Ray Dalio Questions Bitcoin’s Ability to Establish Itself as an Effective Currency Calling It a “Very Poor Alternative to Gold”

By ssaurel | In Bitcoin We Trust | 17 Apr 2023

In a recent interview, Ray Dalio once again questioned the ability of Bitcoin to become an “effective currency.

For Ray Dalio, Bitcoin's price volatility will always be a problem and central banks will not adopt it:

“Bitcoin is neither an effective store hold of wealth nor a medium of exchange so it is not an effective currency. It has a volatility to it that has no relation to practically anything. It's a very, very poor alternative to gold.”

Ray Dalio seems to be pretending to understand that the point of Bitcoin is not whether central banks endorse it or not, but rather that Bitcoin represents the transparent, decentralized, open central bank for the many.

A different concept.

Ray Dalio still believes that governments and central banks have the power to destroy Bitcoin

“They can outlaw Bitcoin. They can regulate it. Central banks and countries pretty much don't want it anyway.”

Ray Dalio finally clarified that in his eyes Bitcoin gets far too much attention compared to its size.

On this last point, there are two things to consider in my opinion.

The first is that Ray Dalio doesn't seem to understand that the attention here is proportional to Bitcoin's potential for the future, not to its current market cap.

The second, which in a sense makes Ray Dalio partly right, is that Bitcoin at its current market cap is not an immediate threat to the current financial system, as the powerful people at the head of the current system would have us believe.

It is not Bitcoin with its $600B market cap that puts the current system at risk of collapse contrary to what people like Christine Lagarde, Janet Yellen, or Elizabeth Warren may say.

In the past, Ray Dalio has explained that “Bitcoin is one hell of an invention.” He does not deny himself but still thinks that Bitcoin will not be able to accomplish what Bitcoiners envision in the future.

An opponent of Bitcoin who has the merit of giving more measured and thoughtful arguments than Warren Buffett and his friends.

On the other end of the spectrum, you have a far-sighted person like Cathie Wood, CEO of Ark Invest, who does a good job of highlighting why Bitcoin has performed so well since the beginning of 2023 and even more so since the banking crisis in America began:

“Why have Bitcoin and other crypto assets appreciated during this banking crisis? In our view and in contrast to those in the traditional financial world, many crypto assets face no central points of failure: they are decentralized, transparent, and auditable.”

The three keywords are :

Decentralized | Transparent | Auditable

Bitcoin perfectly implements these three principles, which are likely to restore people's confidence in a monetary system.

Because the current system is the complete opposite of that. It is impossible for a private individual, for example, to audit the current system. It is a system that is too complex and opaque, which acts to the detriment of the people and not for the people.

"The Simple Reason Why Bitcoin Will Always Be a More Trusted System Than the Current Monetary and Financial System"

Bitcoin’s motto is thus the opposite of the Fed's motto: “Don't Trust, Verify.”

In the end, only time will tell whether Ray Dalio's misgivings were justified or not and whether Cathie Wood's bet on the future success of Bitcoin was the right one.

For my part, I already have my idea, but we'll have to wait and see.

This post has been published as an NFT.

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ssaurel Verified Member

Entrepreneur / Developer / Blogger / Author.

In Bitcoin We Trust
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