Hedge fund titan urges investors to hedge against dollar devaluation with Bitcoin and gold
American billionaire and Bridgewater Associates founder Ray Dalio is advising investors to consider allocating up to 15% of their portfolio into Bitcoin or gold as the U.S. national debt spirals and the dollar faces ongoing devaluation.
“If you were optimizing your portfolio for the best return-to-risk ratio, you would have about 15% of your money in gold or Bitcoin,” Dalio said during a recent episode of the Master Investor podcast.
This marks a significant shift from Dalio’s earlier guidance. In January 2022, he suggested just 1% to 2% exposure to Bitcoin. Now, he’s signaling that digital and traditional stores of value deserve a larger role in asset allocation strategies.
Gold Preferred, But Bitcoin Still on the Table
While Dalio admits to owning “some Bitcoin,” he still “strongly prefers gold” as the better hedge against macroeconomic instability. However, he emphasized that the exact ratio between Bitcoin and gold is up to individual investors.
U.S. Debt Hits $36.7 Trillion — And Climbing
Dalio’s comments come as the U.S. national debt exceeds $36.7 trillion, with projections pointing to even more borrowing on the horizon. He warned that the U.S. government will likely need to issue another $12 trillion in Treasurys over the next year to service its debt.
“The issue is the devaluation of money,” he said, pointing to inflationary pressures and overreliance on debt issuance.
Treasury Report Confirms Looming Fiscal Trouble
Supporting Dalio’s concerns, a recent U.S. Treasury report forecasted $1 trillion in new borrowing in Q3 — $453 billion more than earlier estimates — due to weakened cash flows and reduced reserves. An additional $590 billion is expected in Q4, deepening fears of a long-term debt doom loop.
Global Currencies Also at Risk
Dalio added that other Western economies, including the United Kingdom, are facing similar fiscal challenges. He argued that their fiat currencies will likely underperform against harder assets like Bitcoin and gold, calling them “effective diversifiers.”
Skepticism Remains Around Bitcoin as Reserve Currency
Despite recommending Bitcoin as a hedge, Dalio remains unconvinced of its potential to become a global reserve currency. He cited privacy concerns and transparency of transactions as major roadblocks for central bank adoption.
“Governments can see who is doing what transactions,” he said, warning that any vulnerability in Bitcoin’s code could undermine its utility as a monetary alternative.
Bitcoin and Gold Reach New Highs
Both assets have surged amid economic uncertainty. Bitcoin is currently trading at $118,100, just 4% below its all-time high of $123,230 from July 14, according to TradingView. Meanwhile, gold has repeatedly broken record levels in recent months, reflecting investor demand for safe-haven assets.
