Bitcoin, Ether are “like gold”, says Cathie Wood, but Ray Dalio is skeptical
Recent turmoil in the banking sector has shown that Bitcoin (BTC) and Ether (ETH) can withstand a shaky economy, outperform other asset classes and act like gold, says ARK Invest CEO Cathie Wood – although a long-time investor remains. t sold.
Wood explained in an April 15 interview that Bitcoin’s resilience through the latest banking crisis has been “the most remarkable” of all the indicators her tech-focused investment management firm monitors.
Bitcoin and Ether now act as “risk-off” assets and as an “escape to safety” for investors amid macroeconomic uncertainty, she argued:
“They are going to disrupt the traditional world order. What do Bitcoin and Ether do? I mean the fact that they’re seen as flying to safety like gold, that’s very interesting and suggests much wider adoption and acceptance than I think most people understand.”
“We would say that there is a flight to safety, certainly led by crypto assets, and that tells us that the world is changing and will continue to transform. You cannot stop innovation,” she added.
Wood believes cryptocurrency will eventually become an “election issue” as the sector becomes more widely accepted and the public can more clearly see the kind of regulatory pressure the US government is placing on the industry to maintain centralized control over money and monetary policy.
Not everyone shares Wood’s sentiments.
Ray Dalio, the founder of Bridgewater Associates, the world’s largest hedge fund by assets under management, explained in an April 12 interview that Bitcoin cannot serve as an “effective currency” because it is too volatile and central banks will not adopt it:
“Bitcoin is neither an efficient store of wealth nor a medium of exchange, so it is not an efficient currency. It has a volatility that bears no relation to virtually anything […] it is a very, very poor alternative to gold.”
“They can outlaw [Bitcoin]. They can regulate it. Central banks and countries mostly don’t want it anyway,” he said, adding that it gets attention “out of all proportion” to its size.
Related: Bitcoin likely to outperform all cryptoassets after banking crisis, analyst explains
Dalio bolstered his case by pointing out that gold is the third largest reserve held by central banks, behind only the US dollar and the euro.
Despite previously describing Bitcoin as “a hellish invention,” Dalio recently explained that he instead wants to see an “inflation-linked” coin that would serve to secure consumers’ purchasing power.
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