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There could be a repeat of the 1930s ban on gold ownership in the U.S. but for Bitcoin this time.
As Bitcoin and other cryptocurrencies correction deepen, the fear and uncertainty that has been surrounding cryptocurrencies since its invention has returned, with the billionaire hedge fund manager, Ray Dalio adding to it.
According to a report on Cointelegraph, a recent interview with Yahoo Finance's editor-in-chief on March 24, the founder of the $150 billion hedge fund Bridgewater Associates stated that there is a "good probability" that the U.S. government could ban Bitcoin just as it did with gold ownership back in the 1930s.
That happened because government leaders at the time did not want gold to compete with fiat money and credit as a store of wealth, Dalio added.
“They don’t want other monies to be operating or competing because things can get out of control. 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.”
The billionaire hedge fund manager Ray Dalio clarified his views on the world's most famous digital asset back in January with the publication of a short essay titled "What I really Think of Bitcoin".
Dalio said his view on Bitcoin should be read directly to avoid media misinterpretation, and they are both cautious and hopeful. To start with, Dalio acknowledged the technical accomplishments of Bitcoin and praise its ability to last for over a decade already.
“I believe Bitcoin is one hell of an invention. To have invented a new type of money via a system that is programmed into a computer and that has worked for around 10 years and is rapidly gaining popularity as both a type of money and a store hold of wealth is an amazing accomplishment.”
“It seems to me that Bitcoin has succeeded in crossing the line from being a highly speculative idea that could well not be around in short order to probably being around and probably having some value in the future."
With the accomplishment of the digital asset, why would any government want to disrupt the use of Bitcoin? Dalio pointed out that the principles at play now are the exact same as those at play in the 1694, when the newly launched Bank of England sought to solidify its position as the sole issuer of debt and monies within its borders.
“Rather than it being far-fetched that the government would invade the privacy and/or prevent the use of Bitcoin (and its competitors) it seems to me that the more successful it is the more likely these possibilities would be.”
“It is hard for me to imagine that they would allow Bitcoin (or gold) to be an obviously better choice than the money and credit that they are producing. I suspect that Bitcoin’s biggest risk is being successful, because if it’s successful, the government will try to kill it and they have a lot of power to succeed.”
And now that the government of India is planning to ban Bitcoin and cryptocurrency trading in general, Dalio added that he is not an expert but asserted that it can be tracked and the government can work out who is dealing with it.
“Bitcoin has proven itself over the last 10 years, it hasn’t been hacked. It’s by and large, therefore, worked on an operational basis. It has built a significant following. It is an alternative, in a sense, store hold of wealth. It’s like a digital cash. And those are the pluses.”
On March 16, Dalio stated that the U.S. government could target those ditching the dollar for Bitcoin as it becomes “inhospitable to capitalism” in preparation for “shocking” tax changes to tackle the national debt crisis.
The comments come as Bitcoin’s correction continues to deepen as signs that the bull market is entering its latter stages have emerged on-chain. BTC has corrected by 15% from its all-time high of $61,700, to current prices of around $51,600.
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Tobi is a full time day/swing trader with 3 years’ experience in the currency and commodity market. He is interested in cryptocurrencies in combination to the current financial system. Tobi holds a bachelor's degree in Agriculture.