Ray Dalio picked an interesting week to dump bitcoin.
The founder of Bridgewater Associates said Tuesday on the popular All-In Podcast that investors should stop comparing bitcoin to gold, arguing that the largest cryptocurrency lacks central bank support, has no privacy and faces long-term threats from quantum computing.
“There’s only one gold,” Dalio said. “Gold is the most established money” and the second reserve currency held by central banks.
However, the timing undermined the thesis. On the day Dalio made those comments, gold fell $168 to $5,128, a 3% drop, while bitcoin fell just 0.7% to $68,700. Five days into the U.S.-Iran war, Dalio’s preferred asset was hit harder by exactly the kind of crisis he says it’s supposed to protect against.
Decoupling is not new. Bitcoin and gold moved together from July to early October, until the broader cryptocurrency crash in October wiped out $20 billion in leveraged positions. Since then, the two assets have gone in opposite directions. Bitcoin is down more than 45% since its October peak. Gold rose 30% to over $5,100 in the same period.
Gold soared on Saturday’s initial attacks, but then lost those gains as the conflict widened and oil disruption became the dominant concern. Bitcoin sold off on Saturday, rebounded on Sunday after the death of Iran’s Supreme Leader Khamenei, was rejected at $70,000 on Tuesday, and has since settled at around $67,000.
That shows that none of the assets have fully functioned as safe havens this week. Both have been volatile. Bitcoin has simply been less volatile, which is not the outcome Dalio’s framework predicts.
Dalio’s specific criticisms are not new either. He highlighted bitcoin’s transparency, noting that “any transaction can be monitored and, perhaps, controlled directly.” He questioned whether central banks would ever accumulate an asset listed on a public ledger. And he raised quantum computing as a long-term existential risk.
It’s not entirely bearish. Dalio has about 1% of his portfolio in bitcoin for diversification and recommended a 15% allocation to bitcoin or gold in July, calling it the “best risk-return ratio” given the U.S. debt trajectory.
Dalio warned last month that the US-led “world order” had been “broken” and that investors needed to rethink how they protect wealth. Whether gold remains the only recipe is the part the market is actively debating, and this week’s price action hasn’t made its case any easier to make.
