Bridgewater Associates founder Ray Dalio, who has previously stated that he owns some bitcoin, clarified that it’s been about 1% of his portfolio for quite some time.
However, the hedge fund mogul mentioned that bitcoin still faces significant structural challenges before it can realistically be considered a global reserve asset.
“I have a small percentage of bitcoin,” he said. “I’ve had it forever, like 1% of my portfolio.”
Dalio noted that issues such as traceability, transactional transparency, and vulnerabilities in light of advancements in quantum computing hinder bitcoin’s adoption as a reserve currency.
“I think the problem with bitcoin is that it won’t become a reserve currency for major countries because it can be tracked and could, conceivably, be controlled or hacked,” Dalio emphasized, stressing that governments will not adopt financial products that maintain a public and permanent record.
Recently, Dalio called on investors to allocate 15% of their portfolios to bitcoin and gold, the latter of which he prefers. “The advantage of gold is that it’s an asset you can hold, and you’re not dependent on someone to provide it.”
In a broader sense, Dalio warned that the U.S. economy is nearly 80% of the way into a bubble similar to those preceding the 1929 crash and the dot-com era collapse of 2000.
The multi-billionaire hedge fund manager explained that his predictions come from a bubble indicator which tracks data dating back to 1900, evaluating market vulnerability based on multiple metrics, including leverage, money supply, and wealth concentration.
“The picture is pretty clear, in that we are in that territory of a bubble,” Dalio stated.
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