Even though he's invested in crypto, Ray Dalio, legendary investor and founder of hedge fund Bridgewater Associates, says he prefers gold.
“I have a small percentage of my portfolio in crypto,” In a recent conversation, Dalio explained to Investopedia editor-in chief Caleb Silver that his interest in alternative money forms is driven by a need for people to consider them. “I prefer gold.”
Both gold and bitcoin have hit multiple record highs in this year. However, the digital currency is currently up 125% since 2024 whereas the precious metal has only risen 30%. Digital currency prices have risen in recent months, especially since the election of Donald Trump. Investors expect that the new White House will support crypto and Congress.
What is the reason that Dalio gravitates more toward precious metal?
Dalio’s Concerns about Crypto
"So the reason I'm concerned about crypto is, first of all, privacy, the government knows exactly what you've got, where it is, and it's also an effective way of taxing it," said Dalio.
Anonymity was a key selling point for cryptocurrency in its early days. As rules evolved, this is no longer true for cryptocurrency as an investment, or for those who use it to make a purchase. There are also tax implications.
Dalio has also questioned the notion, which some have made, that Bitcoin can act as a hedge to rising inflation.
"The reliability of crypto in terms of, let's say, saying, 'Does it correlate with inflation? Does it correlate with those things?' No, it doesn't really, not well. It's still largely a speculative vehicle," he said.
Dalio said also that unlike gold, crypto is not likely to become a major currency reserve anytime soon.
"It's not likely to be a reserve for a currency, it won't work," Dalio said. "Gold is still is the third largest reserve currency: the U.S. dollar, the euro, gold, and then Japanese yen. So I prefer gold."
Dalio said that while there's "merit to it," bitcoin "still has to prove itself."
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