Billionaire hedge fund legend Ray Dalio doesn’t see digital currencies like Bitcoin (BTC) perform as well as other people. It is expected that the authorities will restrict the cryptocurrency when they see “substantial” growth.
Meanwhile, BTC Bridgewater has significantly surpassed it since the start of the year. Barry Silbert, CEO of Grayscale, a cryptocurrency investment firm with more than $ 9 billion in assets under management, said:
Year-to-date: Bridgewater Pure Alpha II Fund: -18%, Bitcoin: + 115%.
Of course, Bitcoin and Bridgewater cannot be directly compared. The first is a decentralized digital currency with a market value of $ 291 billion. The latter is a hedge fund managing $ 148 billion in assets as of September 2020.
However, the variance in performance shows that Bitcoin has a much higher likelihood of rewarding risk, especially given that today’s market cap is only 2.36% gold.
Other billionaire investors are also showing their appetite for Bitcoin
In the end, Dalio’s skepticism about cryptocurrency threatens regulators.
If cryptocurrencies see significant growth, Dalio said, governments will likely ramp up their efforts to curb them, although he did not specify the minimum that governments would hit the Bitcoin price to take direct action. He also said:
“I don’t think digital currencies will succeed as people hope.”
Government officials share Dalio’s suspicions. US President Donald Trump issued a statement regarding Bitcoin in July 2019. Then he wrote on Twitter:
“I am not a fan of Bitcoin and other non-financial cryptocurrencies, whose value is very volatile and depends on empty air.”
However, former US President Barack Obama called Bitcoin a “Swiss bank account”, referring to the fact that nation states cannot completely block anything, not only globally, but also something that individuals can easily protect.
During his keynote speech at the South by Southwest Festival in 2016, former President Barack Obama said of cryptocurrencies:
“Everyone wanders around with a Swiss bank account in their pocket.”
Bitcoin is, at its core, a peer-to-peer software protocol. Governments can move to restrict the use of cryptocurrencies by blocking the activation and deactivation of cryptocurrencies. But it would simply make combating money laundering initiatives less practical, as users would go underground or move to more friendly jurisdictions.
Additionally, with cryptocurrencies entering the gray market and people beginning to trade cryptocurrencies in a peer-to-peer network, it becomes increasingly difficult to combat illegal activity.
Thus, a strong case can be made that a complete ban on Bitcoin is not in the interest of governments.
Moreover, in recent months, more and more billionaires have started supporting Bitcoin. As Cointelegraph reports, the Bitcoin craze among organizations and smart money is due to the properties that make it effective, but perhaps most importantly, non-conflicting value storage.
Bitcoin is liquid and decentralized, easy to trade, transfer and store securely. These characteristics make it possible to function as a practical and safe haven against inflation with a low barrier to entry.
As DeFi developer Julien Bouteloup pointed out, Dalio has been skeptical of Bitcoin in the past. In 2017, before BTC reached a full-time high of around $ 20,000, Dalio described BTC as a bubble.
For now, Dalio is not convinced
In an interview with Yahoo Finance, Dalio also confirmed that he does not prefer Bitcoin over gold.
However, despite Bitcoin’s sharp 60% crash in March, digital assets were significantly ahead of gold during 2020.
Since the start of the year, gold has risen about 23%. During the same period, BTC recorded a gain of 119%, rising from $ 7,165 to over $ 15,700.