Another Billionaire Wall Street Legend Has Changed His Tune On Bitcoin

Bitcoin’s reputation as digital gold has surged this year, helped by the contrast created through huge central bank money printing intended to offset the economic damage of the coronavirus pandemic.

The bitcoin price, currently bouncing around $18,000 per bitcoin, has climbed back to its late-2017 all-time highs—up more than double from January.

Now, after warning last month that bitcoin could soon be “outlawed,” Ray Dalio, the legendary billionaire founder and co-chairman of the world’s biggest hedge fund, Bridgewater Associates, has admitted bitcoin’s now established itself as a “gold-like asset alternative.”

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“I think that bitcoin (and some other digital currencies) have over the last ten years established themselves as interesting gold-like asset alternatives, with similarities and differences to gold and other limited-supply, mobile (unlike real estate) storeholds of wealth,” Dalio posted to social news website Reddit in response to a question asking whether bitcoin could help combat the U.S. wealth inequality that may have been exacerbated by central bank stimulus measures.

Dalio, who famously branded bitcoin a “bubble” in 2017, appears to have changed his mind on whether bitcoin can act as a store of value.

“[Bitcoin’s] not an effective storehold of wealth because it has volatility to it, unlike gold,” Dalio said in a September 2017 CNBC interview, just before bitcoin’s huge end of year boom and subsequent bust. The bitcoin price soared to around $20,000 in late 2017 after beginning the year at under $1,000. The price crashed back to around $3,000 in 2018.

Dalio, posting in a Reddit so-called “ask me anything” Q&A session this week, advised investors to diversify their portfolios with assets that are “limited supply, that are mobile, and that are storeholds of wealth,” adding: “Not enough people do that.”

“As [for] bitcoin relative to gold, I have a strong preference for holding those things which central banks are going to want to hold and exchange value in when they are trying to transact,” Dalio wrote.

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As recently as January of this year, Dalio was still unconvinced of bitcoin’s ability to act as a store of value.

“There’s two purposes of money, a medium of exchange and a storehold of wealth, and bitcoin is not effective in either of those cases now,” he said, speaking at the 2020 World Economic Forum in Davos, Switerzland.

Last month, there were signs Dalio might be…