The billionaire noted that many view Bitcoin as digital gold, as it has a limited supply of coins. He said investors should diversify even though governments do not want cryptocurrencies to succeed.
Ray Dalio is an American philanthropist billionaire who has been a co-CEO of hedge fund Bridgewater Associates. He recently expressed that investors should allocate between 1% to 2% to Bitcoin (BTC).
Dalio, also known as Mr. Diversification, said he agrees with investing in the pioneering cryptocurrency. However, he pointed out that Bitcoin should represent only a low percentage of investment portfolios in 2022.
The hedge fund manager reiterated that he agrees with the suggestion from billionaire Bill Miller to allocate between 1% and 2%. He believes that this is the most sensible decision an investor can make.
Ray Dalio Believes Bitcoin Could Prosper as a Hedging Asset
In December, Ray Dalio said that Bitcoin has merit for a small part of a portfolio. However, he cautioned that cryptocurrency has advantages (pros) and disadvantages (cons).
Although Bitcoin has become prominent, he noted that he is concerned that the government will ban it and that hackers will use it in ransomware attacks.
The billionaire mentioned that many Bitcoin supporters view it as digital gold and a hedge against inflation. They have even compared it to gold because of its design, as there is a limited supply of coins.
Dalio highlighted that the market capitalization of Bitcoin is now around one trillion US dollars. Meanwhile, he commented that the gold that is not in central banks and has no use in jewelry is worth USD 5 trillion. He said that makes him realize that hedging assets could prosper quite well over time.
The billionaire philanthropist added that inflation hedging assets could improve, so he does not favor cash.
Previous Opinions of Ray Dalio on Bitcoin
Interestingly, Ray Dalio called Bitcoin a bubble in 2017 and lashed out at it for its volatility in November 2020.
In September 2021, he told the CNBC channel that cash is trash while showing a positive stance towards Bitcoin and other cryptocurrencies. At the time, he recommended that investors should not keep fiat money.
He also said that governments do not want cryptocurrencies to succeed. In that regard, they consider that those assets take their control over the way citizens use their money away from them. However, the billionaire commented that this does not mean that investors should not diversify.
Dalio stated that Bitcoin has its place, although governments could kill it at some point if it is truly successful.
However, in December 2021, the billionaire investor expressed that he believed that Bitcoin and other crypto assets are secondary investment securities.
Dalio has since confirmed that he owns Ethereum (ETH) and Bitcoin. He described both holdings as a relatively small part of his portfolio without proving details.
Bitcoin has gained prominence in the world economy, which personalities like Ray Dalio have not overlooked. Although he was initially a skeptic about cryptocurrencies, he seems to have realized their value.
By Alexander Salazar
