Ray Dalio in an interview with CNBC talked about his view on Gold and bitcoin. He compared crypto with digital gold. But he also made it pretty evident that he would still choose the latter over crypto.
“If you put a gun to my head, and you said, ‘I can only have one,’” says Dalio. “I would choose gold.”
Dalio revealed in May that he owns an undisclosed amount of bitcoin. Previous to that he had raised concerns about cryptocurrencies for years. Seems like he still isn’t completely sold on the idea.
“I own a very small amount of bitcoin. I’m not a big owner,” Dalio tells CNBC Make it. “There are certain assets that you want to own to diversify the portfolio, and bitcoin is something like a digital gold.”
Dalio stepped down as the co-CEO of Bridgewater Associates in 2017. He now serves as Bridgewater’s chairman and co-chief investment officer. He has long been a bit of a gold bull: In 2019, he wrote on LinkedIn that adding gold can help balance one’s portfolio because it is both risk-reducing and return-enhancing.
Dalio had said that Bitcoin can help hedge against inflation. But if forced to choose between gold and bitcoin, he says he’d pick gold due to its long history as a “store hold of wealth,” meaning an asset that can be held and converted into money at a relatively similar rate as its purchase price.
He is concerned about cryptocurrency volatility and steep regulations. According to him, there is “a reasonable chance” that bitcoin could eventually be outlawed by the federal government. For Dalio, bitcoin is only one small piece of his larger investment puzzle. “I just think of it as diversification,” he says. “By and large, I don’t really know whether bitcoin is going to go up or down. I could argue both sides of that.”
The key, he says, is to continually reevaluate investments. He asks to avoid buying more of an asset like bitcoin just because it’s temporarily performing well. “Be careful about what you’re putting your money in,” he says. “And make the diversification global, not just in the United States.”
