Billionaire investor Ray Dalio recently took aim in Bitcoin, even though I personally hold major cryptocurrencies.
But while Dalio sees fundamental flaws, Bitwise president Matt Hogan sees a roadmap to a $750,000 valuation.
Privacy, quantum risk, and small markets
During a recent appearance on the All-In podcast, Dalio addressed the growing performance gap between traditional gold and Bitcoin. When asked why Bitcoin is not fulfilling the safe haven role many expected, Dalio pointed to several structural issues.
He pointed to the fundamental lack of financial anonymity as a major headwind: “That’s why Bitcoin has no private transactions that can be monitored and perhaps indirectly controlled.”
Dalio also directly contrasted Bitcoin with traditional reserves, expressing strong skepticism regarding institutional and government adoption.
“Central banks are not going to want anyone buying Bitcoin or holding it. So it’s not just individuals, it’s institutions and so on, but as most people know, central banks as well.”
Additionally, they questioned the long-term security of the network in the face of technological advancements. He said, “I had some questions and thoughts about the development of new technologies such as quantum computing. Are there any issues with that?”
Finally, Dalio argued that the asset is too highly correlated with tech stocks and could be easily manipulated because of its size.
big chance
Matt Hogan, president of Bitwise, argued that it is precisely this kind of criticism that provides major future upside for Bitcoin.
“Some people hear the criticism, but I also see the opportunity. These are the reasons why Bitcoin is 4% of gold. If these criticisms didn’t exist, Bitcoin would already be around $750,000 per coin. One of the reasons I’m investing in Bitcoin is because I believe these conditions will change over time,” Hogan said.
If Bitcoin already offered perfect privacy, had a huge market size, was immune to quantum computing, and was actively hoarded by the world’s central banks, it would have already absorbed gold’s market share.
If Bitcoin reaches parity with gold’s massive market cap, each coin will be worth about $750,000.
