Ray Dalio Recommends 15% Portfolio in Bitcoin or Gold

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New York,  Hedge fund billionaire Ray Dalio has advised investors to consider allocating up to 15% of their portfolios into Bitcoin or gold amid growing concerns over the United States’ escalating debt crisis.

Speaking on the Master Investor podcast, Dalio explained that this strategy aims to maximize the return-to-risk ratio in a time of rising inflation and currency 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,” said Dalio, who founded Bridgewater Associates, one of the world’s largest hedge funds.

Dalio emphasized that while he favors gold over Bitcoin, both assets serve as stores of value. “I have some Bitcoin, but not much,” he noted, leaving the exact distribution between the two assets to individual investor discretion. This marks a notable shift from his earlier position in 2022, when he recommended just a 1% to 2% Bitcoin allocation.

His comments come as the US national debt hits a staggering $36.7 trillion, according to data from the US Treasury. Dalio pointed out that the devaluation of money remains a critical issue. “The government is likely to issue another $12 trillion in Treasurys to finance debt,” he warned.

Supporting Dalio’s concerns, a new US Treasury report published Monday revealed that the federal government expects to borrow an additional $1 trillion in Q3, a sharp increase of $453 billion over previous estimates. The report cites reduced cash inflows and lower reserves as primary factors. Furthermore, borrowing is projected to continue with an expected $590 billion in Q4.

These figures highlight the growing dependence of the US economy on debt to manage its fiscal obligations, which may undermine long-term currency strength.

Dalio’s 15% recommendation for gold or Bitcoin is seen as a hedge against such macroeconomic instability, aligning with similar warnings from other financial experts.