The billionaire investor sees hard assets as a buffer against inflation and long-term currency erosion
Hedge fund billionaire Ray Dalio has recommended that investors allocate 15% of their portfolios to Bitcoin or gold, citing growing concerns over inflation, ballooning US debt, and long-term currency devaluation.
Dalio issued the advice during an interview on the Master Investor podcast on Sunday, warning that traditional fiat assets may no longer offer reliable protection.
“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,” he said, while adding that he still “strongly prefers gold to Bitcoin”, though the exact split is “up to you”.
Dalio’s comments mark a notable shift from his 2022 recommendation of just 1% to 2% in Bitcoin.
They also come amid growing fiscal pressure, with the U.S. national debt already at $36.7 trillion, and the Treasury Department opening up PayPal and Venmo donations to help lower it.
The Treasury also projects $1 trillion in new borrowing for Q3, which is $453 billion more than previously estimated. This will be followed by an additional $590 billion in Q4 to fund budget shortfalls.
Fiscal pressures are fueling a shift toward alternative stores of value
Dalio warned that the US may need to issue as much as $12 trillion in Treasuries over the next year to cover rising debt servicing costs.
“The issue is the devaluation of money,” he said, pointing to what he called a “debt doom loop” impacting not just the US, but other developed economies like the United Kingdom as well.
While Dalio remains cautious about Bitcoin’s role as a global reserve currency, citing its transparent ledger and lack of privacy, he acknowledged that it can still serve as an effective diversifier.
“Governments can see who is doing what transactions on it,” he noted, raising concerns about its adoption by central banks.
Gold and Bitcoin outperform as investor confidence in fiat weakens
Bitcoin is currently trading at around $118,000, just 4% below its all-time high of $123,230 reached in mid-July, according to TradingView.
Gold has also reached record levels in recent months, reinforcing the attractiveness of both assets as a non-sovereign store of value in periods of macroeconomic uncertainty.
Dalio also noted that similar debt-driven pressures are playing out across other major economies, making the case for holding hard assets increasingly global rather than just within the United States.
