Hedge fund pioneer Ray Dalio has advised investors to dedicate approximately 15% of their portfolios to assets like gold or Bitcoin as a hedge against economic instability and US national debt concerns. The Bridgewater Associates founder significantly increased his recommended allocation to Bitcoin, which previously stood at 1-2%.
Dalio highlighted the unsustainable trajectory of US national debt, exceeding $37.1 trillion with a debt-to-GDP ratio of 123.2%, warning of potential fiscal crisis risks. The situation is expected to worsen with the government projected to issue $1.6 trillion in net new debt over the next two quarters.
While acknowledging Bitcoin’s advantages, including its limited supply and facilitation of global transactions, Dalio expressed skepticism about central bank adoption. He suggested central banks are unlikely to embrace Bitcoin due to potential government monitoring difficulties.
Despite Bitcoin’s perceived limitations, Dalio emphasized the value of both gold and Bitcoin as diversification tools within investment portfolios. He contends these assets offer crucial protection against potential currency devaluation stemming from deep economic uncertainty and mounting fiscal pressures.