Crypto-Mastermind summary:

  • Formerly critical of crypto, Bridgewater Associates CIO Ray Dalio spoke positively about Bitcoin in a Reddit discussion a few days ago.

  • Dalio considers Bitcoin an additional diversification option to limited assets such as gold and similar investments.

  • In 2020, Bitcoin became attractive to many big-name investors, in no small part due to concerns about the global financial situation.


Over the course of the crisis-ridden 2020, many views and opinions have changed. This also affects the crypto-scene and Bitcoin in particular. Not only retail investors are rethinking the composition of their portfolios, but also more and more institutional investors. While just a year ago for many Bitcoin was a pure bubble with no real value, opinions have now changed significantly for the most part. One example is the change of thinking of billionaire hedge fund manager and longtime Bitcoin-critic Ray Dalio.


Manager of world’s biggest hedge fund opens up to Bitcoin

The American investor co-founded Bridgewater Associates in 1985 and remains its co-CIO (chief investment officer) today. He is among the 100 most influential people, according to Time magazine. His hedge fund is the largest in the world, with $140 billion in assets under management.

When it comes to Bitcoin, he didn’t believe in it for a long time and had been sceptical even last month on Twitter. In the past, he justified his doubts on the one hand with the high volatility, which in his view would make Bitcoin a poor medium of exchange and not a store of value. He also feared a ban if the cryptocurrency really catches on.

For Dalio, the most relevant factor is whether central banks are interested in the assets he invests in. He does not see this factor with Bitcoin. But he already indicated a first change in thinking on Twitter last month, when he wrote:

„I might be missing something about Bitcoin … I can’t imagine central banks, big institutional investors, businesses or multinational companies using it … If I’m wrong about these things I would love to be corrected.“

Dalio

Dalio advocates limited and mobile assets

In a so-called „ask me anything“(AMA) session on Reddit a few days ago users had the opportunity to discuss financial topics and also talk about the US financial policy with Dalio.

His answer on one of the questions, which was if Bitcoin could be „a potential answer to the issue that the global new world fiat monetary system has caused“ was quite impressive. He said:

„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) storeholds of wealth.“

The billionaire added that he believes it is especially important to own some of the assets in his portfolio that are limited and mobile. He opined that „not enough people are doing that.“ Bitcoin and some other digital currencies could also serve as diversification to gold and similar asset stores, in his opinion. However Dalio still favors gold over Bitcoin:

„As for 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.“

It is worth noting, however, that by now continuous large and well-known investors are praising Bitcoin at least as a diversification option. Even the CEO’s of major banks like BlackRock CEO Larry Fink or Standard Chartered CEO Bill Winters are speaking out pro-Bitcoin. A year ago, such statements would have been the exception, but it seems that changes of opinion of this kind are becoming more and more frequent.


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