Banks Won’t Touch Bitcoin: Dalio’s Eye-Opening Explanation

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Markets

What to know:

  • Ray Dalio enters the privacy debate, noting Bitcoin’s full transparency makes central banks less likely to adopt it.
  • He adds that Bitcoin’s correlation with tech stocks and its relatively small market size put it at a disadvantage next to gold as a reserve hedge.

Bitcoin’s transparency-once hailed as its most shining virtue-now, as if in a grim comedy, may deter the very men who keep the wheels of state turning. Dalio, a man of wealth and caution, suggests that the sovereigns will not crowd into a ledger that broadcasts every move as plainly as a summer sky reveals the stars. Even as corporations and institutional investors clasp the chain like a cherished scarf, the central banks hesitate, as one might, to wear such openness as armor.

The billionaire hedge fund manager, who also dabbles in the coin itself, wrote on X that, “Bitcoin lacks privacy. Transactions can be monitored and potentially controlled, which is why central banks aren’t looking to hold it.” A remark dipped in the cool irony one expects from modern fortune-tellers of finance.

Dalio has previously confessed a modest dalliance with the asset, allocating about 1% of his portfolio to Bitcoin.

Bitcoin, the grandest of blockchains, is a decentralized chorus sung on a public ledger. Each transaction is etched forever, a ledger that can be glided through by any passerby with a block explorer and a curious eye. The addresses, though pseudonymous, are not entirely free from the watchful eyes of analytics firms and law enforcement, who can, in practice, trace the journey of coins and seek the lines that bind them to persons or institutions.

In plain speech, the flow of BTC is transparent and traceable, even if the faces behind the addresses remain veiled. And this very glare of openness, praised by the true believers of the coin, may be the reason central banks shrink from it. Picture, if you will, a central bank amassing an asset whose movements can be followed in real time on a public ledger-an image that might provoke a sigh from the stateliest of regulators.

The lack of privacy weighs especially upon large institutions. At Consensus Hong Kong in February, participants remarked that the broad adoption of blockchain technology by the financial elite may hinge on stronger privacy for sizable transactions.

The market, it seems, lends an ear to the growing chorus on privacy. The privacy-centric coin zcash (ZEC) has surged, indeed, by more than 800% since early 2025, while Bitcoin has slipped, down by over 10% in the same period.

Correlated to stocks

Dalio’s concerns reach beyond the mere question of central banks. He points to structural impediments that dampen Bitcoin’s appeal as a reserve asset compared with gold. One such impediment is its tendency to imitate Wall Street, particularly the technology-heavy Nasdaq, rather than acting as an independent bastion of value in times of strain.

As this is written, the 90-day correlation between Bitcoin and the Nasdaq stands at 0.89, according to data from TradingView. That translates to an R² of around 0.79, implying that roughly 79% of Bitcoin’s price movements may be explained by its relationship with the Nasdaq over the 90 days. The conclusion, alas, is not a victorious march toward autonomous virtue, but a portrait of BTC as a risk-on asset reflecting the mood of the market rather than standing firm on its own two legs.

Another critique concerns market scale and structure. Unlike gold, which lies entrenched in the world’s economies and held across vast stretches of society, Bitcoin remains a comparatively small and easily swayed market. In Dalio’s view, these factors further debilitate its case as a universal reserve asset, notwithstanding the rising participation of institutions.

“Ultimately, gold is more widely held, deeply established, and still plays a central role in the global system,” he has noted. Dalio’s preference for gold over Bitcoin has been a longstanding refrain, though it has met its share of rebuttals from those who prize the novelties of the digital realm.

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2026-05-12 08:47