According to billionaire investor Ray Dalio, it’s reasonable for everyday investors to hold a small amount of bitcoin, the largest cryptocurrency by market value.

So how much exactly?

On a recent episode of the We Study Billionaires podcast, Dalio was asked by co-host William Green whether allocating 1% to 2% of one’s portfolio to bitcoin was reasonable.

“I think that’s right,” Dalio replied.

Dalio owns “a little bit” of bitcoin himself, he previously disclosed.

Dalio acknowledges that bitcoin has “pros and cons”: Though it has become prominent, he told Green he has concerns about the government outlawing the cryptocurrency and about its use in ransomware attacks.

That’s in part why his stance on the cryptocurrency isn’t “black and white,” Dalio said.

Dalio also touched on the fact that bitcoin is seen as a digital gold and hedge against inflation by its supporters. He said it can be compared to gold, because, by design, there is a limited supply of bitcoin.

“I think over time, inflation-hedge assets are probably likely to do better,” Dalio told Green. “That’s why I’m not favorable to cash and those types of things.”

Diversification is extremely important, Dalio told Green. But even when it comes to bitcoin, “one wonders, when does somebody take the money they made in bitcoin and then diversify that? There are other things that are developing, not only other coins, but nonfungible tokens and other things that become popular with that crowd. Does that diversify [bitcoin]?”

Nonetheless, as Dalio said in December, bitcoin “has some merit as a small portion of a portfolio.”

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