What I would urge my fellow regulators and people at the Fed to think is to think not only to have the reaction of looking at where the negatives are but to really look for the positives,” she said.

Pierce also encouraged more partnerships between the private and public sectors. Engaging more with the private sector, she said, “can help us, regulators, sharpen our thinking.”

“A lot of the real innovation happens in the private sector. Don’t try to squelch that out. And don’t view this as a competition between the private and the public sector,” she said. “There tends to be a conservatism which I think is reflected in a lot of comments from regulators.”

The commissioner also said she looks forward to working with SEC chairman nominee Gary Gensler who was once a digital currency professor at MIT as the agency’s next chief. She said she is “hopeful” Gensler will help SEC think about these assets “in a more sophisticated way.”

She also explained how distributed ledger technology such as blockchain could potentially eliminate some overlooked gaps in the financial system if centralized.

The Fed has recently started discussing the possibility of having a central bank digital currency.

In February, Peirce challenged the emerging government narrative that cryptocurrencies are dangerous or as aid terrorist financing and money laundering. US Treasury Secretary in February has expressed concerns that bitcoin and other cryptocurrencies are used for “illicit finance.”

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Entrepreneur Gary Vaynerchuk praised NFTs, discussed bitcoin regulation, and Coinbase’s upcoming public listing in a recent interview. Here are the 11 best quotes.

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  • Gary Vaynerchuk discussed how non-fungible tokens are disrupting the digitalization of goods in a recent interview.
  • He said it remains to be seen how potential cryptocurrency regulation affects bitcoin’s long-term success.
  • He also spoke about how social norms could change in comparison to the last 20 years.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Angel investor Gary Vaynerchuk spoke about jobs being lost due to technological advancements, the emergence of non-fungible tokens, and bitcoin regulation in a recent interview with millennial-news network Cheddar.

The serial entrepreneur, known for running his digital media company VaynerX, is among the most famous icons on social media for his “hustle culture.”

He spoke to Cheddar host Brad Smith about how NFTs are crucial to monetizing the web and said bitcoin has passed a key threshold in gaining legitimacy with the public.

Here are Vaynerchuk’s 11 best quotes from the conversation:

Job creation and reskilling post-COVID-19

1. “We’ve seen this before. When there’s huge technology advancements, things evolve.”

2. “Look what’s about to happen with artists, with NFTs. Jobs are happening all the time. We need to look at offense, not look at the defense of it.”

NFTs being crucial to the digital economy

3. “It feels like a sea change – the blockchain, the ledgerization [or] digitalization of all goods, the way music is distributed, books, the way art and collectibles are sold, the way season tickets can be sold.”

4. “Technology comes along and shrinks the middle and takes away the leverage from a lot of the middlemen.”

5. “People want social currency. Fashion is built on social currency.”

6. “What you’re going to see is people caring about the blue check on Instagram, or skins on Fortnight, or those Madden tokens. That is about to hit every part of our life.”

7. “Looking at what people own and transact is going to become a social norm the same way that Googling someone or checking their Instagram has become a social norm over the last 20 years.”

Possibility of bitcoin regulation

8. “Regulation is the elephant in the room.”

9. “I think it’s going to be extremely interesting over the next half-a-decade, to a decade to see what happens, and how much momentum will that currency, that community, have versus what happens if it gets over-regulated.”

Coinbase going public via a direct listing

10. “You don’t see companies doing this level of revenue profitably before an IPO, with a trend that is so macro that they’re dominating in.”

11. “I’m just very curious what the market is going to do with it, but they (Coinbase) have a lot of good math on their side.”

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Binance, the world’s largest crypto exchange, appoints former US senator Max Baucus as government liaison

Crypto application.

Binance Holdings on Thursday announced it has appointed Maxwell Baucus, a former Senator for Montana, as its policy and government-relations adviser.

The 79-year-old Democrat will be providing high-level guidance to the world’s largest cryptocurrency exchange, bringing with him “a wealth of political and regulatory expertise” after more than 30 years in American politics, including a seven-year run as Chairman of the Senate Finance Committee, the statement said.

Baucus, who also served as US ambassador to China from 2014 to 2017, will “play a key role consulting and liaising with US regulators and authorities” on policies that will affect and impact the cryptocurrency ecosystem, the statement added.

“His experience at the highest levels of government and intimate understanding of global regulation brings exceptional value to Binance and enhances our already strong compliance and policy team,” Binance CEO Changpeng Zhao said.

The Malta-based company currently does not serve US residents. In 2019, it set up a San Francisco-based bureau in the hopes of addressing that.

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Bitcoin is ‘speculation of the highest order’ and should be banned, says billionaire investor Rakesh Jhunjhunwala


Billionaire investor Rakesh Jhunjhunwala joined the chorus of bitcoin bulls on Tuesday, saying in an interview that regulators should crack down on the popular cryptocurrency. 

“I think it’s speculation of the highest order. I don’t want to join every party in town. I think the hangover is much worse,” he told CNBC. “I will never buy bitcoin in my life.”

Jhunjhunwala, sometimes referred to as India’s Warren Buffet, also said that regulators in India should take a stand.

The Indian government has yet to implement laws on cryptocurrencies, but in an upcoming session, members of the parliament are said to be considering banning “private cryptocurrencies.” This will make India one of the few countries in the world to do so. There is also speculation that the Indian government plans to create its own national cryptocurrency

“I think regulators should step in and ban bitcoin,” said Jhunjhunwala, who is also a partner at Rare Enterprises, a privately owned stock trading firm. “And they should focus on the digital rupee.”

Apart from using bitcoin as a hedge against inflation, many investors also see it as a a future method of transacting. But the billionaire says the volatility of the digital asset will make this difficult.

“Something that fluctuates 5% a day, 10% a day, cant be a currency,” the billionaire said. “The power to issue currencies… should only be with the state.” 

On Monday, US Treasury Secretary Janet Yellen also cast doubt on the utility of bitcoin as a payment method.

“I don’t think that bitcoin is widely used as a transaction mechanism,” Yellen told the DealBook DC Policy Project. “It’s an extremely inefficient way of conducting transactions and the amount of energy that’s consumed in processing those transactions is staggering.”

Bitcoin staged an epic rally in February before slumping at the start of this week. The token breached the $58,000-level on Sunday, while it hit a $1 trillion market capitalization for the first time last Friday.

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Janet Yellen suggests ‘curtailing’ cryptocurrencies such as Bitcoin, saying they are mainly used for illegal financing

Janet Yellen expressed concern about cryptocurrencies like Bitcoin, which have surged in price

Treasury secretary nominee Janet Yellen has suggested lawmakers should “curtail” the use of cryptocurrencies such as Bitcoin, saying she is concerned that they are “mainly” used for illegal activities.

Her comments come amid a surge of interest in Bitcoin, with its price soaring around 300% in the last year. The Bitcoin price was last down 7.59% to $34,183.57, while rival cryptocurrency Ethereum’s price was down 9.74% to $1,259.97, after hitting an all-time high of more than $1,430 yesterday.

But the comments from Yellen suggest the incoming administration of Joe Biden could be hostile to cryptocurrencies and attempt to ramp up regulation. Watchdogs around the world, from the European Central Bank to the UK’s financial regulator, have recently expressed concern over cryptocurrencies like Bitcoin.

Senator Maggie Hassan yesterday asked Yellen about the dangers of terrorists using cryptocurrencies during the latter’s Treasury confirmation hearing.

Read More: Michael Saylor has invested over $1 billion of MicroStrategy’s funds in Bitcoin. The software CEO-turned Bitcoin whale explains why he is making such a massive bet on the digital asset

Yellen said: “You’re absolutely right that the technologies to accomplish this change over time, and we need to make sure that our methods for dealing with these matters, with terrorist financing, change along with changing technology.

“Cryptocurrencies are a particular concern. I think many are used – at least in a transaction sense – mainly for illicit financing.

“And I think we really need to examine ways in which we can curtail their use and make sure that money laundering doesn’t occur through those channels.”

Yellen’s comments echoed those of ECB president Christine Lagarde, who last week said Bitcoin had been used for some “totally reprehensible money laundering activity”.

Major investors also have similar worries. Warren Buffet said last year that “Bitcoin has been used to move around a fair amount of money illegally”. He said investors should “go short suitcases” as criminals will no longer need them to carry cash.

Cryptocurrencies are digital currencies that have no physical form and are not controlled by a centralized authority such as a central bank. This means they are largely unregulated and untraceable, making them appealing to criminals.

Yet their advocates say the lack of central control makes them attractive in other ways. For example, they argue Bitcoin can serve as protection against the debasement of national currencies when central banks launch huge stimulus programs.

Read More: GOLDMAN SACHS: Buy these 25 stocks best-positioned to juice profits in 2021 as stimulus and vaccine progress spur economic growth

Bitcoin bulls are hugely excited by the recent jump in the cryptocurrency’s price.

Paolo Ardoino, chief technology officer at crypto exchange Bitfinex, said: “The king of crypto is the base layer for an emerging alternative financial system.

“Bitcoin is providing a solid foundation for a staggering array of projects, some of which will fundamentally change the nature of money by the end of the decade.” Bitcoin products include funds and options.

Yet regulators urge caution. Earlier this month, the UK’s Financial Conduct Authority warned that people who invest in cryptocurrencies like Bitcoin and Ethereum could well “lose all their money”.

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Bitcoin is irrelevant to financial markets and investors ‘are going to weep’ if regulators come down hard on crypto, says Kevin O’Leary

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  • Kevin O’Leary told CNBC on Thursday bitcoin is irrelevant to financial markets and at risk of regulation. 
  • His comments come as an increasing number of institutions like Guggenheim and SkyBridge capital invest millions into the cryptocurrency, driving a rally of over 200% in 2020. 
  • “I’m waiting for the day that one of these regulators comes down hard on bitcoin. Grown men are going to weep when that happens. You’ll never see a loss of capital like that ever in your life. It will be brutal,” he said. 
  • Treasury Secretary Steven Mnuchin is proposing new regulation that would require certain cryptocurrency traders to provide more information about their identities and cryptocurrency transactions.
  • View Business Insider’s homepage for more stories.

Kevin O’Leary told CNBC on Thursday that bitcoin is irrelevant to financial markets and too at risk of regulations to be taken seriously by institutional investors.

“Is this a nothing burger? It’s not even a single cell amoeba,” the O’Shares chairman said,
“I love to talk about it, it’s fun to watch it go up and down, but during the day, when the bell rings, I don’t talk to anybody that’s worried about this. They do not put capital to work in bitcoin.”

His comments come as more institutional players are piling in, validating bitcoin’s legitimacy as a store of value and hedge against inflation. Earlier this week, SkyBridge Capital invested $25 million into a new bitcoin fund, while last month, Guggenheim filed to reserve the right for 10% of its $5.3 billion Macro Opportunities Fund to invest in the Grayscale Bitcoin Trust.

Read more: Renowned strategist Tom Lee says to buy these 29 stocks that were ravaged by the pandemic but now poised to boom as the world reopens – and they’re all top-rated by 3 different investing strategies

O’Leary said that the concept of a digital currency will likely come to fruition in the future, but investors should be careful glorifying bitcoin while it has yet to fulfill a defined role in financial markets and while it could still be regulated. This year, bitcoin has skyrocketed over 200%, and many crypto bulls are forecasting an explosion of growth in 2021. 

Though regulations could be coming for the popular token. Treasury Secretary Steven Mnuchin is proposing new rules that would require certain cryptocurrency traders to provide more information about their identities and cryptocurrency transactions. This doesn’t appear to have scared off various institutional investors, but O’Leary, who said he has $52.77 in a crypto wallet, is more worried.

“I’m waiting for the day that one of these regulators comes down hard on bitcoin. Grown men are going to weep when that happens. You’ll never see a loss of capital like that ever in your life. It will be brutal,” he said. 

O’Leary added: “This whole market, even if Bitcoin were to go up, another 2000% is completely irrelevant to the institutional client.”

Read more: ‘I don’t see this ending well’: A 47-year market vet breaks down why stocks are a ‘few months’ away from a 75% crash – and says gold will surge to $10,000 because of a tidal wave of inflation

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