Bitcoin advocates have found themselves with a new ally: Ray Dalio, founder and co-chairman of the Westport-headquartered Bridgewater Associates.
During an “Ask Me Anything” session yesterday on the social media site Reddit, Dalio was queried on having bitcoin within an investment portfolio. Dalio responded in the text-based Q&A with his first on-the-record endorsement of the cryptocurrency”™s potential.
“I think that bitcoin (and some other digital currencies) have over the last 10 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,” he wrote. “So it could serve as a diversifier to gold and other such storehold of wealth assets.”
However, Dalio told his Reddit audience not to focus on a single investment vehicle in view of current economic conditions.
“The main thing,” he said, “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. As far as 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.”
Dalio”™s remarks are a shift from the series of comments he made last month on Twitter where he questioned bitcoin”™s viability and volatility, worrying that it could be outlawed “if it becomes successful enough to compete and be threatening enough to currencies that governments control.”
During his Reddit session, Dalio also criticized central bank policies in response to the Covid-19 pandemic, warning that it will contribute to further economic tumult.
“We are in a flood of money and credit that is lifting most asset prices and distributing wealth in a way that the system that we’ve come to believe is normal is unable to, and that is threatening to the value of our money and credit,” he stated.
“Most likely that flood will not recede, so those assets will not decline when measured in the depreciating value of money. It is important to diversify well in terms of currencies and countries, as well as asset classes.”
