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.
Join the conversation about this story »
NOW WATCH: Why 'moist' is one of the most hated words in the English language