Billionaire Hedge Fund Manager Scares Bitcoin Market With Ban Warning

Ray Dalio of Bridgewater Associates — the world’s largest hedge fund, said Bitcoin could become the next gold insomuch that it may get outlawed.

The founder predicted the eerie outcome in an interview with Andy Serwer, Yahoo Finance’s editor-in-chief, as institutional interest in Bitcoin continued to climb against the prospects of higher inflation and devaluated fiat currencies.

In “The Changing World Order”, a book authored by Mr. Dalio, the billionaire investor cites the US government’s response to the gold’s rising popularity in the 1930s. Back then, authorities banned the individual ownership of gold because they didn’t want the US dollar to lose its importance as a store of value.

Therefore, Mr. Dalio put Bitcoin in similar positions, saying that after its prices surged against ultra-low interest rates, stimulus packages, and amid investors’ hunt for alternative hedging assets, which makes it a threat to the US dollar’s hegemony, the same way gold did in yesteryears.

So in Mr. Dalio’s words:

“I think that it would be very likely that you will have it (Bitcoin), under a certain set of circumstances, outlawed the way [individual ownership of] gold was outlawed.”

Bitcoin Rising Popularity is Its Own Enemy

Mr. Dalio, a prominent Bitcoin supporter who deems it as an alternative gold-like asset, wrote that the cryptocurrency remains unhackable so far. It has built an amazing following, and has emerged as a true store-of-value asset — a form of “digital cash.” 

But Mr. Dalio remained unsure if the bitcoin wallets can maintain users’ privacy in light of various governments planning to impose a ban on cryptocurrencies.

The billionaire philanthropist gave the example of the Indian government mulling over the decision of banning cryptocurrencies. He said that while he is not an expert, after talking to people who are in government surveillance, he understands that governments and cyber police could track bitcoin and find out entities that possess them.

In his March 15 essay “Why in the World Would You Own Bonds When…”, Mr. Dalio said that policymakers would not like their citizens circumventing taxes by seeking safety in cryptocurrencies like Bitcoin. 

Therefore, the US government may target those opting for Bitcoin over the dollar.

Mr. Dalio’s comments coincided with an ongoing, deepening correction of Bitcoin prices, which saw its market cap fall below $1 trillion and prices plunging by 12.5 percent from their all-time high. At the time of writing, Bitcoin trades at $52,567.