Billionaire investor Ray Dalio is impressed with bitcoin, the largest cryptocurrency by market value, and its blockchain.
"It has been an amazing accomplishment for bitcoin to have achieved what it has done, from writing that program, not being hacked, having it work and having it adopted the way it has been," Dalio, founder of the world's largest hedge fund, Bridgewater Associates, told MarketWatch on Wednesday.
"I believe in the blockchain technology. There's going to be that revolution, so it has earned credibility."
Dalio reconfirmed that he owns "a little bit" of bitcoin, calling it "almost a younger generation's alternative to gold," he said. "Bitcoin is like gold, though gold is the well established blue-chip alternative to fiat money."
Similarly, bitcoin supporters see the asset as a digital gold, a store of value and a hedge against inflation.
"It has no intrinsic value, but it has imputed value, and it has therefore some merit," Dalio said.
By design, there is a limited supply of bitcoin. This scarcity is central to why bitcoin bulls argue for holding the cryptocurrency long-term — as demand increases and supply declines, its value could theoretically appreciate.
However, Dalio continues to be concerned about the possibility of governments outlawing it.
"Bitcoin has a number of other issues. If it is a threat to governments, it will probably be outlawed in some places when it becomes relatively attractive," he said. "It may not be outlawed in all places. I don't believe that central banks or major institutions will have a significant amount in it."
But, experts say it'd be quite difficult for a government to effectively ban bitcoin.
"I don't think even a concerted effort among different countries and different central banks could actually shut down bitcoin," James Ledbetter, editor of fintech newsletter FIN and a CNBC contributor, previously told CNBC Make It. "I don't think that's technologically possible. But there are ways that bitcoin could be regulated."
Nonetheless, "I'm not an expert on bitcoin," Dalio told MarketWatch, "but I think it has some merit as a small portion of a portfolio."
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Don't miss: Billionaire Ray Dalio says he owns bitcoin, and its 'greatest risk is its success'
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