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Ray Dalio: Bitcoin is “gold-like” but governments won’t let it win



The hedge fund manager had lots of good things to say about Bitcoin, but he doesn’t think governments will allow serious competitors to their money issuance.
Billionaire hedge fund manager Ray Dalio has sought to clarify his views on the world’s most famous digital asset with the publication of a short essay titled “What I Really Think of Bitcoin”.
Dalio’s views on Bitcoin (BTC) — which he said should be read directly to avoid media misinterpretation — are both hopeful and cautious. Firstly, Dalio recognized the technical accomplishments of Bitcoin and praised its ability to last for over a decade already:
What’s more, Dalio believes that Bitcoin is already an “alternative gold-like asset,” and one that will become more and more important in the future due to the debasement of fiat currencies by excessive money and debt printing:
Dalio thinks Bitcoin has already crossed the line from being a “speculative idea” to something that will “probably” have some value in time to come:
However, not everything is rosy regarding Dalio’s thoughts on the world’s first cryptocurrency. The hedge fund manager thinks the extent of Bitcoin’s privacy will depend entirely on how private the government allows it to be:
Why would governments want to disrupt the use of Bitcoin? As Dalio points out, the principles at play now are the exact same as those at play in the year 1694, when the newly launched Bank of England sought to solidify its position as the sole issuer of debt and monies within its borders.
Leaders in any industry will naturally try to quash opposition, and the same might happen with Bitcoin, especially, as Dalio points out, if it ends up becoming more and more popular.
Dalio does not think government agencies will allow Bitcoin to flourish as an alternative to printed money — a sobering thought which pours some icy water on his earlier praise of the technology. Dalio said:
The alleged demand which Bitcoin is credited with having as a result of its diminishing supply was also questioned by Dalio, who pointed out that the emergence of “Bitcoin-like” assets (other altcoins) effectively expanded Bitcoin’s supply by offering an alternative but similar service.
Putting thoughts and theories to one side, Dalio also asked his staff at Bridgewater Associates to calculate the efficiency of Bitcoin as a diversified asset in relation to gold during market drawdowns.
The researchers concluded that it was still too early to judge whether Bitcoin would provide the same degree of diversification in the future.
“We hesitate to draw any firm conclusions with such a small sample size and given how quickly the cryptocurrency world is evolving. So far, Bitcoin’s ability to offer some diversification benefit seems more theoretical than realized,” the report stated.


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