American billionaire Ray Dalio tells Yahoo Finance why he does not believe bitcoin will succeed. Image: YouTube

American billionaire Ray Dalio says governments will outlaw bitcoin and other cryptos.

A growing number of Wall Street heavyweights are turning to bitcoin as a safe-haven asset, but the founder and co-chairman of Bridgewater Associates, the world’s biggest hedge fund sees no point in joining them.

He told Yahoo Finance that there are three key problems with bitcoin and other cryptos that will prevent them from achieving mainstream success.

Dalio said he believes central bank digital currencies (CBDCs) are far more likely to dominate the fiscal landscape in the future than bitcoin and other cryptos.

He says one obstacle to them achieving success is what he sees as their lack of utility as a payment medium. “I today can’t take my bitcoin yet and buy things easily with it,” he said.

In addition, he said bitcoin and other cryptos are too volatile to be viable stores of value, a problem that also affects transactions because vendors won’t know how much they are receiving.

If bitcoin or other cryptos become “material,” Dalio predicted that governments will “outlaw” them.

“They’ll use whatever teeth they have to enforce that,” he said.

“I don’t think digital currencies will succeed in the way people hope they would.”

Dalio’s assessment of bitcoin runs counter to a growing perception that it is the digital version of gold and could soar to astronomical heights. Companies that recently embraced the asset, including MicroStrategy and Square, have already recorded substantial profits as its price has risen around 50% in the past month alone. Many analysts believe it is just the first leg of a massive bull run that could continue for many months.

Read: Billionaire says bitcoin is better bet than gold