Digital Assets: Bitcoin Could Be Outlawed, Says Ray Dalio
Dalio is the billionaire founder of Bridgewater Associates, the $150 billion hedge fund that is the world’s largest.
History could repeat itself and bitcoin could be done in by a governmental crackdown similar to the one on gold when the U.S. government made it illegal for individuals to own the precious metal. Speaking to Yahoo Finance Editor-in-Chief Andy Serwer in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment, Dalio said there’s a good chance that the leading cryptocurrency could be outlawed. (Yahoo Finance)
Gold could have the last laugh
“Every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing, because things can get out of control. So I think that it would be very likely that you will have it under a certain set of circumstances outlawed the way gold was outlawed,” said Dalio.
Dalio was referring to the Gold Reserve Act of 1934 which made it illegal for individuals to own gold. The rationale for the law? “Government leaders didn’t want gold to compete with money and credit as a store hold of wealth.”
Gold has fared as bitcoin’s poor cousin in recent months, hammered by investors rotating out to the hot new cryptocurrency amidst bullish news of widespread adoption by corporate treasuries and institutions.
Meanwhile, regulatory powers have kept up a stream of negative bitcoin-speak.
Bitcoin roiled by government luminaries
Earlier this week, Fed Chairman Jerome Powell said during a webinar sponsored by the Bank of International Settlements: “Crypto assets are highly volatile — see Bitcoin — and therefore not useful as a store of value. They’re not backed by anything. They’re more of an asset for speculation.”
“It is essentially a substitute for gold rather than the dollar,” he added.
Last month Treasury Secretary Janet Yellen said at a New York Times DealBook conference: “I don’t think that bitcoin … is widely used as a transaction mechanism. To the extent it is used, I fear it’s often for illicit finance. It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”
India leading the way?
To buttress his apprehensions Dalio pointed to India’s looming law to ban cryptocurrencies.
“[We] have to see what that means,” the hedge fund manager added.
A Reuters report said earlier this month that India will propose a law banning cryptocurrencies, fining anyone trading in the country, or even holding such digital assets, quoting a senior government official.
The purported motive for such a move: to ban private virtual currencies such as bitcoin while building a framework for an official digital currency.
Related Story: India Plans To Criminalize Crypto-Assets (Reuters)
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