Ray Dalio expressed renewed skepticism about Bitcoin’s status as a safe-haven asset on Tuesday, stating that it still doesn’t measure up to gold in terms of privacy, suitability for institutions, and market structure. During a March 3 appearance on the All-In podcast, the billionaire hedge fund founder suggested these shortcomings help explain why Bitcoin hasn’t mirrored gold’s performance in the current economic cycle.
When asked why Bitcoin has underperformed while gold has risen, Dalio first pointed to issues of surveillance and control. “Bitcoin does not have privacy. Any transactions can be monitored and then indirectly perhaps controlled,” he said. He connected this to adoption by governments and central banks, noting, “Central banks are not going to want to buy bitcoin and be able to hold it. So, it’s not just individuals, it’s institutions and so on.”
Dalio’s comments were part of a broader discussion about debt stress, currency devaluation, and the search for politically neutral reserve assets. In this context, he views gold as the standard—not a speculative commodity, but “the most established money” and “the second largest reserve currency that central banks hold.” He emphasized gold’s value stems from its transferability, scarcity, and the fact that it isn’t a liability issued by someone else.
In contrast, Dalio highlighted several concerns with Bitcoin beyond privacy, including technological uncertainties like quantum computing and the composition of its investor base. “And then there’s who owns it and what are the other exposures that they have in their portfolio? It tends to have a pretty high correlation with the tech stocks,” he noted.
This led to his core criticism: while Bitcoin is theoretically an alternative monetary asset, in practice it still behaves like a risk asset. He argued that Bitcoin’s supply and demand are influenced by portfolio pressures in ways that gold’s are not, calling Bitcoin “a relatively small market” and therefore “a relatively controllable market.”
Bitcoin Community Reacts
Dalio’s remarks quickly sparked responses from Bitcoin supporters on X, focusing less on his macroeconomic perspective and more on whether he underestimates Bitcoin’s long-term potential.
Investor Vijay Boyapati contended that Dalio “doesn’t fully understand why central banks own gold,” suggesting they hold it partly as a hedge against gold competing with sovereign currencies. “Once Bitcoin achieves the same scale as gold… central banks will be forced to own it for the same reason they own gold. Without ownership their national currency becomes vulnerable to a speculative attack from Bitcoin,” he added.
Bitwise CIO Matt Hougan offered a market-focused view: “Some hear criticism; I hear opportunity. These are the reasons bitcoin is 4% of the size of gold. If these critiques did not exist, bitcoin would already be ~$750,000/coin. I invest in bitcoin in part because I am confident these things will change over time.”
Abra CEO Bill Barhydt argued that Bitcoin’s volatility and smaller market size are characteristics of a younger monetary asset, not flaws, and also downplayed the immediate threat from quantum computing.I greatly admire people like Friedberg and Ray Dalio, both as fellow libertarians and as macro experts I try to learn from. The conversation in the video is about Bitcoin, but I’ve extended it to compare Bitcoin and gold. Note that…
Zcash founder Zooko Wilcox, meanwhile, responded with a one-line jab: “I’m looking forward to Ray Dalio finding out about Zcash.”
At press time, BTC was trading at $69,660.
Frequently Asked Questions
FAQs Ray Dalios Bitcoin Criticisms
BeginnerLevel Questions
Q1 Who is Ray Dalio and why should I care about his opinion on Bitcoin
A1 Ray Dalio is the founder of Bridgewater Associates one of the worlds largest hedge funds Hes a highly influential investor so his views on major assets like Bitcoin are closely watched by the financial world
Q2 What are the main things Ray Dalio criticizes about Bitcoin
A2 He primarily highlights three concerns 1 Its potential use for illegal activities due to privacy features 2 The risk of government control or banning and 3 The future threat posed by quantum computers breaking its cryptography
Q3 What does privacy concern mean in this context Isnt Bitcoin public
A3 While Bitcoin transactions are recorded on a public ledger users are represented by alphanumeric addresses not names Dalio worries this pseudonymity can facilitate crime tax evasion and activities that threaten government control over money
Q4 What is the government control issue he mentions
A4 Dalio believes governments will not tolerate a competing currency they cannot regulate or tax effectively He argues they have the power to restrict or ban its use which could severely impact Bitcoins value and adoption
Q5 What is a quantum computing threat and is it real
A5 Quantum computers are a new powerful type of computer that could in theory break the cryptographic codes that secure Bitcoin wallets Experts agree its a longterm threat but the Bitcoin community is already researching quantumresistant solutions
Advanced Practical Questions
Q6 How do Dalios criticisms compare to common critiques from other traditional finance figures
A6 His concerns align with many in traditional finance but are notable for their specific focus on systemic threatsgovernment power and technological obsolescencerather than just shortterm price swings
Q7 Hasnt Bitcoin been used for illegal purposes already How is this different from cash
A7 Yes it has like any form of money Critics argue its digital and crossborder nature makes it uniquely suited for crime Proponents counter that blockchain analysis makes it more traceable