• If cryptocurrency gains mainstream success, Ray Dalio said, regulators will ultimately take control of it.
• “I believe that if it is truly effective, they will kill it or attempt to kill it at the end of the day. And I believe they will kill it because they have the means to do so,” he added.
• Bridgewater Associates, the world's largest hedge fund, still believes bitcoin makes a good alternative to cash.

 

Ray Dalio, the founder of Bridgewater Associates, the world's largest hedge fund, believes that if bitcoin becomes widespread, regulators will eventually seize control of it.

“I believe that if it is truly effective, they will kill it or attempt to kill it at the end of the day. And I believe they will destroy it because they have the means to do so,” Dalio said "Squawk Box" on Wednesday at the SALT conference in New York.

As the wild rides in the speculative markets continued to attract attention, US regulators increased their monitoring of the risky cryptocurrency space. Chairman Gary Gensler of the Securities and Exchange Commission said Tuesday that the top regulator on Wall Street is working around the clock to develop a set of rules to protect investors by properly regulating the thousands of new digital assets and currencies.

Bitcoin has been quite successful lately, despite some severe periods of volatility. The cryptocurrency has more than doubled in value in the previous year, and was trading at roughly $47,500 on Wednesday. Earlier this year, it reached a peak of over $60,000.

“El Salvador is taking it on, while India and China are getting rid of it. And you have  got the United States debating how to regulate it, and it's still under control,” Dalio said.

El Salvador became the first country to recognise bitcoin as legal cash in June. Meanwhile, India is anticipated to introduce legislation prohibiting the use of cryptocurrencies and punishing miners and merchants. China has begun to intervene in the cryptocurrency markets, ordering miners to cease operations.

Dalio said, bitcoin lacks intrinsic value, which means it has no basic or objective value.

“From a historical perspective, there were a lot of items that didn't have inherent value but had perceived value. Then it got hot, and then it got chilly. Either way, it's possible. All you have to do is figure out what it is. Dalio speculated that it could be tulips in Holland.

Despite this, the billionaire investor believes bitcoin is a good alternative to cash, and he owns a smaller amount of bitcoin than he does gold in his portfolio.

“I believe it is worthwhile to evaluate all of the alternatives to cash and other financial assets. Bitcoin is a viable option. Dalio stated, "I have a certain amount of money in bitcoin." “It's an incredible achievement to have gotten it from where the programming started to where it is now after all these years.”