(Kitco News) – Even with Bitcoin trading above $100,000 and a crypto-friendly U.S. administration taking office in the new year, legendary investor and Bridgewater Associates founder Ray Dalio still chooses gold.
"I have a small percentage of my portfolio in crypto," Dalio said in a recent interview with Investopedia editor-in-chief Caleb Silver. "I prefer gold."
Dalio added that his exposure to both cryptocurrencies and precious metals is driven by the necessity of holding alternative forms of money.
Bitcoin and gold have both enjoyed banner years, with King Crypto gaining 130% in 2024, while gold is up nearly 32% year-to-date.
Despite Bitcoin outpacing gold by 400%, Dalio said he chooses gold as the premiere alternative currency because he believes crypto still faces unique challenges.
“The reason I'm concerned about crypto is, first of all, privacy,” Dalio said. “The government knows exactly what you've got, where it is, and it's also an effective way of taxing it.”
Dalio said that while Bitcoin has “merit to it,” the number-one crypto has yet to fully “prove itself.” He’s also unconvinced that Bitcoin is a tried-and-true hedge against inflation.
“The reliability of crypto in terms of, let's say, saying, ‘Does it correlate with inflation? Does it correlate with those things?’ No, it doesn't really, not well,” he said. “It's still largely a speculative vehicle.”
He added that unlike gold, Bitcoin probably won’t become a major reserve currency anytime soon.
“It's not likely to be a reserve for a currency, it won't work,” Dalio said. "Gold is still the third-largest reserve currency: the U.S. dollar, the euro, gold, and then Japanese yen. So I prefer gold.”
