Ray Dalio believes nations will outlaw Bitcoin if BTC value retains rising

Ray Dalio, the billionaire hedge fund legend, doesn’t see digital currencies like Bitcoin (BTC) succeeding the best way different individuals do. He expects authorities to clamp down on cryptocurrencies once they see “materials” progress.

In the meantime, BTC has massively outperformed Bridgewater year-to-date. Barry Silbert, the CEO of Grayscale, a cryptocurrency funding agency with over $9 billion in property below administration, mentioned:

“YTD returns: Bridgewater Pure Alpha II Fund: -18% Bitcoin: +115%.”

Bitcoin and Bridgewater can’t be instantly in contrast, in fact. The previous is a decentralized, digital forex with a market cap of $291 billion. The latter is a hedge fund that manages $148 billion in property below administration as of September 2020.

Nonetheless, the distinction in efficiency reveals Bitcoin has much more risk-reward potential, significantly as its market capitalization right this moment is barely 2.36% of gold.

Different billionaire buyers present an urge for food for Bitcoin

Finally, Dalio’s skepticism in direction of digital currencies comes all the way down to the regulatory menace in opposition to cryptocurrencies.

If cryptocurrencies see materials progress, Dalio mentioned governments would doubtless ramp up their efforts to limit them, although he didn’t specify at which BTC value threshold governments will begin taking direct motion. He additionally mentioned:

“I don’t suppose digital currencies will achieve the best way individuals hope they’d.”

Dalio’s skepticism has additionally been shared by authorities officers. U.S. President Donald Trump launched a press release relating to Bitcoin in July 2019. On the time, he wrote on Twitter:

“Not a fan of Bitcoin and different Cryptocurrencies, which aren’t cash, and whose worth is extremely risky and primarily based on skinny air.”

Nevertheless, former U.S. President Barack Obama described Bitcoin as a “Swiss checking account,” alluding to the truth that nation-states will not be capable to totally ban one thing that is not solely international but additionally one thing that may be simply secured by people. 

Throughout a keynote on the South by Southwest competition in 2016, referring to cryptocurrencies, former president Barak Obama mentioned:

“Everyone is strolling round with a Swiss checking account of their pocket.”

At its core, Bitcoin is a peer-to-peer software program protocol. Governments may transfer towards limiting using cryptocurrencies by outlawing on and off-ramps into cryptocurrencies. However that may merely make anti-money laundering (AML) initiatives much less sensible as customers will merely go underground or transfer to friendlier jurisdictions.

Moreover, when cryptocurrencies transfer to the gray market and other people begin buying and selling crypto property in a peer-to-peer method, it will get tougher to crack down on illicit exercise.

As such, a robust argument may be made that it’s not in the most effective curiosity of governments to outright ban Bitcoin.