Here’s what the founder of the world’s largest hedge fund would choose

by James · April 4, 2023

The price of Bitcoin and gold rose in March after Silicon Valley Bank presided over a series of bank failures and liquidity crises. Few analysts were surprised by these price movements as both are used to bypass banks and other centralized financial institutions. The question is, which is a better choice in the current economic climate?

Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, has weighed in on the great debate about Bitcoin vs. gold or digital gold vs. real gold. Few were surprised to hear his opinion, as he is known for his bullish stance on gold. In an interview with Fox Business’ Maria Bartiromo, Dalio expressed that he much prefers gold to Bitcoin, although he said he has a small amount of Bitcoin.

Dalio has further soured on Bitcoin since the interview, saying that Bitcoin “has no relation to anything” and that it receives disproportionate attention. Dalio believes that Bitcoin’s status as a form of digital gold remains unproven, citing concerns that it is too volatile to be money or a store of value. He recognizes the potential of blockchain technology; he just doesn’t think Bitcoin will be the winner.

In contrast, gold is stable because it has been a reliable store of value and medium of exchange for thousands of years. Its stability, scarcity and intrinsic value make it a reliable asset for preserving wealth.

Dalio has emphasized that he is not opposed to cryptocurrencies in general, but remains skeptical of their ability to replace gold. He has previously stated that he owns “some Bitcoin,” but his personal investments in the digital asset have been limited compared to his gold holdings.

One of the main arguments against Bitcoin as a store of value is its volatility. Although the digital asset has seen a tremendous increase in value over the past decade, it has also experienced significant price fluctuations. In contrast, the price of gold has remained relatively stable, giving investors a safer option to preserve their wealth.

Another concern Dalio has raised is the possibility of government intervention in the cryptocurrency market. In a recent podcast, he warned that “in history, they’ve banned gold and they’ve banned silver and so on, and they might ban Bitcoin.” He is not the only one who expects the world’s governments to try to shut down a currency they have no control over until it replaces their own.

As governments around the world begin to pay more attention to digital assets, there is a growing risk of regulatory intervention that could affect Bitcoin’s value and use. Gold, on the other hand, is less likely to face such intervention because it is a physical resource, it already plays a large role in the global economy and would be extremely difficult to ban. It can also provide unique exposure to things like volatility and fear in the markets, making it a popular tool for diversification and hedging.

Investors are turning to gold and silver in droves to protect their portfolios as uncertainty rises in the economy. Check out Benzinga’s precious metals hubs for top gold and silver dealers, including Advantage Gold, American Hartford Gold, Lear Capital and Red Rock Secured. With this information in hand, you can master the sector and find some of the best and most reliable precious metals dealers.

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This article Bitcoin vs. gold: Here’s what the founder of the world’s largest hedge fund would choose appeared originally on Benzinga.com