From Bridgewater Dario, 7 thoughts on the future development of Bitcoin
Recently, Dario, the founder of Bridgewater Fund and a well-known hedge fund investor on Wall Street, published a new article that talked in detail about his latest insights on Bitcoin.
Dario has talked about Bitcoin many times in recent years, and his views have been gradually accepted from the initial contempt, especially at the end of last year, he also said that he might have misread some aspects of Bitcoin. In the first two days, he published the article “My View on Bitcoin”, and he judged Bitcoin with a rather positive attitude.
The reading volume of this article, including its Chinese translation, is quite high. Many readers who read this article hope to see from the article how this Wall Street master endorsed Bitcoin, but I think the greater significance of reading this article lies in Learn the underlying thinking logic.
Many investment masters become masters with their unique thinking and unique thinking. As ordinary investors, what they need to learn from them is to learn their thinking and thinking. And their thinking and ideas are often reflected in their articles, so the core thing we read these masters’ articles I think is to understand and comprehend their way of thinking from the articles.
And a traditional investment master can have such a big change in attitude towards emerging things like Bitcoin, and his article is more worthy of our understanding and thinking from this aspect.
First of all, his first point: “I found that most people who want to promote Bitcoin are trying to find a way of narrative, while those who oppose Bitcoin, those who are scared to shrink in the corner use Another way of narrative.”
In this sentence, Dario used a derogatory description of the attitude of those who opposed Bitcoin. Obviously, in Dario’s view, the fear of Bitcoin as a new thing by those who oppose it is ridiculous. This also reflects from the side that he is a person who is boldly accepting new things and constantly revising his views.
The second point of view: “About 1350 AD, the Medici family launched credit products, which resulted in bankers becoming rich. Similarly, Bitcoin overturned the existing monetary system and allowed its inventors and those who entered early. People in the field have become very rich, and more people will likely become rich in the future.”
Here, Dario quoted historical financial innovations, comparing Bitcoin with historical events. This is also a way I like very much, but because I am more familiar with the history of the Internet than the history of finance, I often compare the development of Bitcoin and digital currency with the development of the Internet. Although the method of comparison is different, I can also see the bright future of digital currency from the history of the Internet.
Everyone’s historical background and knowledge focus are different, but the universal laws reflected in the history of different fields should be connected. As long as we are good at finding laws from history, we can find a suitable way to describe digital currency from the history we know.
The third point of view: “It is undeniable that the demand for gold has been increasing for a long time in the past, and there are not many assets in the market that can replace gold. This is because global debt and currency casting are all going on at the same time. I think This trend will continue in the future. Because of the current situation, the global market’s demand for a currency or limited value-preserving assets is increasing. Not only that, the market’s demand for private assets is also rising. Such assets and gold are actually very different. Similar, because they can maintain value, but the number of issuances is small, and the market size is relatively small. Bitcoin and other competing altcoins may be able to meet this demand.”
Here, Dario is thinking about the role of Bitcoin in dealing with money printing and fighting inflation from the macro perspective of the global flood. This is also the angle that I often think about, and it is also an important factor that ordinary investors should pay attention to. The growth of any investment product cannot be separated from the irrigation of the financial environment.
The fourth point of view: “I think the biggest problem is what practical use it has and how much demand it will have in the future. Since the supply of Bitcoin is limited, people must estimate the price by estimating demand.”
Here, Dario is still trying to give a position on the use of Bitcoin. Although he repeatedly compares Bitcoin with gold in the article, it seems that he still maintains a certain degree of caution. But I am more optimistic. I think the biggest use of Bitcoin is to create value-preserving assets like gold in the digital world.
The fifth point of view: “But due to the fixed nature of Bitcoin, it is destined to be unable to evolve, so I think there will be other cryptocurrencies to replace Bitcoin in the future, and Bitcoin will eventually be eliminated, so invest in Bitcoin Currency is also a risk”.
I have reservations about this point of view. We can say that Bitcoin will be eliminated in terms of functionality. For example, its functionality is far inferior to Ethereum. But it is difficult to be eliminated in terms of value storage. This is like gold. Gold is not the rarest metal in the world, but it is the most recognized precious metal in the world.
The sixth point of view: “If you stand from the standpoint of government officials, it is easy to understand their behaviour and thoughts. They will never allow Bitcoin (or gold) to surpass the money and credit they provide and become a better choice. So, I think the biggest risk facing Bitcoin is a success because once it succeeds, the government will spare no effort to try to kill it.”
I very much agree with this view. In fact, since gold withdrew from currency circulation, the government, especially the US government, has been suppressing gold and pushing the US dollar. Because the rise of gold is definitely not conducive to the hegemony of the dollar. I am also worried that in the future when the status of Bitcoin begins to threaten the status of legal currencies of various countries, will the global governments unite and use some means to strangle the circulation of Bitcoin and suppress its value.
However, I am more inclined to look at the future of Bitcoin with an optimistic attitude.
The seventh point of view: “So to me, Bitcoin is like a long-term option that is difficult to predict in the future. I can invest in it, but even a loss of 80% will not affect me.”
I deeply agree with this view. I have written many times in previous articles that I am psychologically prepared for the DeFi tokens I invested in. I have also repeatedly written about the importance of risk diversification. Although I also invest in digital currencies, I never allocate all my funds in digital currencies, but in various fields. So even if the digital currency goes to zero one day, I will still have other assets at the bottom.
The above points are some thoughts that I think are worth sharing with you.
Throughout this article, we can see Dario’s perspective and thinking when examining an investment product:
When he is faced with a new thing, he will try to find the law from history; when he judges the value of an investment product, he will look for a target, and combined with the current macro environment to see if there is the demand for the investment product; When he looks at the risk of an investment product, he will think about its biggest risk; when he is ready to invest, he will consider whether he can bear the risk once the risk occurs.
The most shocking thing about the whole article is Dario’s flexibility in thinking. The so-called flexibility of thinking means that you are not limited by inherent thinking and solidified knowledge, dare to challenge your own cognition, try to accept new things beyond cognition, be willing to look at new things humbly, and dare to correct yourself in time if you find that your opinion is wrong. View.
As Jobs said, “Keep hungry, stay stupid.”
Mr Dario is 72 years old this year, and he can still have such strong flexible thinking at this age. On the other hand, most young people around us, when talking about Bitcoin, are hype and pyramid schemes, most people have lost the flexibility of thinking. This is worthy of lifelong vigilance for each of our investors.