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Billionaire Ray Dalio is pessimistic about BTC’s future. In a recent interview with Yahoo Finance, Dalio was asked: “Do you have a vision of digital currencies?” To which Dalio expressed his concerns about BTC and his belief that we will see more central bank digital currencies in the future.
Dalio said he has three reasons that lead him to believe that BTC will not “be successful in the way that people hope …”
“A currency must be an effective medium of exchange, store wealth and governments want to control it,” Dalio said, before continuing to explain why BTC doesn’t fit into any of these boxes.
“Today I can’t take my BTC and go and buy things easily with it. Being a deposit of wealth, it is so volatile that its speculation-based volatility is so great that it isn’t an effective store of wealth; which is also one of the reasons why it has a problem being a vehicle of transaction … Third, if it becomes material, governments will not allow it, they will outlaw it, they will use all their teeth to enforce it. “
BTC will not be successful.
Many BTC supporters believe that BTC will continue to replace fiat currency altogether, or that BTC is the new gold. However, BTC will not replacing fiat currency and calling BTC “digital gold” is a stretch.
Dalio is right when he says that the government is disgusted with everything it has no hand in. With no way to control and enforce financial policies, you won’t see any government adopting BTC as their national currency.
Furthermore, BTC is too volatile to be used as a medium of exchange, not to mention the throughput issues the network often suffers. increase the average transaction fee at higher prices than it costs to trade in fiat currency. At the time of going to press, the average broadcast rate on the BTC network is $ 7.77.
And although the same economic conditions that benefit gold are benefitl For BTC, the gold market is thousands of years old with a good track record – BTC is not even 15 years old and is generally highly correlated with the S&P 500.
Central bank digital currencies will be successful
“Then there are the digital currencies, let’s say the dollar or the euro or the Chinese renminbi that is digitized, I think we will see a lot more of that,” Dalio said.
Given Dalio’s previous comments on what makes a successful currency, it’s no surprise that he sees the potential for a central bank digital currency. By digitizing fiat currencies on a blockchain, governments around the world can optimize their economies and reduce their costs. Many countries around the world are currently researching, developing and experimenting with their CBDC, with Lebanon being the latest country to announce its plans to launch a CBDC in 2021.
New to Bitcoin? Check out CoinGeek Bitcoin for beginners section, the ultimate resource guide to learn more about Bitcoin, as originally intended by Satoshi Nakamoto, and blockchain.
