Key Takeaways
- Ray Dalio referred to cryptocurrencies and blockchain as “a digital gold” in a CNBC interview today.
- He said that crypto has a place in the wider set of asset classes.
- The billionaire investor also confirmed that he holds a “tiny percentage” of his portfolio in Bitcoin.
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Ray Dalio has softened his views on crypto in recent years.
āA Digital Goldā
Famed investor and bestselling author Ray Dalio has likened Bitcoin and other cryptocurrencies to āa digital gold,ā the latest in a series of indications that his views on blockchain have profoundly shifted.
Speaking on CNBCās Squawk Box today, Dalio said that ācryptocurrencies and blockchainās great.ā Comparting crypto to other scarce commodities, such as precious metals, he claimed that Bitcoin and some of its peers would enjoy an important place among asset classes. āI think a digital gold, which would be a Bitcoin type of thing is something that, probably in the interest of diversification of finding an alternative to gold, has a little spot relative to gold and then relative to other assets,ā he said.
Dalio also expressed more philosophical questions on the nature of money, particularly productive assets in relation to fiat currencies, which have informed his thinking on cryptocurrencies. āI think that weāre in an environment where weāre going to ask āwhat is the new money?āā he said, āmeaning fiat currencies, and when we look at currencies, you hold currencies in the form of a debt.ā
He also recited his famous ācash is trashā dictum, arguing that all fiat currencies eventually decline in value next to goods and services. Dalio said, āwhen I say ācash is trash,ā what I mean is that all currencies in relation to the euro and the yen, all of those currenciesālike in the 1930sāwill be currencies that will go down in relationship to goods and services.ā
Remarking that āBitcoin has made a tremendous achievement over the last 11 years,ā Dalioās comments seem to further advance his image as a so-called crypto ābearā who has recently come around to the asset class. Dalio had taken a relatively negative stance on Bitcoin and crypto more generally until as recently as November 2020, when he admitted to āmissing somethingā about it on Twitter. Since then, however, he appears to have pulled a U-turn. In May 2021, Dailio revealed that he owned āsomeā Bitcoin as an inflationary hedge, a disclosure that was echoed in todayās interview when Dalio said that it made up āa tiny percentage of [his] portfolio.ā
Dalio cautioned against the idea of believing too firmly in a single asset class to the exclusion of others, however, arguing that āthe Bitcoin people get too preoccupied with it, and the gold bugs get too preoccupied with it, and I think you have to look at the broader set of assets.ā
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.Ā