Billionaire Ray Dalio admits he owns Bitcoin in his portfolio
The founder of the world’s largest hedge fund Bridgewater Associates, Ray Dalio, has confirmed that a small percentage of his portfolio is allocated to Bitcoin.
In a conversation with CNBC’s Andrew Sorkin on May 24, Ray Dalio reiterated his “cash is still trash” argument at the moment, largely dependent on the speed at which holders hold they are losing purchasing power. This resulted in inflation in the United States remaining at 8.3% in April, down just 0.2% from the previous month’s 40-year high.
To prevent this, the Fed was determined to raise interest rates more aggressively than they have in the past two decades. However, monetary tightening has been affecting equities, which Dalio claims is even “worse” than cash.
The billionaire believes that the Fed’s actions in pumping money and credit into the economy have created unprecedented debt, which will lead to “negative real returns” on a large scale. Because of the concern of diversification, he mentioned Bitcoin deserves a small role in everyone’s portfolio, acting as “digital gold”.
But Dalio maintains that the cryptocurrency still faces risk.
“Bitcoin’s greatest risk is its success. And if it succeeds, one of the great things, I think, as a worry is the government has the capacity to control Bitcoin or the cryptocurrencies. They know where they are, and they know what’s going on,” he said.
This isn’t the first time Dalio expressed concern about the risk of government regulation.
In addition, Ray Dalio noted Bitcoin has made a “huge achievement” over the past 11 years, and so far BTC still represents a small percentage of his own wealth. Notably at the end of 2021, the world’s largest hedge fund boss was revealed to have invested in both Bitcoin and Ethereum.
This means that even though the market has entered a recessionary cycle throughout the past few months, Ray Dalio is still confident with his investment.
On the other hand, though the latest sharing, we can confirm that he himself has acknowledged how Bitcoin can play a special role in today’s worldwide inflationary environment, amid a wide range of safe-haven assets like gold or bonds.
More interestingly, Ray Dalio has been critical of Bitcoin and cryptocurrencies in general for failing to achieve the purpose of money but has seriously re-evaluated the coin as an alternative to gold over the past two years. However, he also issued multiple warnings that if crypto grows too big, the government will eventually take all necessary measures to “hold down” the industry.
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