In an interview with the Economic Times on May 6, Ray Dalio, the billionaire investor and founder of Bridgewater Associates, talked about the promises of digital assets, particularly Bitcoin, noting its excellent performance over the previous decade. He remarked that as the global economic landscape is shifting, the billionaire investor suggested that investors diversify their investment portfolios.
According to Ray Dalio, Bitcoin’s restricted quantity makes it akin to other widely acknowledged inflation hedges like gold. However, he does not envision central banks embracing Bitcoin as a reserve asset due to a number of concerns, including privacy and the fact that it is illegal in several countries.
He remarked:
“Still, there are issues with them. Transactions can be traced so privacy is an issue. They can be controlled, they can be shut down, they can be made illegal which tends to tap in during times when they may be threats to the alternative currency. So, I don’t think they’ll be held as central bank reserves for various reasons.”
While Dalio believes that digital assets such as Bitcoin should be included in an investor’s portfolio, he also feels that gold is a stronger inflation hedge.
He emphasised that the current Bitcoin’s total market worth is less than Microsoft’s, making it less enticing as a store of wealth than gold. However, the billionaire voiced confidence in the crypto industry’s expansion over the next ten years.
He emphasised:
“I think that the environment that we’re in is an environment in which there is a risk of political confiscation or any other forms of confiscation. I think gold does a better job but as I said, we’re into this new environment and that could include NFTs and all sorts of things. It’s a competitor but I think in terms of its qualities, not as good a competitor… But we’ll figure those things out. It will evolve over the next 5 to 10 years.”
He stated that every investor should have bitcoin, gold, and other conventional assets in their portfolio to protect themselves against soaring inflation.
“I think it’s a mistake for anybody to have just one, such as picking a digital currency and not having any gold, or just having gold and not having any digital currency.”
