{"id":15327,"date":"2021-08-04T17:54:28","date_gmt":"2021-08-04T17:54:28","guid":{"rendered":"http:\/\/ci0289d8c4500025a3"},"modified":"2021-08-04T17:54:28","modified_gmt":"2021-08-04T17:54:28","slug":"ray-dalio-still-wrong-about-bitcoin","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/business\/ray-dalio-still-wrong-about-bitcoin","title":{"rendered":"Ray Dalio Still Prefers Gold Over Bitcoin: Here\u2019s Why He\u2019s Wrong"},"content":{"rendered":"
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Ray Dalio, co-chief investment officer of Bridgewater Associates, one of the world\u2019s largest hedge funds, owns some Bitcoin, but in an interview<\/a> with CNBC <\/em>today he demonstrated that he doesn\u2019t understand or believe in it as a superior store of value to gold. <\/p>\n

\u201cIf you put a gun to my head, and you said, \u2018I can only have one,\u2019\u201d Dalio said in the interview, \u201cI would choose gold.\u201d<\/p>\n

After years of brushing off and actively doubting Bitcoin<\/a>, the 72-year-old revealed in May that he owns an undisclosed amount of it:<\/p>\n

\u201cI own a very small amount of bitcoin. I\u2019m not a big owner,\u201d Dalio told CNBC. He went on to explain Bitcoin as an asset \u201cthat you want to own to diversify the portfolio.\u201d In the same breath he noted that \u201cbitcoin is something like a digital gold.\u201d<\/p>\n

Despite Dalio\u2019s comparison of Bitcoin to digital gold, over that last year, Bridgewater invested more than $400 million into gold, which has long been considered a store of value.<\/p>\n

According to CNBC, in 2019 Dalio wrote on LinkedIn that \u201cadding gold can help balance one\u2019s portfolio because it is both risk-reducing and return-enhancing.\u201d<\/p>\n

Notably, Dalio told Coindesk<\/a> last spring that if forced to choose between gold and Bitcoin, he would pick gold because of its history as a \u201cstorehold of wealth\u201d. <\/p>\n

Why He\u2019s Wrong<\/h2>\n

While gold has historically been a hedge against fiat inflation, bitcoiners believe that Bitcoin has subsumed gold in its functions, virtues and necessity. <\/p>\n

Bitcoin is more salable across space, time, and scale than gold. The issuance of Bitcoin will stop at 21 million coins, whereas gold will be mined until none exists anywhere in the universe. The only thing limiting the inflation of the gold supply is the amount of resources we devote to the task of mining it, and on that front, we\u2019ve barely scratched the surface of the earth. <\/p>\n

One explanation for Dalio holding gold over Bitcoin as a store of value is a misguided belief that Bitcoin will be simply outlawed by the U.S. government. Bitcoin as a network and a currency, however, is resistant to government capture, unlike gold. <\/p>\n

Indeed, as we have seen over and over again in China<\/a> and India, Bitcoin can be regulated, but it cannot be stopped. Governments have no control over the protocol, and no power to halt, alter or confiscate Bitcoin transactions. <\/p>\n

At the same time, the physical nature of gold, and the impracticality of storing it safely makes it easily confiscatable by third parties and governments alike. Note that all standard Good Delivery Gold Bars must be held in third party custody to be recognized as valid, and the vast majority of investors\u2019 gold is held in banks. <\/p>\n

For now, Dalio just doesn\u2019t see Bitcoin as a store of value, which is arguably its strongest and one of its most obvious virtues:<\/p>\n

\u201cI just think of it as diversification,\u201d he said. <\/p>\n","protected":false},"excerpt":{"rendered":"

Ray Dalio, co-chief investment officer of Bridgewater Associates, one of the world\u2019s largest hedge funds, owns some Bitcoin, but in an interview with CNBC today he demonstrated that he doesn\u2019t understand or believe in it as a superior store of value to gold.<\/p>\n","protected":false},"author":2936,"featured_media":15328,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-15327","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"author_data":{"id":2936,"name":"Alex Mcshane","nicename":"bitcoin-journalist-alex-mcshane","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/3dd6bbed938cbadeed734dfff7b3964c2a43e2784e2d9ead80b8d5476f8209f1?s=96&d=robohash&r=g"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/web_summit_2018_-_centre_stage_-_day_2_november_7_dsc_5234_30828439497-scaled.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/15327","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2936"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=15327"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/15327\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/15328"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=15327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=15327"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=15327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}