The Daily: Ray Dalio recommends bitcoin amid rising debt levels, MicroStrategy eyes Nasdaq 100 inclusion and more

Happy Wednesday! In today's Daily, Ray Dalio recommends bitcoin as "hard money," analysts at Bernstein expect the MicroStrategy flywheel effect to continue amid its potential inclusion in the Nasdaq 100 index, Citi Wealth says stablecoins are reinforcing the U.S. dollar's dominance and more.

Meanwhile, staking platform Marinade floats a proposal to tackle malicious validators and democratize MEV on Solana.

Let's get started.

Ray Dalio recommends bitcoin as 'hard money'

Billionaire investor Ray Dalio, founder of the world's largest hedge fund, Bridgewater Associates, endorsed bitcoin and gold as "hard money" over debt assets amid rising global indebtedness.

• "I want to steer away from debt assets like bonds and debt, and have some hard money like gold and bitcoin," Dalio said in a speech during the Abu Dhabi Finance Week in the UAE, according to the South China Morning Post.
• Dalio noted that all major economies, except Germany's, have seen indebtedness increase at "unprecedented levels."
• He believes these increasing debt levels will lead to inevitable debt crises and devaluation of fiat currencies.
• Dalio's latest stance is noteworthy given his previous comments criticizing bitcoin's effectiveness as money. "It's not an effective store hold of wealth. It's not an effective medium of exchange," he said in 2023.
• In 2020, he also cited bitcoin's volatility, limited use cases and lack of government control as drawbacks.
• Despite his skepticism, Dalio did, however, admit to owning some bitcoin in 2021.
• Dalio relinquished control of Bridgewater in 2022 after stepping down as CEO in 2017 and chairman in 2021.

Bernstein expects MicroStrategy's momentum to accelerate amid likely Nasdaq 100 inclusion

Analysts at Bernstein expect the MicroStrategy flywheel effect to continue , given the potential inclusion of the stock in the Nasdaq 100 index this month and the Trump administration's crypto focus.

• On Tuesday, Bloomberg analyst James Seyffart said MicroStrategy will likely enter the Nasdaq 100 on Dec. 23, potentially to be announced this Friday, with estimated net buying of at least $2.1 billion in shares by some of the largest ETFs to follow.
• MicroStrategy has added $16 billion in bitcoin — 40% of its total $40 billion position — over the past 40 days alone and currently trades at a 147% premium to its bitcoin net asset value, causing reservations from some investors.
• However, the Bernstein analysts believe this can continue for a long time, with MicroStrategy using around $15 billion of its proposed $42 billion debt and equity raise plan for bitcoin acquisitions so far and showing no signs of slowing down.
• Bernstein rates MicroStrategy as outperform with a $600 price target — a potential 59% gain from its Tuesday closing price of $377.32.

Citi Wealth says stablecoins challenge the idea of bitcoin ending US dollar's dominance

Citi Wealth said in a newly published report that stablecoins, accounting for over 80% of cryptocurrency trading volume, reinforce the U.S. dollar's longstanding global dominance .

• Stablecoins also challenge the narrative that bitcoin will someday end the U.S. dollar's supremacy, the analysts argued.
• Stablecoins pegged to the U.S. dollar and backed by cash reserves and Treasuries make dollars more accessible globally, increasing demand for U.S. Treasury bills.
• Stablecoin activity reached $5.5 trillion in Q1 2024, surpassing Visa's $3.9 trillion volume, the analysts noted, prompting traditional payment providers to adapt with their own stablecoin initiatives.
• Citi Wealth suggests greater regulatory clarity could further legitimize stablecoins, boosting their appeal and reinforcing the U.S. dollar's hegemony.

Balancer V3 launches with Aave partnership for Boosted Pools

Balancer's V3 DEX protocol upgrade went live on Wednesday, focusing on liquidity optimization and improved developer tools.

• Balancer V3 introduces 100% Boosted Pools, combining its permissionless automated market maker technology with DeFi lending protocol Aave's yield market infrastructure.
• Boosted Pools offer a passive liquidity solution that directs all underlying capital to external yield markets while maintaining liquidity for swaps, the team explained.
• New features also include custom pool types to make building AMMs faster and more accessible and a Hooks Framework to extend the customizable functionality of existing pools.

Circle and Binance partnership seeks to boost global adoption of USDC

Circle and Binance have partnered to expand USDC adoption globally , with the crypto exchange integrating the stablecoin for trading, savings and payments.

• "The world's largest exchange and crypto super app and the world's largest trusted and compliant dollar stablecoin operator are coming together to work on the next phase of stablecoin and crypto adoption," Circle CEO Jeremy Allaire wrote on X.
• Binance also plans to adopt USDC as a key stablecoin for its corporate treasury, signaling deeper institutional use of the asset.

In the next 24 hours

• The ECB's latest interest rate decision is due at 8:15 a.m. ET on Thursday. U.S. jobless claims and PPI data follow at 8:30 a.m.
• ECB President Christine Lagarde will speak at 10:15 a.m.
• Global Blockchain Show 2024 kicks off in Dubai.

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Updated to clarify Citi Wealth citations.