Bitcoin holder Ray Dalio dives into ether and admires cryptocurrencies as he considers cash to be the ‘worst investment’

Hedge funds titan Ray Dalio has portrayed digital currency as “impressive,” as he affirmed he holds ether notwithstanding bitcoin and said money may very well be the “worst investment.” The extremely rich person investor was a skeptic about the bitcoin “bubble” for a really long time, however a change of heart this year saw him purchase the main cryptocurrency. On Thursday, in a Yahoo Finance talk with, Dalio uncovered he’s additional ether to his portfolio, yet said he doesn’t hold a tremendous piece of either bitcoin or ethereum’s local token. Dalio — the founder and co-chief investment official of the world’s greatest hedge fund, Bridgewater Associates — told Yahoo he’s a huge advocate of diversification, and cryptocurrencies make up “a relatively small part” of his portfolio. He clarified why he thinks digital resources are a good investment.

“I view it as an alternative money in an environment where the value of cash money is depreciating in real terms,” he said.
“And I think it’s very impressive that for the last 10-11 years, that programming has still held up. It hasn’t been hacked and so on. And it has an adoption rate.”

“I’m not going to give the precise amount of bitcoin or — but I do own some ethereum, as well,” he told Andy Serwer. “I don’t own a lot of it.”

Financial mainstream adoption of bitcoin is continuing to grow. Meanwhile, the promise of decentralized finance, or DeFi — to cut traditional banks and other middlemen out of transactions — has boosted interest in ethereum.

So far this year, bitcoin and ether have risen 62% and 420%, respectively, according to data from TradingView. But they have pulled back recently, with bitcoin trading 3.5% lower and ether down 5.4% on Friday.
Those developments have silenced or changed the minds of crypto critics such as Howard Marks, as well as Dalio himself.

The cryptocurrencies soared to new record highs in November, as institutional money started flowing into the digital token economy.

Problematic asset
The billionaire, who’s previously compared cash to trash, reiterated his dislike for fiat money by calling it the poorest investment. The debasement of fiat money — a result of governments’ unprecedented fiscal stimulus to help economies through the pandemic — has made assets like bitcoin look more inflation-resistant, he argued.
“Cash — which most investors think is the safest investment — is I think, the worst investment,” Dalio said in the interview.

“Don’t judge anything in your returns or your assets in nominal terms, in terms of how many dollars you have. View it in terms of inflation-adjusted dollars,” he added.
“And so cash — like, this year, you’ll lose 4% or 5% to inflation. And so pay attention to those, because I believe that that’ll be the worst investment.”

In November, the rate of inflation in US consumer prices reached its highest level in nearly 40 years. Dalio, who has called cash a “very bad asset,” noted sky-high inflation would whittle away at its buying power.
“The message is: cash is going to be a problematic asset,” he said. “Hold that other diversified portfolio of assets — keep it, looking at it in real terms, not nominal terms. And that diversification should be also international diversification from countries, not just asset classes, in order to have a truly well-diversified portfolio.”

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• Bitcoin holder Ray Dalio dives into ether and admires cryptocurrencies as he considers cash to be the ‘worst investment’
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