Ray Dalio: Bitcoin deserves a portion of the portfolio

Ray Dalio has revealed his investment strategy, which includes Bitcoin. 

Inflation, according to Ray Dalio 

Billionaire Ray Dalio is the founder of the world’s largest hedge fund, Bridgewater Associates, as well as president and co-Chief Investment Officer (CIO). His firm serves clients such as governments, foundations, pensions, and sovereign wealth funds.

Last week, he gave an interview to Yahoo Finance in which he talked about his investment strategies. 

During this interview, he said he was very concerned about the high level of inflation that has reached, so much so that he considers fiat money to be a bad investment at the moment. He was also concerned about the bond market, as bond prices usually fall during periods of inflation.

In particular, he pointed out that many people may be misled by the fact that their assets are increasing in price because, with the erosion of purchasing power due to inflation, they may actually become poorer. Those most affected are precisely those with cash in their wallets.

He stated: 

“Cash, which most investors think is the safest investment, is, I think, the worst investment, and that is important because it loses buying power.” 

He then focused on portfolio diversification. 

Bitcoin in Ray Dalio’s investment strategy 

In such a scenario, Dalio argues that Bitcoin can help precisely in diversifying portfolios. 

He said: 

“I view crypto as a small piece of that. And the message is cash is going to be a problematic asset, and hold that other diversified portfolio of assets.”

He also stated that he owns both BTC and ETH while admitting to owning just a few of them. 

For Dalio, Bitcoin has similarities to gold, considered to be:

“The well-established blue-chip alternative to fiat money.” 

On the other hand, however, he states that Bitcoin has a number of problems that gold does not, particularly should it become a threat to governments (as in China). 

Therefore, in a historical moment of very high inflation, it is better to diversify the portfolio and not to keep your savings in fiat currency. Cryptocurrencies, and in particular Bitcoin, can help the investor to diversify into assets that are not negatively affected by the consequences of inflation.