Ray Dalio, the famous hedge fund titan appears to have changed his tune on bitcoin, admitting that it could be an interesting alternative to gold.
- Ray Dalio hasn’t been a big fan of bitcoin until recently.
- The investor today said it could be a “diversifier to gold.”
- The investor still prefers gold to bitcoin, but might join his peers soon.
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Ray Dalio, the famed investor has softened his stance against bitcoin, warming up to the possibility that it could in fact offer a viable alternative to precious metals such as gold and silver.
During an Ask Me Anything session on reddit, the Bridgewater Associates founder was asked whether bitcoin was the answer to economic inequality caused by the US monetary system.
Dalio didn’t answer the question head-on, and instead focused on what individual investors can do in order to protect their wealth, and presumably to keep apace with billionaires. One way to do this is to buy bitcoin.
“I think that bitcoin (and some other digital currencies) have over the last ten years established themselves as interesting gold-like asset alternatives,” Dalio said, “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. 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.”
In November, Dalio spoke out against bitcoin, stating that it isn’t a great store of value due to its high volatility as well as its potential to be outlawed by governments. However, he also stated that he “might be missing something about Bitcoin so I’d love to be corrected.”
Per Monday’s newsletter, these worries were quickly put to rest by the US Comptroller of the Currency Brian Brooks, who went on record to state that while regulation is coming, “nobody is going to ban bitcoin”.
Dalio’s latest comments are an unambiguous admission that bitcoin is an inflationary hedge.
Having said that, Dalio’s position is still closer to Steve Forbes, who opined last week on the virtues of gold while calling bitcoin “too volatile to be a long term store of value” in his estimation.
As far [sic] bitcoin relative to gold,” concluded Dalio, “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.”
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Macro Investors are all on board the bitcoin train
While investors like Warren Buffett refuse to acknowledge the bitcoin trade for various reasons, Dalio’s tacit acceptance of bitcoin is the ultimate concession bitcoiners have all been waiting for.
Last week, Paul Tudor Jones once again spoke highly of the asset, saying that bitcoin’s market cap of $500 billion would be “the wrong market cap in a world where you’ve got $90 trillion dollars of equity market cap, and God knows how many trillions of fiat currency.”
Paul’s peer, Stan Druckenmiller, announced in November that he think bitcoin will “work even better” than gold if the “gold bet works.” As reported on this blog when bitcoin traded at $11,000 (and even below it), bitcoin will outpace gold by miles due to its inherently better properties.
Druckenmiller is widely revered as one of the world’s best macro investors, on par with both Paul Tudor Jones and Ray Dalio.
Clearly, the final piece of the puzzle is here. Ray Dalio’s insistence that ‘cash is trash‘ is about to reach its logical conclusion: accepting the bitcoin standard.
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