Billionaire investor Ray Dalio has warned against Bitcoin as a long-term store of value and safe-haven asset, saying it lacks central bank backing and has ongoing concerns over privacy limitations and quantum entanglement.
Dalio dismissed the idea that Bitcoin (BTC) could function as digital gold, telling the All-In Podcast on Tuesday that “there is only one gold.”
“Gold is not a precious metal that is speculated on,” Dalio said, adding that it is the “most trusted currency,” the second largest reserve currency held by central banks.
Dalio added that he doesn’t know why central banks want to buy Bitcoin and hold it for so long.
Dalio has previously said that Bitcoin has the characteristics of a hard currency, noting that it “has a very high correlation with technological resources”.
“So, from an ownership perspective, supply and demand can be affected if someone squeezes in one area and sells off what they own.”
Dalio also raised concerns about Bitcoin’s lack of privacy, stating that “every transaction can be monitored” and warning that quantum computing could threaten the network.
In July, Dalio recommended optimizing 15% of the portfolio to Bitcoin or gold for the “best return-to-risk ratio” in light of America’s severe debt crisis and continued currency depreciation.
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Between July and early October, Bitcoin and gold both rallied until a broader crypto market crash wiped out nearly $20 billion in shorted positions.
The pair then split in early October, and bitcoin has fallen more than 45% from its October peak to $68,420, while gold has continued to rally, rising 30% to $5,120 during that time.
Dalio says the world as we know it has changed
Dalio sent a message to investors last month, warning that the “global order” led by the U.S. for centuries is “broken” and that investors should rethink how they protect their wealth amid growing geopolitical conflict and economic turmoil.
Dalio reinforced his long-standing position that stocks of value, especially gold, are the best option for storing wealth when currencies fall and the credit system collapses, while credit assets are vulnerable to increased uncertainty.
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