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The recent growth of Bitcoin has put the world’s government’s on alert. It’s not unlikely that over the next couple of years we may witness a conflict between governments and crypto creators and users. But, can the government-imposed ban on Bitcoin really happen?Will Bitcoin Be Banned By The United States Government?
Billionaire investor Ray Dalio sees it as a realistic possibility. Dalio is the founder of the world’s largest hedge fund, Bridgewater Associates, worth over $150 billion. He feels that there’s a “good probability” that we’ll see a similar scenario as in the 1930s when the US government made privately owning gold illegal. In 1934, the government banned individuals from owning gold so it wouldn’t compete with money as a storehold of wealth.
Dalio points out that each country aims to maintain the monopoly on the control of supply and demand. With any type of money that’s not under their supervision, things can get out of hand. For this reason, Ray Dalio thinks that it’s likely that we’ll see Bitcoin banned. Some countries have already taken steps to this end. In India, a law to make possession and trading of cryptocurrency a criminal offense has been proposed. It would effectively criminalize the whole crypto industry. Indian Government has already taken steps in this direction. In January they brought forward the agenda which includes banning all cryptocurrencies with the exception of the technology behind Bitcoin – blockchain. India plans to use blockchain to develop a framework for the creation of official digital currency.
Comparing the current situation with the one in the 1930s, Dalio finds a lot of similarities. 90 years ago, cash and bonds became such bad investments that the people turned to other stuff, mostly gold. Today, Bitcoin represents a similar hedge for many investors. It has surged in value due to the market insecurity caused by high levels of debt and a lot of liquidity and stimulus. Bitcoin investors tried to find a viable alternative to traditional currencies which are now under the threat of inflation.
According to Dalio, the potential ban would cause the demand for bitcoin to plummet. While admitting he’s no expert, Dalio also doubts that the privacy of Bitcoin transactions could be protected. However, it will be hard for the government to track what’s going on with private wallets. The billionaire investor further noted that Bitcoin has proven itself over the last 10 years. In all that time, it hasn’t been hacked. So, it does provide certain security to its users. Also, the largest cryptocurrency has built a numerous following.
This is not the first tie Dalio has spoken on Bitcoin. In November, he complimented the technology. He’s amazed by the accomplishment and the fact that they managed to invent a new form of money. At the same time, he expressed the belief the governments won’t let Bitcoin win. Still, Dalio thinks that Bitcoin has room to grow. Mainly because of the lack of alternatives to money other than gold. The times we live in demand those sorts of alternatives and we are in short supply of them.