The billionaire investor has his toe in Bitcoin and Ethereum, but in the past, he has refused to reveal how much he has invested in them.
Ray Dalio, co-chief investment officer at hedge fund Bridgewater Associates, recently told The Investor’s Podcast Network which agrees with billionaire Bill Miller’s proposal. In the episode published On January 2, Dalio suggested that investors switch between 1% and 2% of their portfolios to crypto: Bitcoin.
The American investor tied his optimism about Bitcoin to the asset’s lack of susceptibility to hacking, a lack of close competition, and satisfactory adoption rates that will make its valuation fight gold’s market capitalization.
” Bitcoin is now worth around $ 1 trillion, while gold that is not in the hands of central banks and that is not used for jewelry is worth around $ 5 trillion. When I look at that, I keep that in mind because I think inflation hedging assets are likely to do better over time. “ said podcast co-host William Green.
Bitcoin has stood the test of time
Echoing past sentiments in which he praised Bitcoin for surviving the last decade, the hedge fund manager recalled his year-end remarks. The comments carried a positive outlook on cryptocurrencies while labeling cash as the ” worst investment “.
In the interview with Yahoo! Finance had mentioned that Bitcoin had gone 11 years without suffering a hacking incident. This and other factors, including the growing adoption rate of the crypto asset, rated it as a good investment asset.
Dalio also told Green that he recognizes that Bitcoin and other cryptocurrencies have their shortcomings. For example, he noted that while crypto assets have become quite popular with users and investors, it is highly likely that the government could ban them based on the always-random ransomware attacks that often end in crypto losses. He cited this as the rationale why his position on the Bitcoin issue is not exactly “in black and white “.
Dalio on Bitcoin as a hedge against inflation and diversification
In the view of Bitcoin supporters that the currency is a hedge against inflation just like gold, Dalio, who runs the world’s largest hedge fund, agreed. Billionaire investors noted that the argument for it could be that Bitcoin is in limited supply.
“I think that over time, inflation hedging assets are likely to have a better performance. That is why I am not favorable to cash and that kind of thing, “he said.
He went on to pose a question, asking what time it is feasible for investors to get their Bitcoin earnings and invest in other products. Surprisingly, he mentioned that there are several products on the way, ranging from NFT to other altcoins, and investors could potentially look to them to diversify.