Gold’s Lack of Traceability Beats Bitcoin, Billionaire Ray Dalio Says

American billionaire investor and hedge fund manager Ray Dalio says that he still prefers gold over Bitcoin.

In the latest episode of the Lex Fridman Podcast, Dalio refers to a characteristic not often referred as one of the advantages of gold versus Bitcoin. Pointing to the lack of traceability, a ‘quality’ that until recently was contributed to fears of the top cryptocurrency being used for criminal purposes, he said:

“Gold is still my favorite because of certain qualities. For example, you can’t trace it. In Bitcoin, you can trace who owns it, where it’s going and so on. Governments can have that ability to trace it and so on. A gold piece of coin, it’s not connected. I think not connected has benefits particularly in a world where maybe connections can be more risky.”

The hedge fund manager also cites other reasons of his preference for gold, despite Bitcoin’s mainstream adoption:

“Also gold has been, for many thousands of years, universally recognized as a source of money and central banks, it’s the third-largest source of money in central bank reserves and I don’t think Bitcoin is going to serve those types of purposes and so on. So for various reasons, I prefer gold to the other but it’s a little bit part of my mix.”

Nevertheless, Dalio acknowledged Bitcoin for its accomplishments over the years and said it has established itself as an alternative form of money:

“The evolution of Bitcoin over the years is one of the things that has influenced changes in my view. It has proven itself.

It has not been hacked. It has operated. It is built. It has come an amazing way over that 11 years to be probably the most exciting topic among a lot of people and has been used and has obtained the status of having imputed value.

At the same time, it is one of those assets that is an alternative money. I think we’re entering an era where there’s going to be a competition of moneys because of the printing of fiat money and the depreciated value. There will be a competition of money and Bitcoin is part of that competition.”

In a recent interview with Yahoo Finance, Dalio said he continues to invest in Bitcoin (BTC) and top smart contract platform Ethereum (ETH) as inflation continues to hurt the value of fiat money.