Billionaire investor Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, believes that bitcoin may have a fate similar to that of gold in the United States during the 1930s.
“[B]ack in the thirties in the war years … because money and bonds were bad investments in relation to other things, there was a movement towards these other things, and then the government banned them, “Dalio told Yahoo Finance on Wednesday. ” They banned gold.
“That’s why banning bitcoin is also a good chance,” he said.
Bitcoin, the largest cryptocurrency in terms of market value, “has been proven” as its blockchain has not been hacked and has many followers, said Dalio. “It is an alternative deposit of wealth. It is like digital money. And those are the advantages.”
“So I think it would be very likely that, in a given set of circumstances, you would make it illegal in the same way that gold was banned,” said Dalio.
Dalio explained that “every country values its monopoly on supply and demand control. They do not want other resources to be operating or competing, because things can get out of control.”
As an example, Dalio cited India and its efforts to ban cryptocurrency.
Whether this could be effectively banned in the United States is another story.
“I don’t know. I’m not an expert on that,” said Dalio. “But there is a whole way. My understanding, of people who are on government watch and so on, is that yes, they can track you. They can know who is dealing with this.”
However, James Ledbetter, editor of the fintech FIN newsletter and a CNBC contributor, previously told CNBC Make It that it would be very difficult for the government to effectively ban bitcoin.
While there is “concern or risk around regulation” of bitcoin, “I don’t think even a joint effort between different countries and central banks could really shut down bitcoin,” said Ledbetter. “I don’t think it’s technologically possible. But there are ways to regulate bitcoin.”
Although he did not mention the ban, Federal Reserve Chairman Jerome Powell has repeatedly warned against cryptocurrencies like bitcoin.
“They are highly volatile and are therefore not really useful value deposits and are not supported by anything,” Powell said during a virtual panel discussion on digital banking on Monday. “It is more of a speculative asset that is essentially a substitute for gold than for the dollar.”
Dalio had already addressed the government to ban bitcoin.
In a January post entitled “What I think about Bitcoin” on the Bridgewater Associates website, Dalio wrote that although he “is not a bitcoin / cryptocurrency expert … I suspect that Bitcoin’s biggest risk is succeeding, because if is successful, the government will try to kill you and they have a lot of power to succeed. “
Dalio also wrote that a “better alternative” to bitcoin is likely to emerge and replace it, “because that’s how the evolution of everything works,” he said. “I see this as a risk.”
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