Billionaire Investor Ray Dalio Says He Would Pick Gold Over Bitcoin

Divya  |  Aug 5, 2021

Ray Dalio, the founder of the world’s largest hedge fund Bridgewater Associates, is a Bitcoin owner, but he favors gold more than the cryptocurrency when it comes to investment. 

In a recent interview with CNBC, the billionaire revealed that he owned a “very small amount of Bitcoin.” He also likened the flagship crypto to digital gold. However, Dalio asserted that if he’s forced to pick between gold and Bitcoin, he would prefer the former due to its long history as a “store hold of wealth.”

Ray Dalio Values Gold More Than Bitcoin

Dalio, a cryptocurrency skeptic, first admitted to owning Bitcoin in May this year. He has repeatedly shared concerns about the currency’s regulatory status, which kept him from pumping money into the asset. 

Nevertheless, Dalio still believes that Bitcoin is a valid approach to diversify one’s investments. “There are certain assets that you want to own to diversify the portfolio, and bitcoin is something like a digital gold,” he stated.

The billionaire investor has been a longstanding gold bull, based on his belief that the asset is both “risk-reducing and return enhancing.” Just last year, his hedge fund Bridgewater poured over $400 million into the precious metal in the second quarter. 

For Dalio, gold’s status as a limited physical commodity and its ability to hold value makes it a natural hedge against inflation. This argument is aided by the fact that central banks across the world currently hold over 35,000 metric tonnes of gold, which represents one-fifth of all gold mined until now.

Bitcoin’s Volatility Remains Key Concern

As many financial experts, Dalio is skeptical about Bitcoin’s volatility. For this reason, he has invested a small portion of his funds in the digital asset, since it’s difficult for him to determine its trajectory. 

“I just think of it as diversification,” he noted. “By and large, I don’t really know whether bitcoin is going to go up or down. I could argue both sides of that.”
He added that investors should be careful of where they put their money and “make the diversification global, not just in the United States.”
Dalio’s investment advice is in line with several financial experts who’ve held similar opinions about Bitcoin. And they’re not alone in warning investors about the possible downsides of the crypto market. In April, Federal Reserve chair Jerome Powell called cryptocurrencies “vehicles for speculation” that are “not really being used as actively for payments.”

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