Billionaire hedge fund veteran Ray Dalio says that the global financial landscape is now in an environment where investors need to ask what money really is and that a “digital gold” like Bitcoin (BTC) may be the answer.
In an interview with CNBC’s Squawk Box, Dalio says that Bitcoin’s purpose as a store of value makes logical sense as part of a diversified portfolio in the current economic conditions.
“I think that cryptocurrencies and, in particular, blockchain is great… Let’s call it a digital gold, I think a digital gold, which would be a Bitcoin type of thing, is something that probably in the interest of diversification to finding an alternative to gold, has a little spot relative to gold and then relative to other assets.”
The Bridgewater Associates chief predicts that fiat currencies enter a 1930s-style phase of rapid devaluation relative to goods, services and hard assets. While BTC is only a small part of his portfolio, he says the flagship crypto asset may prove to be a useful tool for investors looking to hedge against a hyperinflationary economic environment and financial turmoil.
“When I say cash is trash, what I mean is, that all currencies in relationship to the euro, in relationship to the yen, all those currencies, like in the 1930s, will be currencies that will go down in relationship to goods and services. And we are going to be in an environment where we’re going to be looking at: What are those assets? What is the type of money that we can move between countries, that’s a medium of exchange and a store hold of wealth?…
Bitcoin has made a tremendous achievement over the last 11 years of being that. It’s a tiny percentage of my portfolio. I think the Bitcoin people get too preoccupied with it, I think the gold bugs get too preoccupied with it, and I think you have to look at the broader set of assets that serve that purpose.”
Dalio, a former Bitcoin skeptic, began to change his tune in late 2020 when he decided it could act as a diversifier to gold.
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