Did Ray Dalio Just Say You Should Buy Bitcoin?
Ray Dalio, American billionaire investor and founder of major global investment firm Bridgewater Associates, has suggested that the world's number one crypto, bitcoin (BTC), may be a good asset for one to diversify their portfolio.
In a recent Reddit ask-me-anything (AMA) session, Dalio touched on the burning question of crypto, and specifically the number one coin by market capitalization.
"I think that bitcoin (and some other digital currencies) have over the last ten years established themselves as interesting gold-like asset alternatives, with similarities and differences to gold and other limited-supply, mobile (unlike real estate) storeholds of wealth. So it could serve as a diversifier to gold and other such storehold of wealth assets," he said.
In Dalio's opinion, it's important for a person to have mobile, diversified, limited-supplied, storeholds-of-wealth diversifiers as part of their portfolio - or in his words:
"The main thing is to have some of these type of assets (with limited supply, that are mobile, and that are storeholds of wealth), including stocks, in one's portfolio and to diversify among them. Not enough people do that."
That said, between bitcoin and gold, Dalio suggested he'd go with the one supported by central banks.
"As far bitcoin relative to gold, I have a strong preference for holding those things which central banks are going to want to hold and exchange value in when they are trying to transact," he said.
This latest AMA comes in the context of socio-economic and geopolitical patterns of history and the light they may shed on the current situation, including great national debts, big wealth and political gaps, as well as the rise of new world power (today, it's China) which is challenging an existing one (currently, the US).
On a user's question "What actions can the average person in the US take to mitigate the potential negative impact of the changing world order on the country and on their own life?", Dalio again emphasized the necessity to "[s]ave and put your savings into a well-diversified mix of currencies, countries, and asset classes so that your savings will not depreciate in value and will be enough to help cushion the bumps."
Meanwhile, per a recent report by digital asset management firm CoinShares, it's possible that "investors are choosing to allocate to bitcoin to help diversify the limited-supply asset component of their portfolios." The report found that gold suffered with outflows from investment products of a record USD 9.2bn over the last four weeks, while BTC saw inflows totalling USD 1.4bn.
"This must be taken into context as inflows into gold for the year remain up [USD] 45.7bn," they stated, adding that "[t]he weak US dollar is highlighting fears of excessive monetary policy, combined with worries over management of the COVID crisis is a period when gold should outperform."
In the past, Dalio has either not mentioned bitcoin at all in his reports, with some thinking he had left some room for it anyways, or he avoided the questions on the most popular crypto. He did state, however, that BTC is too volatile to act as a proper store of value, but that if it becomes too big, the governments would attempt to outlaw it.
At 8:53 UTC Wednesday morning, BTC was trading at USD 17,891, having dropped 6.3% in a day and 7% in a week. It appreciated more than 16% in a month.
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