By William Watts, MarketWatch
Bloomberg
The founder of the world’s largest hedge fund says cryptocurrencies like bitcoin meet his firm’s criteria for a market bubble.
Bitcoin and its peers can’t be spent very easily and they make for a poor “storehold of wealth” compared with, say, gold, due to their extreme volatility, Ray Dalio of Bridgewater Associates told CNBC in a Tuesday morning interview.
Read: Everything you need to know about digital currencies, in one massive graphic
“Bitcoin is a highly speculative market. Bitcoin is a bubble,” he said.
See: Bitcoin might be forming a top when…your 68-year-old dad paints a picture of it
Bitcoin /zigman2/quotes/31322028/realtime BTCUSD +0.29% hit an all-time high around $4,950 on Sept. 1 but has since retreated to $3,982.13, according to research site Coindesk.com . For the year to date, the currency is up 311%. By comparison, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.14% has gained about 13% so far in 2017, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.47% is up about 12% over the same period.
Check out: Bitcoin at crossroads after shedding more than $27 billion in value
The billionaire investor said it was action in the cryptocurrencies has been “very much” driven by people thinking simply that they can sell it at a higher price, “so it’s a bubble.”
Dalio is one of many high-profile cryptocurrency skeptics. J.P. Morgan Chase & Co. /zigman2/quotes/205971034/composite JPM -1.04% Chief Jamie Dimon grabbed headlines—and criticism—when he last week offered a brutal takedown of bitcoin, calling it a fraud and a bubble that’s “worse than tulip bulbs and won’t end well.”
Bridgewater manages around $160 billion. Since its founding by Dalio in 1975, the firm has produced net gains after fees of $49.4 billion, putting it at the top of the list of the world’s hedge-fund managers, according to London-based LCH Investments.
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