Billionaire investor Ray Dalio admitted on Tuesday that he "may be overlooking something about bitcoin" and still sees many reasons why it cannot serve as a reliable currency.
The world's most popular cryptocurrency climbed above $ 17,000 to a three-year high on Tuesday, as its decline continued. Bitcoin began to rise in October after PayPal announced that it would allow users to buy, sell and hold a token. Crypto bulls have welcomed the adoption of the digital currency by other firms, but Dalio remains skeptical that Bitcoin can serve such a purpose.
First, Bitcoin is “too volatile for traders to use,” the founder of Bridgewater Associates said on Twitter.
The token is also not very good as a store of wealth because its volatility is high and correlates little with the prices of what I need to buy, "he said. Owning bitcoin does nothing to protect purchasing power, Dalio added.
Even if bitcoin becomes successful enough to replace Central Bank currencies, governments will most likely ban the cryptocurrency "and make it too dangerous to use," Dalio wrote in a tweet. Central banks, including the Federal Reserve, are exploring the possibilities of a Central Bank-issued digital currency, but the decentralized nature of bitcoin and other cryptocurrencies has long been criticized as an easy way to Fund illegal activities.
Dalio also doubts that Central banks, institutional investors, businesses, or multinational corporations will ever buy a large number of bitcoins to hold them as a reserve asset.
However, the billionaire investor has told his roughly 515,600 followers that if he is "wrong about these things," he is open to being oversubscribed.
Bitcoin was trading at $ 17,797. 48 as of 12:55 PM et on Tuesday, up 146% year-on-year.