Bridgewater Associates founder Ray Dalio has previously said he owns some bitcoin put a clearer number on it and say it’s been about 1% of his portfolio for some time.
However, the hedge fund mogul said bitcoin still faces significant structural challenges before it can realistically be considered a global reserve asset.
“I have a small percentage of bitcoin,” he told CNBC on Thursday. “I’ve had it forever, like 1% of my portfolio.”
Hindering its adoption as a reserve currency, Dalio said, are issues such as its traceability, transaction transparency and vulnerabilities in light of advances in quantum computing.
“I think the problem with bitcoin is that it will not be a reserve currency for large countries, because it can be traced, and it could be, with quantum computers controlled, hacked, and so on and so on,” Dalio said, stressing that governments will not adopt financial products that record in a public and permanent way.
Recently, Dalio urged investors to allocate 15% of their portfolios to bitcoin and gold, an asset he says he prefers. “The advantage of gold is that it’s an asset you can hold and you’re not dependent on someone giving it to you.”
More broadly, Dalio warned that the U.S. economy is nearly 80% of the way into a bubble similar to those that preceded the 1929 crash and the 2000 dot-com era collapse.
The multibillionaire hedge fund manager explained that his predictions come from his bubble indicator, which tracks data back to 1900. He said it tracks several metrics, including leverage, money supply and wealth concentration, to evaluate market vulnerability.
“The picture is pretty clear in that we are in that area of a bubble,” Dalio said.
