Ray Dalio has agreed that Bitcoin should make up a small percentage of investors’ portfolios this year. The hedge fund manager remains bullish on Bitcoin this year, listing three main reasons why Bitcoin is ‘impressive.’ During a recent interview with The Investors Podcast, Dalio talked up gold and Bitcoin (BTC) as an inflation hedge.
When he was asked by William Green about what a sensible allocation for a layperson would be, he said that he agrees with another billionaire, Bill Miller, who suggested that 1%-2% is the right allocation. He said that the network has never been hacked since its launch.
Dalio believes that bitcoin does not have a better competitor and the rate of Bitcoin adoption rate would indicate that it might also chip away at gold’s market capitalization:
“Bitcoin now is worth about $1 trillion, whereas gold that is not held by central banks and not used for jewelry is worth about $5 trillion. When I look at that, I keep that in mind because I think, over time, inflation hedge assets are probably likely to do better.”
The founder of the biggest hedge fund in the world, Bridgewater Associates, Dalio reiterated comments made in 2021 in a recent interview with the podcast, stating that he was impressed that Bitcoin has managed to survive the last ten years while adding that he is “not favorable to cash.”
Notably, he did caveat his musings on the surge of Bitcoin, mentioning the tumult surrounding the Bitcoin community as a possible Achilles heel, and such is expected for the investor called “Mister Diversification.” Furthermore, he floated a wider question about digital assets:
“When does somebody collect, take the money they made in Bitcoin and then diversify that and, in other words, move to other things?”
He was also excited about the nonfungible tokens (NFTs) and other coins terming them as possible diversification destinations. But for now, bitcoin occupies a place in his “inflation hedge asset class” together with gold.