Ray Dalio Says Central Banks Won’t Hold Bitcoin as Reserve Asset – Here’s Why

TLDR

• Ray Dalio says central banks are unlikely to hold Bitcoin as a reserve asset due to control and transparency concerns
• The billionaire hedge fund founder holds some Bitcoin but prefers gold because governments cannot monitor or interfere with gold transactions
• Dalio warns Bitcoin’s public blockchain allows governments to track and potentially interrupt transactions
• He raises security concerns that Bitcoin could be “cracked, broken, or controlled” in the future
• Bitcoin has dropped 22.1% over the past three months to around $87,944.77

Ray Dalio continues to express doubt about Bitcoin’s future as a central bank reserve asset. The billionaire founder of Bridgewater Associates shared his views during an appearance on Nikhil Kamath’s WTF Podcast released on December 20.

Dalio confirmed he owns some Bitcoin but keeps it as a small part of his portfolio. He said gold remains his preferred hard asset for wealth preservation.

The investor explained that Bitcoin’s design creates problems for central banks. Unlike gold, Bitcoin transactions are recorded on a public blockchain that governments can monitor.

Dalio stated that gold is the only asset governments cannot easily mess with or control. He believes this makes gold more attractive than Bitcoin for institutions that need reliable assets during crises.

The hedge fund manager also raised security concerns about Bitcoin’s long-term stability. He questioned whether the cryptocurrency could one day be cracked, broken, or controlled by outside forces.

Dalio compared these risks to synthetic diamonds that exist alongside natural ones. He suggested similar alternatives could emerge that undermine Bitcoin’s scarcity value.

Bitcoin Performance and Market Context

Bitcoin was trading at $87,944.77 at the time of reporting, according to CoinGecko data. The cryptocurrency has experienced increased volatility in recent months.

The price represents a 0.2% drop in the past 24 hours. Over the past three months, Bitcoin has fallen 22.1% from its previous levels.

Dalio’s comments come as crypto markets continue pushing for mainstream acceptance. Spot Bitcoin ETFs and institutional custody services have brought digital assets into traditional investment portfolios.

Stablecoins and Fiat Currency Views

The investor also discussed stablecoins during the interview. He described them as poor tools for holding wealth because they track fiat currencies and typically do not pay interest.

Dalio remains bearish on fiat currencies overall. He said persistent debt and money printing continue to reduce their value over time.

This bearish view on government-issued money explains why he still holds some Bitcoin. However, he made clear that Bitcoin plays a minor role compared to gold in his investment strategy.

Dalio last year encouraged investors to favor gold and Bitcoin while avoiding debt assets. He has consistently stated that if forced to choose between the two, he would pick gold.

The investor’s position highlights ongoing debate about Bitcoin’s role in the global financial system. Central banks have largely avoided adding Bitcoin to their reserves despite growing interest from private investors.

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