Ray Dalio, founder of Bridgewater Associates, stated in a recent interview that although he holds a small amount of Bitcoin, he still believes there are some issues with Bitcoin that prevent it from being an attractive option for central banks, and he personally prefers gold.
Ray Dalio said during an interview on the podcast 'WTF is' hosted by Nikhil Kamath, co-founder of the investment brokerage platform Zerodha:
'The supply of Bitcoin is limited... It is viewed as currency and as a means of storing wealth. However, due to its inherent issues, central banks and many other institutions are unlikely to hold it on a large scale.'
Dalio pointed out that the public ledger of bitcoin transactions — which anonymously shows users' wallet addresses and transaction behaviors — is one of the key issues. He stated:
"On the bitcoin network, all transactions can potentially be traced. People can monitor the content of transactions, governments can also monitor transactions, and governments can intervene in those transactions. As we mentioned earlier, gold is the only asset you can hold that they cannot tamper with or control, which you personally have in hand, right? Bitcoin is not like that."
Dalio is also concerned about the security of the bitcoin network. He then said:
"Moreover, bitcoin has other issues. Just like the possibility we discussed earlier: could someone create 'synthetic gold' like they do with 'synthetic diamonds', becoming a risk? Similarly, returning to bitcoin, it could also be hacked, become invalid, and face various situations, even be controlled. This is my view on bitcoin..."
However, Dalio clarified that he is not bearish on bitcoin, but rather, based on his pessimistic view of the future of fiat currency, he chose to diversify by holding some bitcoin as one of his allocation options. He stated:
"What I am not optimistic about is fiat currency, so when I observe this world, the question I ponder is simply: 'What should I hold then?' Therefore, I will hold a little bitcoin. And I do have a small amount of bitcoin, but for me, it is still not as attractive as gold."
Dalio also expressed similar views during an interview last month, clearly stating that bitcoin has accounted for about 1% of his overall investment portfolio for some time.
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