Ray Dalio chose an interesting week to trash bitcoin.
The Bridgewater Associates founder said on the popular All-In Podcast on Tuesday that investors should stop comparing bitcoin to gold, arguing that the biggest cryptocurrency lacks central bank backing, has no privacy and faces long-term threats from quantum computers.
“There is only one gold,” Dalio said. “Gold is the most established money” and the second largest reserve currency in the central banks.
However, the timing undermined the thesis. On the day Dalio made these comments, gold fell $168 to $5,128, down 3%, while bitcoin fell just 0.7% to $68,700. Five days into the war between the US and Iran, the asset that Dalio favors was hit harder by exactly the kind of crisis he says it is supposed to protect against.
The decoupling is not new. Bitcoin and gold moved together from July to early October until the broader crypto crash in October wiped out $20 billion in leveraged positions. Since then, the two assets have gone in separate directions. Bitcoin is down over 45% from its peak in October. Gold rose 30% to over $5,100 in the same period.
Gold rallied during Saturday’s initial strikes, then gave back those gains as the conflict widened and oil disruptions became the dominant concern. Bitcoin sold off on Saturday, rebounded on Sunday after the death of Iran’s Supreme Leader Khamenei, declined to $70,000 on Tuesday and has since settled in the mid-$67,000s.
It shows that none of the assets have fully acted as a safe haven this week. Both have been unstable. Bitcoin has just been less volatile, which is not the outcome Dalio’s framework predicts.
Nor is Dalio’s specific criticism new. He highlighted bitcoin’s transparency, noting that “every transaction can be monitored and directly, perhaps, controlled.” He questioned whether central banks would ever accumulate an asset running on a public ledger. And he raised quantum computers as a long-term existential risk.
He is not entirely bearish. Dalio holds about 1% of his portfolio in bitcoin for diversification and recommended a 15% allocation to bitcoin or gold in July, calling it the “best return-to-risk ratio” given the US debt trajectory.
Dalio warned last month that the “world order” led by the United States was “broken down” and that investors needed to rethink how they protect wealth. Whether gold is still the only prescription is the part the market is actively debating, and this week’s price action hasn’t made his case any easier to make.
