Governments to ‘ban’ Bitcoin, says Bridgewater’s Ray Dalio

Bitcoin is not a good alternative asset because governments will end up banning it, according to billionaire investor Ray Dalio.

The largest cryptocurrency by market cap is also problematic due to its volatility and inability to spend it on everyday goods, Dalio said in a interview with Yahoo Finance during the weekend.

Dalio, who runs the world’s largest hedge fund, Bridgewater Associates, said in the interview that he instead expects the world to increasingly turn to central bank digital currencies, such as the digitized US dollar, euro or renminbi.

“Theoretically, [Bitcoin] that’s fine, but there are three basic things: a currency has to be an efficient medium of exchange, a store of wealth, and governments want to control it, ”said Dalio, highlighting the problems with Bitcoin. “Today, I still can’t take my bitcoin and buy things easily with it.”

Dalio also said that Bitcoin is “so volatile” preventing it from being useful as a store of wealth. He then added that governments would end up ‘banning’ Bitcoin.

“And they go [governments] use whatever teeth they have to enforce that, they’ll say you can’t trade a Bitcoin, you can’t have it, ”he said. “So you should be like, is this a crime, am I going to be a criminal?” They banned gold.

“I wouldn’t prefer Bitcoin to gold.”

This is not the first time that Dalio has criticized Bitcoin and praised gold. In January, the the investor said the cryptocurrency is too volatile– but said everyone should have gold in their wallet. He has also shown interest in Facebook’s Libra.

His comments come at a time when institutional investors are show more interest in cryptocurrency – which is partly responsible for the Bitcoin price explosion, according to market analysts.

The key to Dalio’s success for a successful portfolio, he told Yahoo Finance, is to “diversify, diversify, diversify”. Obviously, however, this diversity does not necessarily extend to Bitcoin, according to the billionaire investor.