Nikolas Sargeant
Prominent American investor Ray Dalio has sharpened his long-held skepticism regarding Bitcoin's role in the global financial system, arguing that despite its scarcity and monetary characteristics, the cryptocurrency remains fundamentally unsuited for central bank balance sheets due to traceability concerns and vulnerability to government interference.
In a recent interview with entrepreneur Nikhil Kamath, Dalio acknowledged Bitcoin's monetary properties while drawing a clear distinction between individual investment appeal and reserve asset suitability. "Bitcoin is limited in supply and its perception of money. It is a form of money," he stated, while outlining several obstacles he believes prevent central banks from treating it as reserve-grade holdings.
Dalio argued Bitcoin's blockchain transparency creates a vulnerability that reserve managers struggle to accept, since public transactions can be traced and potentially interrupted by authorities. He contrasted this with gold, which he described as harder for governments to control once held outside traditional banking systems, making it more attractive for institutions seeking assets beyond state reach.
He extended his critique with security considerations, raising concerns that Bitcoin could be compromised, broken through cryptographic advances, or subjected to regulatory control. These scenarios, Dalio suggested, fundamentally shape how he evaluates the asset as a long-term store of wealth compared to alternatives with longer track records of government resistance.
Dalio last year encouraged investors to favor gold and Bitcoin while avoiding debt assets as major economies grapple with rising indebtedness levels. He has consistently shown preference for both assets as hedges against monetary debasement, but has repeatedly stated that if forced to choose between them, he would select gold.
The billionaire investor reiterated he maintains some Bitcoin exposure while ranking it behind gold in his personal hierarchy of hard assets. "I have a little bit of Bitcoin," he confirmed, adding that he still finds it less attractive than gold for the reasons he outlined around traceability and interference risk from state actors.
Dalio also expressed skepticism toward stablecoins as wealth-holding instruments, noting they track the fiat currencies they are pegged to and typically do not generate interest income for holders. "A stablecoin is attached to the fiat currency," Dalio said, describing their primary function as transactional infrastructure rather than long-term reserve assets suitable for wealth preservation.
For Dalio, stablecoins serve best where transaction speed and convenience matter most. "It's used largely for immediate, quick transactions," he stated, while stopping short of endorsing them as stores of value comparable to scarce physical assets or even Bitcoin itself.
The comments arrive as cryptocurrency markets continue pursuing mainstream legitimacy through spot Bitcoin exchange-traded funds and institutional custody solutions that have pushed digital assets deeper into traditional investment portfolios. Major financial institutions including BlackRock, Fidelity, and Franklin Templeton have launched Bitcoin ETFs, while custody providers like Coinbase and BitGo serve institutional clients managing billions in digital assets.
Despite this institutional adoption trajectory, Dalio's message to cryptocurrency investors remains straightforward: he recognizes Bitcoin as a form of money with genuine scarcity value, but views gold as the superior hedge when the objective is insulation from state control and preservation of wealth across extended timeframes during periods of monetary instability.
