‘Good probability’ the U.S. will outlaw bitcoin: Ray Dalio

Bridgewater Associates founder Ray Dalio joins 'Influencers with Andy Serwer' to share his thoughts on Bitcoin and cryptocurrencies.

Video Transcript

ANDY SERWER: Bitcoin. I mean, so it's a two-part question. Is that in a bubble? Maybe three-part question. Is it dangerous? And what do you think the likelihood of the government outlawing it is? And is that even feasible?

RAY DALIO: Bitcoin has proven itself over the last 10 years. It proved 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, storehold of wealth. It's like a digital cash. And those are the pluses. Bubbles are financial assets that have imputed value. It's an asset that doesn't have intrinsic value. It has imputed value. It's whatever we think it is.

And if you look at some of the bubbles in the past, a great book is "Extraordinary Popular Delusions and the Madness of the Crowds" by Mackay, 1845 or something. But he talks about the South Sea bubble, and he talks about the Mississippi bubble and so on. It is when people love it. It's the dot com bubble and so on. And it-- that, you know-- that could be. So when you look at Bitcoin, it's a possibility. You know, it's an alternative because there aren't many such assets. There are not so many assets that might have intrinsic value that can't be messed around.

As far as the government allowing it, the history was, you know, banks always used to exist. And then, with the Bank of England, they decided that it was in their interest to have a monopoly on banking at a country. And so, what we did is every country treasures its monopoly on controlling the supply and demand. 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. And you're watching that question arise in India today. India today is making the move to outlaw it, outlaw possession of it. OK, so we have to see what that means.

Now, can they do it? Now we get into the particulars. My understanding from people who are sort of in government surveillance and so on is, yes, it's a-- they can understand, they can track it. They can know who's dealing with it. I don't know. Like, I'm not an expert on that. But, you know, there's a whole way. Is it private wallets? Is it not private wallets? How do you do this, this and the other thing. I would suspect it would be very hard to hold up against that kind of action. So that's what it looks like to me.