Dalio: Bitcoin Cannot Be Compared to Gold

Source: Global Market Broadcast

Ray Dalio has a clear stance in the debate between gold and bitcoin: the billionaire and Bridgewater Associates founder believes that no asset can replace gold. Speaking on the All-In Podcast on Tuesday, Dalio compared the two asset classes and explained why he believes they are fundamentally different in nature, and why this is important for investors.

Over the past year, gold prices have risen significantly, while bitcoin has declined. Dalio believes that the two are not the same type of safe-haven asset. "There is only one gold in the world," he said, referring to comments that frequently compare bitcoin to gold.

Dalio's concerns about bitcoin are more fundamental: central banks around the world will never buy or hold bitcoin in the same way as they do gold. In his view, bitcoin is more of a risk asset rather than a hedge. When markets are under pressure, investors tend to sell bitcoin and buy gold instead.

"5% to 15% of a portfolio should be allocated to gold," Dalio suggests, "When things really go wrong, it acts as a buffer. When other assets are underperforming, gold often does well."

Just last month, he referred to gold as "the safest currency," even as gold prices were just recovering from a historic drop at the time. He stated, "Individuals, businesses, and nations should all ask themselves: Do we have enough gold?" If gold accounts for less than 5% of a portfolio, the likely answer is no.