Billionaire investor Ray Dalio has made waves in the financial world once again, urging investors to consider allocating a substantial 15% of their portfolios to Bitcoin and gold. The founder of Bridgewater Associates expressed his concerns over the United States’ spiraling debt and the looming threat of long-term currency devaluation during a recent appearance on the Master Investor podcast.
A Shift in Strategy
Dalio’s comments represent a significant departure from his previous stance in 2022, where he recommended a modest 1–2% allocation to Bitcoin. The driving force behind this shift? A “debt doom loop” that Dalio warns could have severe repercussions for the U.S. economy. With a projected $12 trillion in new Treasury issuance looming over the next year to service the nation’s staggering $36.7 trillion debt, the situation appears dire.
The U.S. Treasury echoed Dalio’s concerns on Monday, revealing plans to borrow an additional $1 trillion in the third quarter, surpassing earlier forecasts by $453 billion. The fourth quarter doesn’t look much better, with an estimated borrowing of $590 billion. As explored in our recent coverage of Bitcoin’s rally on US deficit concerns, these fiscal challenges are a key driver for Bitcoin’s recent price movements.
Gold vs. Bitcoin: The Debate Continues
While Dalio advocates for a 15% allocation to these assets, he remains partial to gold over Bitcoin. Both, he says, serve as “effective diversifiers” when fiat currencies are at risk of losing value against hard assets. However, Dalio’s endorsement of Bitcoin comes with a caveat. He remains skeptical about its viability as a reserve currency, pointing out potential issues with blockchain transparency and surveillance.
“Governments can see who is doing what transactions on it,” Dalio noted, highlighting concerns that any code-level vulnerabilities could dent Bitcoin’s credibility as an alternative currency. Despite these reservations, he admits to owning “some Bitcoin” himself, though he leaves the precise allocation between BTC and gold up to individual investors.
Market Implications
The cryptocurrency market, already a hotbed of volatility, has reacted to Dalio’s updated position with a mix of intrigue and skepticism. Bitcoin, trading just over $118,000 in Asian markets on Tuesday, continues to be a focal point for investors seeking refuge from traditional market uncertainties. This follows a pattern of significant inflows into crypto funds, as detailed in our analysis of recent $3.7B inflows.
According to crypto analyst Sarah Mitchell, Dalio’s endorsement could serve as a catalyst for renewed interest in Bitcoin among institutional investors. “Dalio’s influence in the investment community can’t be overstated,” she remarked. “His pivot towards Bitcoin could be a game-changer, especially for those sitting on the fence about digital assets.”
Yet, not everyone is convinced. Financial strategist Mark Rutherford warns that while Dalio’s concerns about debt are valid, the volatility inherent in Bitcoin remains a sticking point. “It’s a high-risk, high-reward scenario,” Rutherford said, adding that the market could still see significant fluctuations in the coming months.
What Lies Ahead?
As the U.S. grapples with an unprecedented debt load, the debate over asset allocation grows ever more critical. Dalio’s bold recommendation raises questions about the future of traditional investments and the role of alternative assets like Bitcoin and gold in a rapidly changing economic landscape.
The path forward is fraught with uncertainty. Will more investors heed Dalio’s advice and pivot towards Bitcoin and gold? And if they do, can these assets provide the stability that traditional markets seemingly lack? As we move deeper into 2025, these are the questions that will likely dominate financial discussions, with Dalio’s insights serving as a guiding—if not definitive—voice in the conversation.
Source
This article is based on: Billionaire Ray Dalio Backs 15% Allocation to Bitcoin and Gold Amid U.S. Debt Spiral
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
