Ray Dalio: Bitcoin Unlikely to Become Central Bank Reserve
Ray Dalio has expressed skepticism about Bitcoin's potential to be held as a central bank reserve, citing its traceability and susceptibility to government interference. In an interview with entrepreneur Nikhil Kamath, Dalio described Bitcoin as money in spirit but argued it is not suitable for central bank balance sheets, as central banks remain wary of its vulnerabilities.
Dalio highlighted that Bitcoin's public transaction transparency creates a risk that authorities could exploit or interrupt its operations, unlike gold, which he considers a cleaner hedge against state control. He noted that Bitcoin could be cracked, broken, or controlled, impacting its viability as a long-term store of wealth.
While Dalio has historically favored gold and Bitcoin, he said if forced to choose, he would pick gold, maintaining a small Bitcoin position behind his gold holdings. He also criticized stablecoins, stating they are not suitable stores of wealth and are best used for rapid transactions rather than long-term reserves because they track fiat currencies and offer little to no interest.
The commentary acknowledges that Bitcoin ETFs and institutional custody are facilitating the integration of cryptocurrencies into traditional portfolios. Ultimately, Dalio concluded that Bitcoin is scarce money, but gold remains the preferred protection against government control.
