Billionaire investor Ray Dalio clearly has a soft spot in his heart for bitcoin, but when it comes to gold, it looks like that soft spot gets even bigger. In a recent interview, Dalio was quick to claim that bitcoin is like a digital version of gold, but he still values the real thing over its digital counterpart.
Ray Dalio: Gold Is a Better Choice
In the interview, Dalio explains jokingly:
If you would put a gun to my head and you said, ‘I can only have one,’ I would choose gold.
Bitcoin has earned a hard-knock reputation over the past several years. While at first being viewed only as a speculative asset, the world’s number one digital currency took on new form during 2020 following the coronavirus pandemic, and in many ways, it is viewed through a similar light as one might view gold. The digital currency is now widely seen as a hedge tool; something that can potentially keep one’s wealth steady during times of economic strife.
Gold has been viewed this way throughout its entire existence, though to be fair, the precious metal has been around for centuries. By contrast, bitcoin is only around 12 years old, having first been mined in early 2009. For this reason, Dalio is a little more comfortable with the precious metal.
This doesn’t mean that he doesn’t care for bitcoin. In the interview, he admitted to owning a small amount of the asset, though he did state that he wasn’t entirely sold on it. He said:
I own a very small amount of bitcoin. I’m not a big owner. There are certain assets that you want to own to diversify the portfolio, and bitcoin is something like digital gold.
Dalio has always been a gold fan, recently writing on LinkedIn that placing gold in one’s portfolio would bring one towards a “risk-reducing and return-enhancing” environment. As the former co-CEO of Bridgewater Associates, Dalio saw his company pour more than $400 million into the precious metal during the second quarter of 2020.
Furthermore, central banks are far more partial to gold, and currently house about 35,000 metric tons of it. This, Dalio says, is a huge clincher given the anti-bitcoin attitude many banks have had over the years. He is also quite certain that a time may come when the federal government places a ban on BTC, which could present problems for investors down the line. By contrast, he doesn’t see any issues pertaining to gold in the coming years.
Taking Things Slow
For now, Dalio is open to bitcoin but doesn’t view it in grand form like so many other investors. He says:
I don’t think of it as diversification. By and large, I don’t really know whether bitcoin is going to go up or down. I could argue both sides of that.