In 2022, American billionaire Ray Dalio remains bullish about Bitcoin (BTC), citing three fundamental reasons for his optimism. He mentioned gold and Bitcoin as inflation hedges in a discussion with The Investors Podcast.
Thus, when asked by interviewer William Green what a reasonable allocation for a layperson would be; Dalio responded that he agrees with billionaire Bill Miller’s recommendation of 1%–2%.
He went on to say that the network has never been hacked, that it has no better competition. Also, that Bitcoin adoption rates indicate that it might continue to eat into gold’s market capitalization.
Over time, inflation hedging assets are likely to perform better
“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.”
During a recent interview with the podcast, Dalio reaffirmed statements made last year; speaking about his amazement that Bitcoin had lasted the past decade while reiterating that he is “not favorable to cash.”
The founder of hedge fund Bridgewater Associates did qualify his comments on Bitcoin’s ascent; pointing to the fanatism surrounding the Bitcoin movement as a potential Achilles heel. And, as one might expect from “Mister Diversification.”
Bitcoin is an alternative to gold for the younger generation
Recall that previously, Dalio called fiat money a problematic asset in a comment on Yahoo Finance. “That cash, which most investors think is the safest investment is. I think, the worst investment,” he said. According to Dalio, you should not judge the profitability of your assets in nominal terms.
Earlier, the billionaire said that Bitcoin is an alternative to gold for the younger generation. In addition, he noted that the blockchain revolution is inevitable, but some governments may outlaw it.
The billionaire doubted that the authorities of all countries of the world will eventually ban the first cryptocurrency. He found no reason to expect its inclusion as a reserve asset by central banks and large corporations.