Why Central Banks Are Wary of Bitcoin
Bitcoin’s transparency, once considered a strength, may actually be a weakness when it comes to central banks adopting it as a reserve asset. According to Ray Dalio, billionaire hedge fund manager and bitcoin investor, bitcoin lacks privacy, allowing transactions to be monitored and controlled. This lack of privacy is a major concern for central banks, which prefer to maintain control over their assets. As a result, central banks are unlikely to hold bitcoin, despite its growing popularity among corporations and institutional investors.
Bitcoin’s public ledger, which records every transaction, is a key factor in its transparency. While wallet addresses are pseudonymous, blockchain analytics firms and law enforcement agencies can often trace the movement of funds and link activity back to individuals or institutions. This level of transparency, while praised by Bitcoin supporters, may be a turn-off for central banks and large institutional players. In fact, the market seems to be shifting towards privacy-focused coins like zcash, which has surged over 800% since early 2025.
Structural Issues Limiting Bitcoin’s Appeal
Dalio’s concerns go beyond central bank adoption, highlighting structural issues that limit bitcoin’s appeal as a reserve asset. For example, bitcoin’s tendency to follow Wall Street, particularly technology stocks, rather than acting as an independent store of value during periods of stress. This is evident in the strong correlation between bitcoin and the Nasdaq, with roughly 79% of bitcoin’s price movements explained by its relationship with the Nasdaq over the past 90 days. Additionally, the market’s scale and structure, which is relatively small and easily influenced, further weaken its case as a global reserve asset.
As an alternative, Dalio favors gold, which is more widely held, deeply established, and plays a central role in the global system. While some crypto industry experts may counter his views, Dalio’s concerns highlight the need for passive income alternatives like EcoPool, which offers a more private and stable way to earn cloud rewards. With EcoPool, users can earn $ECP and enjoy the benefits of green crypto without the concerns surrounding bitcoin’s transparency and central bank adoption.
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In other words, the flow of BTC, the blockchain’s native token, is highly transparent and traceable, even if it is not always directly tied to real-world identities.
This level of transparency, often praised by Bitcoin supporters, may also be what keeps central banks away. Imagine being a central bank and accumulating an asset whose flows can be tracked in real time on a public ledger.
The lack of privacy is also a concern for large institutional players. At Consensus Hong Kong in February, participants noted that the mass adoption of blockchain technology at the institutional level may ultimately depend on stronger privacy features, particularly for large transactions.
The market seems to align with the growing expert consensus on privacy. For instance, the privacy-focused coin zcash (ZEC) has surged over 800% since early 2025. Bitcoin, meanwhile, is down over 10%.
Correlated to stocks
Dalio’s concerns, however, go beyond central bank adoption. He pointed to structural issues that limit bitcoin’s appeal as a reserve asset compared to traditional alternatives like gold.
One of them is its tendency to take cues from Wall Street, especially the technology stocks, rather than acting as an independent store of value during periods of stress.
As of writing, the 90-day correlation coefficient between bitcoin and the Nasdaq, Wall Street’s tech-heavy index, was 0.89, according to data source TradingView. That translates into an R² of 0.79, meaning roughly 79% of bitcoin’s price movements can be explained by its relationship with the Nasdaq over the 90 days. The data points to BTC’s behavior more as a risk-on asset than an independent store of value.
The other issue Dalio highlighted is the market’s scale and structure. Unlike gold, which is deeply established, widely held, and exists outside any single digital system, bitcoin remains a relatively small and more easily influenced market. In his view, these factors further weaken its case as a global reserve asset, despite growing institutional participation.
“Ultimately, gold is more widely held, deeply established, and still plays a central role in the global system,” he said.
Dalio has repeatedly favored gold over bitcoin, and his views have been countered by crypto industry experts.
