Why Ray Dalio believes Bitcoin will never be a “reserve currency”

[Joy- maker]

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Greetings to you all my fellow Bitcoin talkers. I don't know if anyone has came across this on Twitter, where Ray Dalio tweeted this above.
And When I first came across it on Twitter I was eager to carry out some few research, so that I can get the real gist from a reliable source which I succeeded in getting one. And after reading through the source I came to understand everything in details, on how Ray Dalio took his time to outline how he think about bitcoin and his believe towards Bitcoin. Note, I created this thread for discussion purpose so that our Bitcoin OG's, and those users with good knowledge, and  better understanding about Bitcoin and blockchain technology can enlighten us, and clear us on this debate by Ray Dalio. And before now I have came across some few threads this one here for example which the thread was created by a user here who have spent roughly seven good years in this forum and yet he or she has learnt nothing. because the user was saying that gold is far more better than Bitcoin, which I'm beginning to believe that tweets like the one of Ray Dalio is what is making them to start thinking that way.


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Here are some of his replies under his tweet, and there more where he was criticising Bitcoin, saying manner of things about Bitcoin. And he even further stated that, gold is the first, while Bitcoin is the second, why because bitcoin did not pass secondary test (howey test).
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[romero121]

By the start of the month, the price of Bitcoin was around $112000, and today it has touched the lowest bottom of $86500. In just 20 days there is a difference of around $25500. I don't say this happens forever, but we aren't predictable about the market movement. If a country held its reserve in terms of bitcoin, now the country would've experienced a downturn in its economic movement. When the price gets bumped, the country will benefit. In reality to experience such a bullish market forever is impossible.

[Ambatman]

Well the government ain't a fan of transparency except when it comes to their citizens privacy right.
Bitcoin is what Fiat isn't, Money.

Code could be broken? Not really enlightened on the beauty of Decentralization and how Bitcoin works.
If he's talking about quantum computing then he would sound stupid so maybe he meant fork
And fork isn't Bitcoin. Just another coin.

So far, Bitcoin has shown to be positively geared volatile and Fiat doesn't protect buying power
And even supposedly stable Gold isn't free from volatility.
It boils down to relativity.

[Joy_learns_crypto]

His personal approach that he does have some bitcoin in his wallet even if it’s not much tells that he may think that of bitcoin but it could be wrong so he has some bitcoin just in case.
Before Ray Dalio there were other who doubted bitcoin and many of their statements time has made not to be true.
But I concede to him that the involvement of the government will change things about the transparency of bitcoin.  But while you doubt bitcoin in any way be like Ray Dalio get some for yourself.

[_act_]

Maybe he is an alien that does not know what is going on in the world. If it was before, we have seen many central banks that are against bitcoin, but now they are looking towards making it as one of their reserves. Maybe he is sleeping and not knowing what is going on about bitcoin in the world. He can continue to be a critic of bitcoin but he will see many countries adopt bitcoin as reserves.

[headingnorth]

Well the code doesn't write itself. You still have to trust the people who write the code to keep it secure.
That is counterparty risk. Bitcoin is not trustless nor decentralized in that sense. The power to
make such changes lies in the hands of a few.

Several bitcoin developers are also altcoin or memecoin developers who receive funding from
Wall Street VCs and the crypto lobby. So we can see where their priorities lie. These people are not acting out
of the goodness of their hearts and it would be naive to assume that they are. They are acting out of self-interest.

They have pushed through major controversial changes to the code in the last three years that have weakened
the security and integrity of the bitcoin network. And I doubt they will stop there so things can only get worse.

[tsaroz]

He don't make sense at all.
Yes all the transactions are public but it don't mean there's no privacy at all. There's no identity tied to an address or transaction furthermore if you absolutely wants not to be tracked where the money came from or went to, there are ways but its not even necessary to go to those measure for Publicly accountable institutions.
The government don't control the code. They may control the legality of trading in bitcoin but the code is controlled by consensus among devs, node operators and miners.
Bitcoin is relatively volatile compared to fiat which has its benefits and flaws but as it matures, we expect it to be less volatile still appreciate compared to fiat as its not minted out of thin air and has a limited supply.

[Abiky]

By the start of the month, the price of Bitcoin was around $112000, and today it has touched the lowest bottom of $86500. In just 20 days there is a difference of around $25500. I don't say this happens forever, but we aren't predictable about the market movement. If a country held its reserve in terms of bitcoin, now the country would've experienced a downturn in its economic movement. When the price gets bumped, the country will benefit. In reality to experience such a bullish market forever is impossible.

"The lowest bottom" during the course of the year. But comparing current prices versus those back in 1-2 years? I'd say Bitcoin is still doing fine. This is nothing more than a temporary setback (market correction) caused by the reopening of the US government, among a few other things. Gold is volatile (although at a lesser degree than Bitcoin), yet it was the "reserve currency" of the world years ago.

There's nothing stopping Bitcoin from achieving the same status of Gold. I mean, institutional investors and governments are buying it up like crazy. Even some governments are considering adding it to their national reserves (US, Pakistan, etc). Never say never. Maybe Ray Dalio will change his mind in the future? I sure hope so.

[Dogedegen]

He is wrong and it is because his analysis is completely flawed. First and foremost, Bitcoin is usually being considered to become a reserve asset and not a reserve currency. There is a huge difference between the two. However let's go with his currency analysis and let's consider the US dollar as the leading reserve currency:

1) Medium of exchange? Terrible, outside of USA very few merchants accept it except for high level business deals. Can I spend my dollar in a supermarket in Germany? No. Therefore this is invalidated easily.
2) Store of value? Terrible, the US dollar is rapidly losing value. It is not as volatile as Bitcoin, but it is continuously losing value without stopping.

Conclusion? The US dollar should not be a reserve currency according to Ray Dalio, yet it is. Next, why would a central bank need privacy? To manipulate the real situation and help with corruption instead of providing transparency? Bitcoin is perfect for the creation of a transparent government. Every single thing could be 100% transparent without needing any kind of extensive or complicated audits. This is not in the interest of corrupt governments and corrupt rich people like Ray Dalio, this is why he wants privacy and not transparency for a central bank.

Here are some of his replies under his tweet, and there more where he was criticising Bitcoin, saying manner of things about Bitcoin. And he even further stated that, gold is the first, while Bitcoin is the second, why because bitcoin did not pass secondary test (howey test).

That is not even true, what has the Howey Test have to do with this? Man he's just being stupid these days or did you make a mistake here? Gold also does not pass the Howey Test.

[Aanuoluwatofunmi]

If he's able to see what bitcoin has turned into now, I guess he must be able to shame his act and covered his face because bitcoin is far beyond what he ordinarily thinks of, to say the fact, no one never expected that we got to this place this fast, we have them like that in their numbers, who have taken time to discourage about bitcoin before they were exposed of what's behind Bitcoin.

[davis196]

The idea of Bitcoin being rejected by the central banks as a reserve currency because of the transparent nature of the blockchain hasn't been shared or discussed enough. Why would a central bank care about the transparency of the transactions? Is it because all news about big amounts of BTC being sold lead to a short term price drop? I think that the main reason behind central banks rejecting BTC as a reserve currency is the price volatility. All central banks need assets with stable prices in their reserves. The idea of crypto being accepted as reserve currency is the same as big tech stocks being accepted as a reserve asset by the central banks. This would never happen in real life.

[KiaKia]

Reserve currency is a math that I am still yet to balance too, whenever I think about it things doesn't just add up, and I won't forget that part where Trump plans to use Bitcoin to erase all US debt, this one doesn't make sense either.

So far in this 2025 it is clear that the debt that got cleared was that of Trump family's, not the US debt, they made millions or billions, but that's not even close to the quarter of the US debt so how did they come to the conclusion that they can erase the country's debt.

I believe that was a strategy to get money out of the market, it was all planned to deceive the public into thinking that this is possible, someone should please help me out, make this make sense to me.

[BALIK]

The idea of Bitcoin being rejected by the central banks as a reserve currency because of the transparent nature of the blockchain hasn't been shared or discussed enough. Why would a central bank care about the transparency of the transactions? Is it because all news about big amounts of BTC being sold lead to a short term price drop? I think that the main reason behind central banks rejecting BTC as a reserve currency is the price volatility. All central banks need assets with stable prices in their reserves. The idea of crypto being accepted as reserve currency is the same as big tech stocks being accepted as a reserve asset by the central banks. This would never happen in real life.

Exactly, volatility is the main reason why banks are reluctant to add this currency to their national reserves. Because the purpose and mission of national reserves is to stabilize and protect the national economy against economic shocks such as economic crises, exchange rate fluctuations, inflation or global recession.

It is the government and central bank's job to ensure and maintain the most stable economy possible. They have no need for investment or profit, either in the short or long term. Therefore, they will be willing to eliminate any volatile, risky asset regardless of its profit potential. They only prioritize stable assets, and that is why gold is always the top choice.

As long as bitcoin remains volatile, its chances of becoming a reserve currency are very low.

[OcTradism]

Well the government ain't a fan of transparency except when it comes to their citizens privacy right.

They are not fan of transparency and privacy of their citizens and they want the opposites. They want to break down citizen privacy, and break down their citizen financial flow in order to trace it as best as possible. I guess I understand what you implied but it seems you wrote the post and expressed your opinion a little bit wrongly (just with your writing).

Privacy matters for citizens and for governments.
Citizens want privacy.
Governments want privacy and don't want to publicly everything they do.
But very unfortunately, citizens are more vulnerable to lose their privacy and financial information.

Privacy always matters.
https://bitcoiner.guide/privacy/
https://www.lopp.net/bitcoin-information/privacy.html

[Smartprofit]

In my opinion, the transparency of the Bitcoin blockchain makes it an ideal reserve asset. I'm confident that Bitcoin will become an integral part of central bank reserves (in all countries)! This will, of course, require amendments to the Basel Committee documents. And I'm sure such amendments will be made! 🙋

What, in my opinion, are the advantages of Bitcoin's blockchain transparency? It minimizes audit costs. There's a trust deficit worldwide. Individual countries (not to mention organizations and individuals) don't trust each other. At the same time, all countries need a universally recognized financial asset. Governments certainly want to see exactly how much of this financial asset is held on their central bank balance sheets. In my opinion, Bitcoin is precisely such a financial asset. After all, it was originally created to operate outside of a trusted environment.

[Dogedegen]

If he's able to see what bitcoin has turned into now, I guess he must be able to shame his act and covered his face because bitcoin is far beyond what he ordinarily thinks of, to say the fact, no one never expected that we got to this place this fast, we have them like that in their numbers, who have taken time to discourage about bitcoin before they were exposed of what's behind Bitcoin.

There is an assumption that is often made and that is if a person is very wealthy like Ray Dalio that they are able to understand Bitcoin. This is not true and he proves it, he has a very superficial understanding of Bitcoin.

The idea of Bitcoin being rejected by the central banks as a reserve currency because of the transparent nature of the blockchain hasn't been shared or discussed enough. Why would a central bank care about the transparency of the transactions? Is it because all news about big amounts of BTC being sold lead to a short term price drop? I think that the main reason behind central banks rejecting BTC as a reserve currency is the price volatility. All central banks need assets with stable prices in their reserves. The idea of crypto being accepted as reserve currency is the same as big tech stocks being accepted as a reserve asset by the central banks. This would never happen in real life.

Under the discussion that we are having here there can only be 1 issue that someone can have with transparency and that is that corruption. When things are not transparent it is easier to corrupt and hide corruption. A central bank that is not corrupt will have no issue with having its reserve on a BTC address that is know to everyone. This makes it easy to audit their holdings at any time with practically zero cost. This is an operational improvement in efficiency, everyone that isn't corrupt would want it for this use case.

In my opinion, the transparency of the Bitcoin blockchain makes it an ideal reserve asset. I'm confident that Bitcoin will become an integral part of central bank reserves (in all countries)! This will, of course, require amendments to the Basel Committee documents. And I'm sure such amendments will be made! 🙋

Of course it is. With the current reserves you practically have to trust that someone or many someones are not lying in the chain. Where is the gold? Is it all really there? Is it real gold? Is it partially real gold with lower purity than expected? Has some of it silently been replaced by fake gold? Nobody can answer you this in a way that is 100% provable. A reserve in Bitcoin is always mathematically provable. Location, quantity and history of movements would all be auditable easily.

[Donneski]

Judging by the content of these tweets, I think Dalio’s view still comes from a traditional finance mindset. He focuses on volatility and public transactions because he’s comparing Bitcoin to central-bank money which it was never designed to replace in the same way.

What I actually find interesting is that he still admits Bitcoin is worth paying attention to and even holds some. That alone shows how far it has come. People like Dalio will probably keep underestimating bitcoin until the technology and adoption reach a point where the advantages are harder to ignore.

[nakamura12]

i am thinking the reason why Ray would think why Bitcoin will never be a reserve currency because of volatility. I think government would think the same even the banks that's why not many would want to add bitcoin as a reserve currency. Well, it's not the same as before where it is like that where even banks regulates some crypto/wallet exchange. It may be due to thinking that it should replace fiat when it can be one of the options like if you want to use cryptocurrency or fiat.

[NotATether]

Ah yes, that's right, how will the central banks continue to enable some of their subordinate banks to continue their fraud if the ledger is public? Oh yes, silly me, with CoinJoin. But I forgot that's a banned word in governmental spaces.

To be honest though, if that's the only reason preventing adoption, I would say we are quite fortunate. I was expecting the volatility to be an issue or something.

[martinex]

Judging by the content of these tweets, I think Dalio’s view still comes from a traditional finance mindset. He focuses on volatility and public transactions because he’s comparing Bitcoin to central-bank money which it was never designed to replace in the same way.

What I actually find interesting is that he still admits Bitcoin is worth paying attention to and even holds some. That alone shows how far it has come. People like Dalio will probably keep underestimating bitcoin until the technology and adoption reach a point where the advantages are harder to ignore.

In my opinion, he's simply describing what he's currently observing, and he's a person who understands things not through reason, but through knowledge and data, and by following their journey.

I don't see Dalio belittling Bitcoin and saying it's dead. Rather, what he's seeing is the speculative behavior of large BTC holders who appear to be holding on to it, but eventually, they'll dump it, leading to price volatility, and the government's constant shifting policies.

Finally, I read something he said in one of his posts: “Think of every journey as a process of discovery.”