Billionaire Ray Dalio is the founder of Bridgewater Associates, the world’s largest hedge fund, and he shared his investment strategy with cryptocurrencies as part of his portfolio. He warned that cash is the worst investment because it will be eaten away by inflation.

Ray Dalio’s investment advice: cash depreciation, portfolio diversification

Ray Dalio, founder of Bridgewater Associates, shared his investment strategy last week. He currently serves as the Chairman and Co-Chief Investment Officer of Bridgewater Associates. His company’s clients include endowment funds, governments, foundations, pension funds and sovereign wealth funds.

In an interview with Yahoo Finance published on Friday, he explained that he sees cryptocurrencies as “an alternative currency in an environment where the value of cash actually depreciates.” When it comes to Bitcoin, he believes:

I think it’s impressive that this kind of programming still exists in the past 10 or 11 years. It has not been hacked and so on. It has an adoption rate.

When asked how worried he was about inflation, Dalio replied: “I am very worried. Because of the amount of money and credit that must be produced and budgeted, this is a big increase.”

The billionaire pointed out that “cash is rubbish” and added: “Most investors think cash is the safest investment, but I think it is the worst investment. This is important because it loses purchasing power.” He pointed out, “Cash, just like this year, you will lose 4% or 5% due to inflation. So pay attention to those, because I believe that will be the worst investment.” The boss of Bridgewater Associates continued:

One thing I want to say to investors is not to judge your returns or assets by nominal value, that is, the amount of dollars you own. From the perspective of inflation-adjusted U.S. dollars.

Dario continues to talk about diversity. “I attach great importance to diversification,” he said, adding, “It is important to diversify one’s investment portfolio, because we know from the surprises in balance.”

He elaborated: “We also know that, on average, these asset classes perform significantly better than cash, and the way they move between them is related to correlation, because when things go down—when the economy goes down—then bonds Will perform better than stocks, and so on.”

The billionaire believes that cryptocurrencies like Bitcoin can help diversify investment portfolios. “I think encryption is only a small part of it. And the message to be conveyed is that cash will become a problematic asset and hold other diversified asset portfolios,” he added, emphasizing:

Continue to look at the actual situation, not the nominal aspect. And this diversification should also come from the international diversification of countries, not just asset classes, in order to have a truly diversified investment portfolio.

Regarding cryptocurrency, he previously admitted that he owns Bitcoin (Bitcoin). According to reports, this week he said that he also owns ether (Ethereum). “I don’t have a lot,” he said, but did not disclose which cryptocurrency or how much he owns.

In an interview with Marketwatch last week, the founder of Bridgewater Associates said:

I am not a Bitcoin expert, but I think it has some advantages as a small part of the portfolio.

“Bitcoin is like gold, even though gold is a mature blue chip alternative to fiat currency,” he further believes.

Despite this, Dario warned: “Bitcoin has many other problems. If it poses a threat to the government, it may be banned in some places when it becomes relatively attractive. It may not be at all All places are banned. I don’t believe that central banks or major institutions will hold a lot of money in them.”

What do you think of Ray Dalio’s investment advice and comments on Bitcoin? Please let us know in the comments section below.

Kevin Helms

As an Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.