Last week Ray Dalio – the legendary and largest hedgefund manager of our times released a “research and insights” column announcing that ” I believe Bitcoin is one hell of an invention. To have invented a new type of money via a system that is programmed into the computer and that has worked for around 10 years and is rapidly gaining popularity as both a type of money and a store hold of wealth is an amazing accomplishment “. The full letter can be found here ( Ray Dalio — What I Think of Bitcoin (bridgewater.com) ). At the end of this announcement was also another interesting thing – his assessment is that Bitcoin should grow to become a storehold of value and could come to replace what has been the value of gold i.e., approximately 10X its current valuations at constant supply. The other interesting aspect that he touches upon is the fact that Bitcoin and the cryptocurrency sector will provide a new class of funds for their clients. ( Dalio Expects to Soon Offer Alt-Cash Fund, Says ‘Bitcoin Won’t Escape Our Scrutiny’ – CoinDesk )
Similar moves have been made by Paypal -which allows individuals to now purchase cryptocurrency from a PayPal wallet. While such a wallet is really not feature-rich and doesn’t allow individuals to trade or even send this purchased cryptocurrency outside the wallet, Paypal has set up an entire cryptocurrency division to enable an upgradation of their services and cross country /currency movements using cryptocurrencies. The other large networks that are following PayPal’s example are VISA the world’s largest money transfer, credit enabling network which expects to convince banks to integrated with crypto wallets for the faster transaction of money across geographies. VISA is already offering services that enable users to directly use their debit cards from cloud-based wallets such as coinbase. Similar changes are being made by MasterCard and other networks.
As of date, major mainstream hedge funds are starting to offer products in the crypto-sector. The mainstream money exchange systems and payment systems are facilitating a combined financial transaction product that supports credit cards, currency, and cryptocurrency in one account. It is only a matter of time before mainstream banks (Bank of America, Chase, Wells Fargo, Citigroup, Bank of Santander) also start offering services to hold cryptocurrencies. At the end of the day, the main banking sector will have to rise to the fact that “alt-cash” systems increase the efficiency of the entire networked system providing increased security and traceability.