Ray Dalio Rejects Bitcoin’s Safe Haven Narrative, Rejects Gold Comparisons

According to Dalio, there are important differentiating characteristics between bitcoin and gold, and these characteristics are pushing institutions towards the latter.

Billionaire investor and founder of leading hedge fund Bridgewater Associates, Ray Dalio, has once again criticized bitcoin (BTC). This time, Dalio rejected comparisons between cryptocurrency and gold, stripping the digital asset of its safe-haven narrative.

During an interview with All-In Podcast, the Bridgewater founder insisted that BTC has not acted as a safe haven like gold. He admitted that bitcoin had received a lot of attention as a form of money, but faced long-term threats. Dalio’s comments come as financial assets react to geopolitical tensions amid the ongoing crisis between the United States and Iran.

Dalio rejects BTC comparisons with gold

According to Dalio, there are important differentiating characteristics between bitcoin and gold. The first lack of privacy; transactions can be monitored and indirectly controlled by entities. Such qualities, in the billionaire’s opinion, would make central banks and large institutions reluctant to buy and hold it.

On the other hand, these institutions systematically buy and hold gold because the precious metal is widely viewed as a store of value and a hedge against inflation. Dalio emphasized that the precious metal is not an asset to be speculated on, contrary to what most people believe. In fact, he mentioned that gold is the most established form of money and the second largest reserve currency held by central banks.

Additionally, gold does not face the same threats as Bitcoin. Dalio cited growing concerns about the possible effects of quantum computing on the Bitcoin network. So, although it receives a lot of attention, especially from individuals, and is considered an alternative currency, bitcoin still has a relatively small and controlled market compared to gold.

It is worth noting that Dalio has developed something of a love-hate relationship with BTC over the years. Once critical, the investor began adopting cryptocurrency in 2021 and even gained exposure to it. Nevertheless, he believes that gold is the ultimate financial asset and that BTC is nowhere near it.

Gold hit harder by US-Iran conflict

Although Dalio rejected bitcoin’s safe-haven narrative, the digital asset has performed relatively well since the start of the US-Iran conflict. On March 3, the day Dalio made the remarks, gold lost 6% during trading hours, falling from $5,377 to $5,039, according to TradingView data. In contrast, BTC only fell 3.7% over the same period.

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Comparing the price movements of the two assets that day directly calls into question Dalio’s statements, as gold was more affected by the very crisis it is supposed to protect investors against.