- Ray Dalio evaluates Bitcoin’s performance and determines that its characteristics make it a potential store of value.
- Dalio states that he prefers to keep his wealth in assets that can be held by central banks.
The founder of one of the world’s largest hedge funds, Bridgewater Associates, Ray Dalio took part in an Ask Me Anything (AMA) session. There, he stated that the world lives in “risky and unusual times” and that he has been studying how to reserve currencies to influence the “rise and fall” of great empires. Bitcoin was part of the discussion.
Dalio has been a critic of Bitcoin. In the past, he has stated that it is possible that cryptocurrencies will be banned by governments. Dalio also pointed out the volatility of the crypto market, which is why BTC’s potential as a safe haven is rather limited.
However, his position seems to have changed. It is likely that the performance of the cryptocurrency during the course of the Covid-19 pandemic has been one of the causes that have led Dalio to take a different position. Speaking about Bitcoin’s role as an asset with the potential to improve economic inequality, the founder of Bridgewater Associates said:
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.
Dalio recommended investors to diversify their portfolio by acquiring some limited supply cryptocurrencies. This feature has been pointed out by experts as one of the main factors in the adoption of Bitcoin by large investors. In that sense, the founder of Bridgewater added:
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.
However, the asset management giant seems not to be ready to gain exposure on BTC. He stressed his position that assets used by institutions such as banks are better for storing wealth.
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.
Traditional market giants warm up with Bitcoin (BTC)
Yesterday, the Head of Growth for crypto exchange platform Kraken, Dan Held, gave an account of the institutions and investors with a significant track record that has adopted or fixed a favorable position towards Bitcoin. Like Dalio, the listed entities and individuals believe that BTC is a digital version of gold.
[UPDATED] Financial institutions and trading legends that recognize Bitcoin is Gold 2.0:
– JP Morgan
– Deutsche Bank
– Paul Tutor Jones
– Stanley Druckenmiller
— Dan Held (@danheld) December 8, 2020
In addition to the aforementioned entities, Held added BBVA Spain. The second-largest bank in that nation may soon make an announcement about launching a service based on cryptocurrencies. BBVA has about $840 billion in assets under management.