Bridgewater Associates founder Ray Dalio, who in the past said he owns some bitcoins. He put a clearer figure on that, saying it’s been about 1% of his portfolio for some time.
However, the hedge fund magnate said bitcoin still faces significant structural challenges before it can realistically be considered a global reserve asset.
“I have a small percentage of bitcoins,” he told CNBC on Thursday. “I’ve had it forever, like 1% of my portfolio.”
What hinders its adoption as a reserve currency, Dalio said, are issues such as its traceability, transactional transparency and vulnerabilities in light of the progress of quantum computing.
“I think the problem with bitcoin is that it’s not going to be a reserve currency for major countries because it can and could be tracked, possibly with quantum computing, controlled, hacked, etc.,” Dalio said, emphasizing that governments will not adopt financial products that they record publicly and permanently.
Recently, Dalio asked investors to allocate 15% of their portfolios to bitcoin and gold, an asset he says he prefers. “The advantage of gold is that it is an asset that you can hold and you don’t depend on someone to provide it to you.”
More broadly, Dalio warned that the U.S. economy is about 80% of the way to a bubble similar to those that preceded the crash of 1929 and the dot-com era crash of 2000.
The billionaire hedge fund manager explained that his predictions come from his bubble indicator, which tracks data dating back to 1900. He said it tracks multiple metrics, including leverage, money supply and wealth concentration, to assess market vulnerability.
“The picture is pretty clear: We are in bubble territory,” Dalio said.
