Bridgewater Fund's Ray Dalio: Bitcoin is inferior to gold, Central Banks will not choose it.

Ray Dalio, the founder of the world's largest hedging fund Bridgewater Associates, once again discussed the comparison between Bitcoin and gold. He admitted to holding a small amount of Bitcoin, but pointed out the structural flaws in Bitcoin, stating that it is less reliable than gold and is more difficult to become the preferred reserve asset for central banks. (Previous summary: Bridgewater's Dalio: My Bitcoin holding ratio has remained unchanged! Stablecoins are “not cost-effective” for preserving wealth) (Background Supplement: Bridgewater's Dalio Calls Dollar Decline “Gold Is Indeed Safer”: I Feel the Market Has Become Bubbly)

Ray Dalio, the founder of the globally renowned hedge fund Bridgewater Associates, recently discussed his views on Bitcoin during an interview on the podcast “WTF is Finance” hosted by Nikhil Kamath, the founder of the Indian online brokerage Zerodha.

He clearly stated that he personally holds a small amount of Bitcoin, accounting for about 1% of his investment portfolio, which is consistent with his publicly disclosed position multiple times in the past. Dalio acknowledged that Bitcoin has a limited supply and is gradually being viewed as a store of value, possessing the characteristics of a “currency.”

Bitcoin is not as good as gold

However, Dalio also pointed out that Bitcoin has some structural problems. First, the blockchain transaction records of Bitcoin are highly transparent. Although all transactions are recorded in a pseudonymous manner, government agencies can easily track wallet addresses and transaction processes, which may lead to government monitoring or intervention in transactions. Second, he is concerned about the technical security risks of Bitcoin, such as the possibility that future quantum computing could break encryption mechanisms, or the emergence of alternatives like “synthetic Bitcoin,” which could undermine its uniqueness and reliability.

These issues make Bitcoin appear more vulnerable in the face of government regulation or technological change. Therefore, Dalio believes that Bitcoin is less attractive than gold, particularly lacking the conditions to become a reserve asset for various Central Banks. Dalio explains that Central Banks tend to prefer gold when choosing reserve assets because gold is a tangible asset that, once held, is difficult for the government to directly monitor, intervene, or confiscate. In contrast, the digital nature of Bitcoin makes it more susceptible to external influences.

Dalio himself prefers gold, viewing it as a high-quality hard asset and a store of value to hedge against the devaluation risk of fiat currency. Dalio's remarks continue his consistent cautious attitude; while he acknowledges Bitcoin's role as a decentralized investment, he always prioritizes gold when choosing between the two.