Dalio Admits "I Might Be Missing Something" As Bitcoin Surges Above $18,000

Since the US election, Bitcoin prices (in USD) have surged a stunning 40%, also lurching higher after each vaccine headline hit.

Source: Bloomberg

Getting ever closer to its all-time record high...

Source: Bloomberg

As crypto prices soared overnight, Bridgewater Associates founder Ray Dalio stepped back into the fray, saying in a Twitter thread that “I might be missing something about Bitcoin so I’d love to be corrected.” 

... My problems with Bitcoin being an effective currency are simple. They are that:

1) Bitcoin is not very good as a medium of exchange because you can buy much with it (I presume that’s because it’s too volatile for most merchants to use, but correct me if I’m wrong)...

2) it’s not very good as a store-hold of wealth because it’s volatility is great and has little correlation with the prices of what I need to buy so owning it doesn’t protect my buying power, and...

3) if it becomes successful enough to compete and be threatening enough to currencies that governments control, the governments will outlaw it and make it too dangerous to use. 

Also, unlike gold which is the third highest reserve assets that central banks own, I can’t imagine central banks, big Institutional investors, businesses or multinational companies using it. If I’m wrong about these things I would love to be corrected. Thank you.

This comes after Dalio's comments last week that “I don’t think digital currencies will succeed in the way people hope they would,”  citing those three main problems with bitcoin and other cryptocurrencies that will limit their future.

Dalio's skepticism did not make it as far as Chicago where open interest for bitcoin futures traded on CME Group’s exchange has reached record highs of $976 million amid a surge of institutional capital inflows to the leading cryptocurrency and its derivative markets.

Hollywood is also chiming in with Game of Thrones actress Maisie Williams asked "Should I go long Bitcoin?"

The poll (of over 900,000 respondents) suggests no, but Mike Novogratz had some alternative advice:

Finally, we note that Bitcoin's recent surge has pushed its market cap to a record high above $336 billion, outstripping the market cap of Nvidia — one of the world’s most well-known manufacturers of graphics cards (that incidentally are often used to mine cryptocurrencies).