Top investor Ray Dalio has again sung Bitcoin’s praises. But only a little bit.
The billionaire hedge fund boss said in his latest essay that he expected “non-government-produced monies like gold and bitcoin to do relatively well” as government debt grows.
Dalio, who founded one of the world’s largest hedge funds, Bridgewater Associates, has long warned investors about the size of America’s debt. U.S. national debt passed the $40 trillion mark this week.
“As general advice, I suggest diversifying well in asset classes and countries that have strong income statements and balance sheets and are not having great internal political and external geopolitical conflicts, underweighting debt assets like bonds, and overweighting gold and a bit of Bitcoin,” Dalio wrote.
He added that major economies like the U.K., U.S., Europe, and Japan all have similar debt and deficit problems and therefore assets like bitcoin — which are not issued by governments — could end up benefiting.
Dalio has gone from saying he wouldn’t invest in Bitcoin over the years to finally admitting it was in his portfolio.
Last year, Dalio said that bitcoin only made up 1% of his investments. He reiterated that point this year, and warned that although no one can print more bitcoin, it can be hurt by quantum computing advances.
Back in 2020, the billionaire investor said that the cryptocurrency was too volatile to use as money but that it was worth holding a little bit. Gold, on the other hand, should be held by all investors, he added.
Dalio’s latest essay explains that when governments over-borrow and central banks respond by printing money to cover the gap between debt supply and demand, the value of the currency gets debased.
Bitcoiners have long argued that the oldest cryptocurrency can work as a hedge against government printing, just like gold.
And Bitcoin has in the past benefited from governments expanding their money supplies.