‘A flood of money and credit’ — Ray Dalio new Bitcoin praise echoes MicroStrategy

Bitcoin (BTC) can provide safety towards the “depreciating worth of cash,” newly-bullish investor Ray Dalio says.

In a Reddit “Ask Me Something” session on Dec. 8, Dalio, who final month deserted his skepticism of Bitcoin, stated that the cryptocurrency might complement gold as an funding.

Dalio: Bitcoin “may very well be diversifier to gold”

“I believe that bitcoin (and another digital currencies) have during the last ten years established themselves as attention-grabbing gold-like asset alternate options, with similarities and variations to gold and different limited-supply, cellular (in contrast to actual property) storeholds of wealth,” he wrote.

“So it might function a diversifier to gold and different such storehold of wealth belongings.”

Dalio make clear his opinion of varied elements of the worldwide economic system, together with the present U.S. place, China and the state of fiat forex.

Bitcoin 90-day returns correlation with main macro belongings. Supply: Digital Property Information

Persevering with, he argued that cash printing would spur asset inflation, implying that merely holding wealth in money would result in losses.

“We’re in a flood of cash and credit score that’s lifting most asset costs and distributing wealth in a means that the system that we have come to consider is regular is unable to, and that’s threatening to the worth of our cash and credit score,” he warned.

“Almost definitely that flood won’t recede, so these belongings won’t decline when measured within the depreciating worth of cash. It is very important diversify nicely by way of currencies and nations, in addition to asset courses.”

A well-known BTC bull case

His perspective conspicuously mimics that of Bitcoin proponents, notably Michael Saylor, CEO of MicroStrategy, who’s guiding the corporate in direction of BTC reserves of practically $1 billion.

Saylor, in an interview with “The Bitcoin Commonplace” writer Saifedean Ammous in September, burdened that asset inflation was far outstripping that of money, and that enormous paper cash holdings have been thus akin to a “melting ice dice.”

Bitcoin priced in gold 2-year chart. Supply: xe.com

Dalio thus departs additional and farther from his Bitcoin-skeptic place simply weeks in the past, which started to thaw when he admitted that he “could also be lacking one thing” about its true nature. Nonetheless, he stopped in need of advocating a “full Bitcoin” portfolio.

“The primary factor is to have a few of these sort of belongings (with restricted provide, which can be cellular, and which can be storeholds of wealth), together with shares, in a single’s portfolio and to diversify amongst them. Not sufficient folks try this,” he reasoned.