Billionaire investor Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates, thinks bitcoin could have a similar fate to gold in the US in the 1930s.
[B]ack in the 1930s in the war years… because cash and bonds were such bad investments compared to other things, there was a move towards those other things, and then the government banned them, ”Dalio told Yahoo Finance on Wednesday. ” They have banned gold.
“That is why banning bitcoin is also a good opportunity,” he said.
Bitcoin, the largest cryptocurrency in terms of market value, has “proven itself” because the blockchain has not been hacked and it has a large following, Dalio said. “It’s an alternate storehouse of wealth. It’s like digital money. And those are the pluses.”
“So I think it’s very likely that under certain circumstances you will have it banned the way gold was banned,” Dalio said.
Dalio explained that “every country cherishes its monopoly on controlling supply and demand. They don’t want other funds to be active or competing because things can get out of hand.”
As an example, Dalio cited India and its efforts to ban cryptocurrency.
Whether it could be effectively banned in the US is a different story.
‘I do not know. I’m not an expert in that, ”said Dalio. ‘But there is a long way. From people who are under government supervision and so on, I understand that they can track it. They can know who is dealing with it. ‘
James Ledbetter, editor of fintech newsletter FIN and CNBC contributor, previously told CNBC Make It that it would be quite difficult for the government to ban bitcoin effectively.
While there are “concerns or risks surrounding the regulation” of bitcoin, “I don’t think even a concerted effort between different countries and different central banks could actually shut down bitcoin,” Ledbetter said. “I don’t think that’s technologically possible. But there are ways in which bitcoin can be regulated.”
While not mentioning a ban, Federal Reserve Chairman Jerome Powell has repeatedly warned against cryptocurrencies such as bitcoin.
“They are highly volatile and therefore not really useful stores of value, and they are not backed by anything,” Powell said Monday during a virtual panel discussion on digital banking. “It is more of a speculative asset that is essentially a substitute for gold than for the dollar.”
Dalio has previously sued the government banning bitcoin.
In a January post entitled “What I Think of Bitcoin” on the Bridgewater Associates website, Dalio wrote that while he is “not a bitcoin / cryptocurrency expert … I suspect that Bitcoin’s greatest risk is successful because if it is successful. is, the government will try to kill it and they have a lot of power to succeed. ”
Dalio also wrote that there is likely to be a “better alternative” to bitcoin and supplant it, “because that’s how the evolution of everything works,” he said. “I see that as a risk.”
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