Billionaire investor Ray Dalio, founding father of the world’s largest hedge fund Bridgewater Associates, thinks bitcoin might have the same destiny as gold did within the U.S. during the 1930s.
“[B]ack in the ’30s in the war years … because cash and bonds were such bad investments relative to other things, there was the movement to those other things, and then the government outlawed them,” Dalio told Yahoo Finance on Wednesday. “They outlawed gold.
“That’s why additionally outlawing bitcoin is an efficient chance,” he said.
Bitcoin, the largest cryptocurrency in terms of market value, has “confirmed itself” as its blockchain hasn’t been hacked and it has a large following, Dalio said. “It is an alternate store-hold of wealth. It’s like a digital money. And these are the pluses.”
“So I feel that it could be very possible that you’ll have it underneath a sure set of circumstances outlawed the way in which gold was outlawed,” Dalio said.
Dalio explained that “each nation treasures its monopoly on controlling the availability and demand. They don’t desire different monies to be working or competing, as a result of issues can get uncontrolled.”
As an instance, Dalio cited India and its efforts to ban cryptocurrency.
Whether it might it’s successfully banned within the U.S. is one other story.
“I do not know. I’m not an professional on that,” Dalio said. “But, there’s a complete method. My understanding, from people who find themselves in authorities surveillance and so forth, is sure, they can track it. They can know who’s dealing with it.”
However, James Ledbetter, editor of fintech newsletter FIN and CNBC contributor, previously told CNBC Make It that it’d be quite difficult for the government to effectively ban bitcoin.
Although there’s “concern or threat round regulation” of bitcoin, “I do not suppose even a concerted effort amongst completely different nations and completely different central banks might truly shut down bitcoin,” Ledbetter said. “I do not suppose that is technologically doable. But there are methods that bitcoin could possibly be regulated.”
While he hasn’t mentioned a ban, Federal Reserve chairman Jerome Powell has repeatedly warned against cryptocurrencies like bitcoin.
“They’re extremely risky and due to this fact not likely helpful shops of worth they usually’re not backed by something,” Powell stated during a virtual panel discussion on digital banking on Monday. “It’s extra a speculative asset that is primarily an alternative choice to gold relatively than for the greenback.”
Dalio has beforehand addressed the federal government banning bitcoin.
In a January post titled “What I Think of Bitcoin” on the Bridgewater Associates website, Dalio wrote that although he is “not a bitcoin/cryptocurrency professional … I believe that Bitcoin’s greatest threat is being profitable, as a result of if it is profitable, the federal government will attempt to kill it they usually have a number of energy to succeed.”
Dalio also wrote that a “higher various” to bitcoin will likely come along and displace it, “as a result of that’s the method the evolution of every part works,” he said. “I see that as a threat.”