Why Bitcoin Will Never Surpass The Market Cap Of Gold

Bitcoin has been pitted against gold at various turns since the digital asset started going mainstream. Enthusiasts have finally settled on referring to the former as ‘digital gold’ while continuing to push that bitcoin will replace gold as the default store of value in the coming years. However, not all bitcoin supporters seem to share this school of thought despite the asset’s growth.

Billionaire Ray Dalio is a supporter of bitcoin and has been vocal about his support for the digital asset at various times in the past, but it seems that Dalio does not believe that bitcoin will replace gold. In a recent podcast episode with Lex Fridman, the billionaire investor shares some insight into both assets and why he believes bitcoin cannot surpass gold in terms of market cap.

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$1 Million Bitcoin Is Impossible

Talking to Fridman, the billionaire laid out his reasons why bitcoin will be unable to replace gold. He points to the traceability of bitcoin and compared this to gold which he says is untraceable as it is not connected. Furthermore, gold is a universally recognized store of value while only a small percentage of the world is estimated to use bitcoin as an investment and a store of value.

He explains that gold still maintains the lead ahead of bitcoin which he does not yet believe will become the apex or the universally accepted form of money. Gold, for one, has been around for thousands of years and is still an accepted form of money or store of value.

Bitcoin price chart from TradingView.com

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For the reasons that he outlined, Dalio does not believe that bitcoin will ever be able to surpass gold. Furthermore, he explains that he does not believe that bitcoin will reach the price page of $1 million which some bitcoin maximalists have pushed in recent times.

Still A Strong Contender For Gold

Dalio did not completely dismiss how valuable bitcoin is though. The billionaire lauded bitcoin by proclaiming that the digital asset has proved itself despite not being able to serve as a currency due to its volatility. The digital asset has proven to be a safe way to invest as it has never been hacked and continues to operate according to its original programming.

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“It has proven itself. It has not been hacked, it has operated in an amazing way over that 11 years to be probably the most exciting topic among a lot of people,” said Dalio. ”It has been used and is now obtained the status of having imputed value.”

The billionaire also revealed that bitcoin ranked highly on his list of assets that he considers to be strong competitors for gold. He still maintains that gold is still his favorite investment but has not written off bitcoin from the running either. A few months ago, Dalio had revealed that he held a small portion of holdings in bitcoin, and had added ethereum to his stash too.

Featured image from Bitcoin News, chart from TradingView.com


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Billionaire Ray Dalio Explains Why He Owns Bitcoin And Ethereum

Billionaire Ray Dalio has revealed that he holds bitcoin and ethereum holdings. Various billionaires have also been public about their bitcoin and ethereum holdings. For a lot of these billionaires, the move from cash into cryptocurrencies has been a pertinent one as the former continues to lose its value in the market. Dalio also gave this as a reason for holding the cryptocurrencies.

Growing concerns about the value of cash as an investment have seen both institutional and individual investors move their holdings into cryptocurrencies. Coupled with rising inflation rates, diversifying into cryptocurrencies like bitcoin and ethereum has become more popular.

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Dalio Owns Bitcoin And Ethereum

Billionaire Ray Dalio sat down with Yahoo! Finance to talk about the financial market and how one can be successful in it. Talking with host Andy Serwer, Dalio confirmed once again that he owned bitcoin but this time around, the billionaire revealed that he had added ethereum to his holdings. This was in response to a direct question from Serwer about the billonaire’s crypto holdings.

Bitcoin price chart from TradingView.com

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Dalio declined to give a precise amount of bitcoin that he owned, which is understandable, but explained that he did not own a lot of either bitcoin or ethereum. As for the reason behind holding these cryptocurrencies, Dalio explained that it was because he viewed it as an alternative to cash. “I view it as an alternative money in an environment where the value of cash money is depreciating in real terms,” said the billionaire.

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Diversification Is Key

For Dalio, buying into bitcoin and ethereum is also a diversification play. During the interview, the billionaire hedge fund manager reiterated that investing in cash is the worst investment there is. This is because cash loses buying power and as such, the longer one holds cash, the lesser the buying power of that cash. He urged investors to not “judge anything in your returns or your assets in nominal terms, in terms of how many dollars you have. View it in terms of inflation-adjusted dollars.”

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Dalio stresses that it is important for investors to always diversify their portfolio and that is what he has done with his crypto investments, even though it is still a relatively small part of that portfolio.

“The important thing is to diversify one’s portfolio well. Because we know from the surprises in the balance– we also know that those asset classes on average significantly outperform and will significantly outperform cash.”

The billionaire concluded by saying that cash is a “problematic asset.” Therefore, diversification out of this asset is important. “And that diversification should be also international diversification from countries, not just asset classes, in order to have a truly well-diversified portfolio,” Dalio added.

Featured image from CNBC, chart from TradingView.com


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Bitcoin (BTC) $ 39,450.57 1.64%
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