The world’s top cryptocurrency, bitcoin, is enjoying its moment in the sun, but could soon face major resistance by governments looking to rein in the decentralized currency, says the founder of Bridgewater Associates Ray Dalio.
“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,” Dalio told Yahoo Finance. “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.”
He referenced a controversial 1934 act, signed by President Franklin D. Roosevelt, that ended all private holding and use of gold as money. The act also established the exchange stabilization fund as a reserve to stabilize the US dollar after the government abandoned the gold standard.
According to the veteran investor, the list of bitcoin’s positive attributes includes its growing following, its security, and the ability to serve as an alternative asset and potentially a store of value. “Bitcoin has proven itself over the last 10 years. … It’s by and large worked on an operational basis. … Those are the pluses,” he explained.
However, Dalio characterized bitcoin as a potential threat to government control of banking and money supply systems, “because things can get out of control.”
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