Ray Dalio Recommends Investors Allocate 15% to Gold or Bitcoin, Says He Personally Holds a Small Amount of Bitcoin

BlockBeats News, July 28 — Billionaire Ray Dalio has advised investors to allocate 15% of their portfolios to Bitcoin and gold as a hedge against the mounting U.S. debt and economic instability.

Ray Dalio, founder of Bridgewater Associates, stated on the “Master Investor Podcast” that the macroeconomic risks posed by rising government debt in the U.S. and other countries have not yet been priced in by the market, and that the market could eventually face a significant downturn. “The U.S. government is spending 40% more than it earns and is unable to meaningfully cut expenditures. Its accumulated debt is six times its income, and annual interest payments have reached $1 trillion, which is half of its budget deficit.”

Dalio further explained that the U.S. government can only repay its debt by issuing more debt and through “the central bank (the Federal Reserve) printing money.” This creates a situation where the market could become increasingly panicked. Dalio believes that a new round of large-scale quantitative easing or government control over the Federal Reserve could trigger a major crash. He noted that signals of such events have already begun to “flash or flicker,” a view he also expressed in his recently published book, “How Nations Succeed and Fail.”

Since these risks have not yet been factored into market prices, Dalio recommends that investors allocate at least 15% of their portfolios to gold or Bitcoin as a hedge against fiat currencies and cash equivalents such as bonds. However, he personally has a “strong preference” for gold over Bitcoin, as he doubts any central bank would adopt cryptocurrency as a reserve currency. “Because everyone can see and track who is using it for what transactions, it offers no privacy at all.”

Dalio also noted that there are “doubts” about whether “the code can be cracked” or whether Bitcoin’s protocol could be changed, which would affect its “effectiveness” as a store of value. Given these concerns, gold is more important than Bitcoin in Dalio’s own portfolio. He said, “I have gold, and I have some Bitcoin, but not much.”