Ray Dalio’s Bridgewater Associates, the largest hedge fund in the world, is reportedly making a move into crypto investing.

The Digital Currency Group-owned New York crypto-media outlet CoinDesk broke the story on Tuesday, citing two unnamed sources familiar with the details.

Bridgewater is apparently planning to back an “external vehicle” but has no current intention of directly investing in crypto assets. Also, the hedge fund’s investment will be “miniscule” compared with its total US$150 billion in assets under management, according to CoinDesk’s sources.

Nevertheless, it’s yet more significant validation for the growing digital asset class. It also might be part of the reason Bitcoin and the crypto market saw a spike in value yesterday.

According to Ben Simpson from the Aussie-founded Collective Shift crypto research and education platform, the price of Bitcoin swiftly rose about 3.3 per cent following the Bridgewater news.

“I think this is going to follow suit for more hedge funds to get their clients into Bitcoin and other crypto assets,” Simpson speculated.


Not the first hedge fund on board

Some other large mainstream hedge funds have actually already fed billons of dollars into the crypto industry over the past year, including Alan Howard’s Brevan Howard Asset Management and Paul Tudor Jones’ Tudor Investment Corp.

London-based hedge fund Marshall Wace was also reported last July by the Financial Times as plotting crypto-related investments.

According to the Wall Street Journal, about US$1.14 trillion worth of cryptocurrencies were traded by institutional clients on the US exchange Coinbase in 2021.


Bridgewater is ‘doing serious diligence’

Details about Bridgewater’s exact plans are a bit light on from CoinDesk’s contacts at this stage, but there seems to be a crypto strategy in place for the first half of this year.

“Bridgewater is in a first-half plan this year,” one of the source told the media outlet in February. “They’re planning on having a small slug of their fund deployed directly into digital assets.”

Another person apparently confirmed: “Bridgewater is looking to get involved. They are doing serious diligence: liquidity, service providers and whatnot.”

Ray Dalio is a famed US investor with a net worth of reportedly more than US$22 billion. Originally dismissive of crypto, the Bridgewater founder changed his tune in January 2021, referring to Bitcoin as “one hell of an invention”, and then declaring in May that he personally holds some BTC.

More recently, Dalio told MarketWatch in December: “It has been an amazing accomplishment for Bitcoin to have achieved what it has done, not being hacked, having it work and having it adopted the way it has been,” adding – “I believe in the blockchain technology … It has earned credibility.”

The multi-billionaire did caveat, however, with: “If it is a threat to governments, it will probably be outlawed in some places when it becomes relatively attractive.”