Bridgewater Associates, and the founder of the world’s largest hedge fund, Ray Dalio, gave a more optimistic outlook on bitcoin than his remarks that made headlines last month.
He compared Bitcoin to gold and said that as a store of wealth, they all have similarities. After Dalio bashed bitcoin last month for lack of adoption, high volatility, and ambiguous regulatory status, the latest comments came as a surprise.
The American investor added that bitcoin seems like a healthy fund diversification option as buyers will introduce the world’s leading cryptocurrency along with conventional items such as stocks and commodities to their investment pool.
On Tuesday, Dalio said in a Reddit Ask Me Something (AMA) that he figured bitcoin and other cryptocurrencies over the last ten years had “established themselves” and were fascinating “gold-like asset alternatives.”
The billionaire hedge fund manager also noted that cryptocurrencies share gold and different “limited-supply, mobile (unlike real estate) stockholdings of wealth” similarities and distinctions.
“I think that bitcoin (and some other digital currencies) have over the last ten years established themselves as interesting gold-like asset alternatives, with similarities and differences to gold and other limited-supply, mobile (unlike real estate) store holds of wealth. So, it could serve as a diversifier to gold and another such store hold of wealth assets. The main thing is to have some of these assets (with limited supply, mobile, and that are strongholds of wealth), including stocks, in one’s portfolio and diversify among them. Not enough people do that. As far as bitcoin relative to gold, I have a strong preference for holding those things which central banks are going to want to hold and exchange value in when they are trying to transact,” Dalio said.
Dalio’s remarks changed from a month earlier when he said that bitcoin and other cryptocurrencies have three fundamental problems: a shortage of venues that accept digital objects as payment, market instability, and the opportunity for regulators to “outlaw” them.
During the AMA, Dalio also said he had a “strong preference” for reserves that central banks might like to keep and use to exchange value when compared bitcoin to gold. He continued to elaborate that he has “a deep sense of responsibility,” which is what drives him to partner with “those I work with and our investors and their beneficiaries.”
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