Ray Dalio cautions on Bitcoin, says ‘there is only one gold’

Ray Dalio, a prominent investor, has expressed skepticism about Bitcoin's viability as a long-term store of value and safe-haven asset. He cited a lack of central bank support, privacy concerns, and potential threats from quantum computing as key drawbacks.

Dalio's View on Bitcoin vs. Gold

Speaking on the All-In Podcast, Dalio stated that Bitcoin cannot function as digital gold, asserting that "there is only one gold." He described gold as the most established money and the second-largest reserve currency held by central banks, questioning why central banks would opt for Bitcoin over gold. Dalio previously acknowledged Bitcoin's hard money characteristics and its correlation with tech stocks, noting that supply and demand could be impacted by market squeezes.

“So, from an ownership perspective, supply and demand can be affected if somebody gets squeezed in one area and has to sell something else they hold.”

He also highlighted Bitcoin's transactional transparency, where "any transaction can be monitored," and the potential risk posed by quantum computing to the network.

Previous Recommendations and Market Performance

In July, Dalio had suggested a 15% allocation to Bitcoin or gold for an optimal return-to-risk ratio, citing America's debt issues and currency debasement. Between July and early October, both Bitcoin and gold saw gains. However, a subsequent crypto market crash led to significant losses in leveraged positions. Since its October peak, Bitcoin has fallen over 45% to $68,420, while gold has risen over 30% to $5,120 during the same period.

Broader Economic Concerns

Dalio recently warned that the global World Order, led by the US for decades, has "broken down." He advised investors to reconsider wealth preservation strategies amidst increasing geopolitical conflict and economic instability. He reiterated his long-standing belief that stores of value, particularly gold, are the most effective means to preserve wealth when currencies weaken and credit systems face breakdown, making debt assets vulnerable.