Billionaire Ray Dalio, the founder of the largest hedge fund in the world, is unveiling a prediction on central bank Bitcoin adoption.
In a post on X, Dalio, founder of Bridgewater Associates, says that he doesn’t think central banks will ultimately adopt the flagship cryptocurrency because of its lack of privacy and the potential for Bitcoin’s code to become compromised in the future.
“I can’t say exactly how effective Bitcoin is as a money, but it’s being perceived by many as an alternative money and so is worth paying attention to.
Money needs to be both a medium of exchange and a storehold of wealth — and the latter is more important.
I doubt that any central bank will take it on as a reserve currency. That’s because all of the transactions are public, so there’s no privacy to it, and there’s a risk that in the future the code could be broken to make it less effective through government controls.
My personal approach is that I do have some Bitcoin in my portfolio, but not much.”
In a prospectus for its iShares Bitcoin Trust ETF (IBIT), BlackRock mentions quantum computing under its “risk factors” section.
Quantum computers are considered by many to be a potential threat to Bitcoin due to their theoretical ability to, in the future, override the cryptographic schemes that secure blockchains.
While quantum computers have not yet demonstrated an ability to come anywhere close to threatening Bitcoin, BlackRock says they could render the flagship cryptocurrency “flawed and ineffective.”
“…In the past, flaws in the source code for digital assets have been exposed and exploited, including flaws that disabled some functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets.
The cryptography underlying Bitcoin could prove to be flawed or ineffective, or developments in mathematics and/or technology, including advances in digital computing, algebraic geometry and quantum computing, could result in such cryptography becoming ineffective. In any of these circumstances, a malicious actor may be able to compromise the security of the Bitcoin network or take the Trust’s Bitcoin, which would adversely affect the value of the Shares. Moreover, the functionality of the Bitcoin network may be negatively affected such that it is no longer attractive to users, thereby dampening demand for Bitcoin.
Even if another digital asset other than bitcoin were affected by similar circumstances, any reduction in confidence in the source code or cryptography underlying digital assets generally could negatively affect the demand for digital assets and therefore adversely affect the value of the Shares.”
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