Ray Dalio, billionaire investor and Bridgewater Associates founder acknowledges the immense potential of cryptocurrency. Especially mentioning Bitcoin, he emphasized on the impressive performance of the asset in the last decade.
Will Central Banks Embrace Cryptocurrency?
The billionaire investor also noted that there are similarities between the finite supply of Bitcoin and universally inflation hedges like gold.
But due to various issues such as privacy and ban in some countries, he says he does not see central banks embracing cryptocurrency as a reserve asset.
Dalio then goes on to say that there are still issues with them. He points out that privacy is an issue since transactions can be traced. Further, he says when digital assets are seen as threats to the traditionalcurrency, they can be controlled, shut down, and made illegal. Therefore, according to him, it’s unlikely that they will be held as central bank reserves.
Gold Is Better
Though Dalio recommends investors to include digital assets such as Bitcoin in their portfolios, he also thinks that gold does a better job at hedging against inflation.
He further argues that the total market value of Bitcoin is less than that of Microsoft, making it less desirable for storing wealth as compared to gold.
However, the 72-year-old investor predicts an optimistic growth of the crypto industry over the next year.
Dalio further says that there is a risk of political confiscation or any other kind of confiscation of the environment around us. He again says gold is better. He explains that the new environment that includes NFTs and other related things is not a good competitor. Then, again he says that these things will evolve in 5-10 years.
Dalio Advocates Diversification In Portfolio
The billionaire also says that it would be wise for investors to diversify their investment portfolios because of the changing global economic environment. He further says that there should be traditional assets, including crypto and gold, in every investor’s portfolio in order to fight against raging inflation.
He says that it would be a mistake in both cases if anyone has a digital currency and does not have gold, have gold but not digital currency.
Source: https://www.thecoinrepublic.com/2022/05/07/billionaire-investor-ray-dalio-says-bitcoin-is-great-against-inflation-not-a-good-competitor-against-gold/