Ray Dalio, Billionaire Investor, Said He "Might Be Missing" Something On Bitcoin
Bitcoin this week got a star-power boost when Maisie Williams (Arya Stark in HBO’s “Game of Thrones”) asked her 2.7 million Twitter followers whether she should invest in the coin. The inquiry prompted answers from noted crypto investor Mike Novogratz as well as Tesla Inc.’s Elon Musk.
Bitcoin has seen an average daily move of 2.6% this year compared with swings of 0.9% for the price of gold.
On Tuesday, billionaire investor Ray Dalio said that he "might be missing" something about Bitcoin as it burst through the $17,000 mark (first time in over 2 years).
“It’s not very good as a store-hold of wealth because its volatility is great and has little correlation with the prices of what I need to buy,” the billionaire founder of Bridgewater Associates said.
“I can’t imagine central banks, big Institutional investors, businesses or multinational companies using it,” Dalio added. “If I’m wrong about these things I would love to be corrected.”
Bitcoin advanced for a third session on Tuesday (the digital coin is up close to 150% in 2020), getting closer to its record highs of 2017 (almost $20,000) that resulted in a violent crash. It went above $18,000 and then fell more than 6%, before recovering to about $18,150.
“Markets are drawn to round numbers,” said Antoni Trenchev, co-founder and managing partner of Nexo in London, which bills itself as the world’s biggest crypto lender. “Since we passed $16,000, the next stop was $18,000. Now it’s $20,000.”
Fidelity Investments launched a Bitcoin fund over the summer. Macro investor Paul Tudor Jones is buying the coin as a hedge against potential inflation. In October PayPal Holding Inc. said it would allow customers to access cryptocurrencies.
“We’re overextended here and due for pullback,” said Vijay Ayyar, head of business development with crypto exchange Luno. “Anywhere from between $18,000-$19,000 is potentially a top. We should have many people selling at these levels, especially those that bought at the top in 2017-18. Major rallies in the past always had 30-40% corrections. No reason to believe this time is different.”
“Bitcoin has consistently been one of the world’s top-performing assets since its creation,” said Mati Greenspan, founder of Quantum Economics. “This latest surge comes as larger players enter the market sapping up what little supply remains for sale.”
But the institutional embrace has been slow and the Justice Department said this month it is suing for the forfeiture of more than $1 billion in Bitcoins it says are linked to the criminal marketplace Silk Road (shut down seven years ago).
Hugo Rogers, chief investment officer at Deltec Bank & Trust, bought Bitcoin when it traded around $9,300 in June and has add it to his portfolio since. Bitcoin now makes up about 5% of his Global Absolute Return Fund, which is big on high-growth tech and biotech companies. He’s probably not going to stop at the 5% threshold, he said.
“A small position in Bitcoin can go a long way,” Rogers said by phone earlier this month. “There’s a lack of an alternative in real assets that can show a comparable return. If you’re going to diversify your portfolio anyway, this is a good place to go.”