Can Bitcoin become alternative money? Ray Dalio gives 2 reason why it may not

American billionaire and hedge fund manager Ray Dalio said that he doubts if any central bank will take Bitcoin as a reserve currency. He mentions two reasons behind his reservations -- one is the absence of privacy as all the transactions are public and the other is the likelihood of BTC becoming less effective through government controls.

Dalio expressed his view in a tweet though it was said in response to a question if BTC is a legitimate currency to hold. The question was asked to him in a podcast 'The Master Investor'.

"I can’t say exactly how effective Bitcoin is as a money, but it’s being perceived by many as an alternative money and so is worth paying attention to. Money needs to be both a medium of exchange and a storehold of wealth — and the latter is more important. I doubt that any central bank will take it on as a reserve currency. That’s because all of the transactions are public, so there’s no privacy to it, and there’s a risk that in the future the code could be broken to make it less effective through government controls," Dalio said.


Dalio said that he too has some Bitcoin in his portfolio, though not much. "My personal approach is that I do have some Bitcoin in my portfolio, but not much," Dalio said.


Dalio is the founder of Bridgewater Associates, a premier asset management firm in the US. He has authored several books, including 'Principles', 'The Changing World Order', and 'How Countries Go Broke'.

The world's largest cryptocurrency by market value Bitcoin on Sunday surged to an all-month high of $125,000, riding on continuous inflows into the ETFs amid the official US government shutdown. Down from the peak, it was last trading around $123,901.25, up 0.63%.

Also Read: Investment TIPS: Why Ray Dalio prefers inflation-protected govt bonds over zero-sum game equities?

Analysts are of the view that this strong rally reflects growing investor appetite for hedge assets such as Bitcoin and gold amid heightened macroeconomic uncertainty. Meanwhile, the US dollar is on the slide, posting multi-week losses against major currencies, as uncertainty surrounding a US government shutdown clouded the outlook and delayed key data releases, such as payrolls, critical for gauging the economy's direction.

Citigroup recently raised its year-end price target for ether to $4,500 from $4,300, citing strong flows from ETFs and digital asset treasuries.

The brokerage trimmed its bitcoin forecast to $133,000 from $135,000, pointing to offsetting macro factors, including a stronger dollar and weaker gold prices.

Citi sees continued upside next year, with a 12-month target of $5,440 for ether and $181,000 for bitcoin.

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