Ray Dalio: Allocating up to 2% of your portfolio to bitcoin is reasonable


According to billionaire investor Ray Dalio, it’s reasonable for everyday investors to hold a small amount of bitcoin, the largest cryptocurrency by market value.

So how much exactly?

On a recent episode of the We Study Billionaires podcast, Dalio was asked by co-host William Green whether allocating 1% to 2% of one’s portfolio to bitcoin was reasonable.

“I think that’s right,” Dalio replied.

Dalio owns “a little bit” of bitcoin himself, he previously disclosed.

Dalio acknowledges that bitcoin has “pros and cons”: Though it has become prominent, he told Green he has concerns about the government outlawing the cryptocurrency and about its use in ransomware attacks.

That’s in part why his stance on the cryptocurrency isn’t “black and white,” Dalio said.

Dalio also touched on the fact that bitcoin is seen as a digital gold and hedge against inflation by its supporters. He said it can be compared to gold, because, by design, there is a limited supply of bitcoin.

“I think over time, inflation-hedge assets are probably likely to do better,” Dalio told Green. “That’s why I’m not favorable to cash and those types of things.”

Diversification is extremely important, Dalio told Green. But even when it comes to bitcoin, “one wonders, when does somebody take the money they made in bitcoin and then diversify that? There are other things that are developing, not only other coins, but nonfungible tokens and other things that become popular with that crowd. Does that diversify [bitcoin]?”

Nonetheless, as Dalio said in December, bitcoin “has some merit as a small portion of a portfolio.”

Sign up now: Get smarter about your money and career with our weekly newsletter

Don’t miss: Billionaire Ray Dalio: Bitcoin is like ‘a younger generation’s alternative to gold’ and has ‘merit’

Products You May Like

Articles You May Like

Top Wall Street analysts like these stocks for maximum returns
Biden administration rolls out a blueprint for a ‘renters bill of rights’ – Here’s what it includes
McDonald’s profit grows as inflation-weary customers flock to its restaurants
Southwest CEO maps out a recovery after holiday meltdown: ‘We have work to do’
GM smashes expectations and guides toward a strong 2023, despite margin squeeze

Leave a Reply

Your email address will not be published. Required fields are marked *