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:
“I believe
Bitcoin is one hell of an invention. To have invented a new type of
money via a system that is programmed into a computer and that has
worked for around 10 years and is rapidly gaining popularity as both a
type of money and a storehold of wealth is an amazing accomplishment.”
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:
“Those who have built it and supported the
dream of making this new kind of money a reality have done a fabulous
job of sustaining that dream and moving Bitcoin (by which I mean it and
its analogous competitors) into being an alternative gold-like asset.
There aren’t many alternative gold-like assets at this time of rising
need for them (because of all the debt and money creations that are
underway and will happen in the future)."
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:
“It
seems to me that Bitcoin has succeeded in crossing the line from being a
highly speculative idea that could well not be around in short order to
probably being around and probably having some value in the future."
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:
“As
an extension of Bitcoin being digital are the questions of how private
it is and what the government will allow and not allow it to be.
Regarding privacy, it appears that Bitcoin will unlikely be as private
as some people surmise. It is, after all, a public ledger…”
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.
“Rather
than it being far-fetched that the government would invade the privacy
and/or prevent the use of Bitcoin (and its competitors) it seems to me
that the more successful it is the more likely these possibilities would
be.”
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:
“It is hard for me to imagine
that they would allow Bitcoin (or gold) to be an obviously better choice
than the money and credit that they are producing. I suspect that
Bitcoin’s biggest risk is being successful, because if it’s successful,
the government will try to kill it and they have a lot of power to
succeed.”
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.
source link : https://cointelegraph.com/news/ray-dalio-bitcoin-is-gold-like-but-governments-won-t-let-it-win
