If would remember sometime back, An American billionaire investor and founder of major global investment firm Bridgewater Associates, Ray Dalio, was not impressed with Bitcoin but rather stick to Gold.
I guess everyone would be surprised if you now hear that he suggested that the world’s number one crypto, bitcoin (BTC), maybe a good asset for diversifying their portfolio.
In a previous Reddit ask-me-anything (AMA) session, Dalio touched on crypto’s burning question and precisely the number one coin by market capitalization.
Dalio mentioned that,
“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.”
In Dalio’s opinion, it’s essential for a person to have mobile, diversified, limited-supplied, strongholds-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.
He mentioned that,
“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.”
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 outstanding national debts, immense 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, through 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 from outflows from investment products of a record USD 9.2bn over the last four weeks, while BTC saw inflows totaling 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 specified bitcoin at all in his reports, with some speculation he had left some room for it anyway, or he dodged the questions on the most popular crypto.
Nevertheless, he stated that BTC is too unpredictable to act as a good store of value, but that if it becomes too big, the governments will try to outlaw it.
This is where it all started:
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