Ray Dalio Still Owns Bitcoin, but Says Traceability and Quantum Threat Are Concerns

Bridgewater Associates founder Ray Dalio, who has in the past has said he owns some bitcoin BTC$92,123.27, put a clearer figure on it, saying it’s been about 1% of his portfolio for some time.

However, the hedge fund mogul said bitcoin still faces significant structural challenges before it can realistically be considered a global reserve asset.

“I have a small percentage of bitcoin,” he told CNBC on Thursday. “I’ve had it forever, like 1% of my portfolio.”

Hindering its adoption as a reserve currency, said Dalio, are issues such as its traceability, transactional transparency and vulnerabilities in light of the progress of quantum computing.

“I think the problem of bitcoin is it’s not going to be a reserve currency for major countries because it can be tracked and it could be, conceivably with quantum computing controlled, hacked, and so on and so forth,” Dalio said, stressing governments will not adopt financial products that record in a public and permanent way.

Recently, Dalio called on investors to allocate 15% of their portfolios to bitcoin and gold, an asset which he says he prefers. “The advantage of gold is that it’s an asset you can hold, and you’re not dependent on someone to provide it.”

In a broader sense, Dalio warned the U.S. economy is nearly 80% of the way into a bubble similar to those that preceded the 1929 crash and the dot-com era collapse of 2000.

The multi-billionaire hedge fund manager explained his predictions come from his bubble indicator, which tracks data going back to 1900. He said it tracks multiple metrics, including leverage, money supply, and wealth concentration, to evaluate market vulnerability.

“The picture is pretty clear, in that we are in that territory of a bubble,” Dalio said.