Is Bitcoin Here To Stay? One Wall Street Legend Thinks The Government Could Have A Legit Motivation To Make It Illegal.

Ray Dalio seen on day two of Summit LA19 in Downtown Los Angeles on Saturday, Nov. 10, 2019, in Los Angeles. (Photo by Amy Harris/Invision/AP)

Ray Dalio, the billionaire investor who founded the world’s largest hedge fund Bridgewater Associates, thinks bitcoin may need to be outlawed.

Dalio compared the cryptocurrency’s current situation with that of the U.S. and gold in the 1930s.

“Because cash and bonds were such bad investments relative to other things, there was the movement to those other things, and then the government outlawed them,” Dalio told Yahoo Finance last week. “They outlawed gold. That’s why also outlawing bitcoin is a good probability.”

Bitcoin, with its soaring market value, has proved itself because it has not been hacked and maintains a massive collection of faithful followers.

“It is an alternative store-hold of wealth,” Dalio said. “It’s like a digital cash. And those are the pluses.”

In Dalio’s upcoming book “The Changing World Order,” he says the Gold Reserve Act of 1934 made it illegal for individuals to own gold “because government leaders didn’t want gold to compete with money and credit as a storehold of wealth.” Something similar could happen with bitcoin.

“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,” Dalio told Yahoo Finance.

James Ledbetter, editor of newsletter FIN and CNBC contributor, told CNBC a ban would be difficult.

“I don’t think even a concerted effort among different countries and different central banks could actually shut down bitcoin,” Ledbetter said. “I don’t think that’s technologically possible. But there are ways that bitcoin could be regulated.”

In a January post titled “What I Think of Bitcoin” on the Bridgewater Associates website, Dalio wrote: “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.”

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