Billionaire investor Ray Dalio advised a 15% portfolio allocation to Bitcoin (CRYPTO: BTC) or gold, citing mounting U.S. debt concerns and potential currency devaluation risks.
What Happened: The Bridgewater Associates founder warned of a “classic devaluation” scenario similar to the 1970s or 1930s in an appearance on the Master Investor Podcast, where fiat currencies could decline together against hard assets.
“If you were neutral on everything and optimizing your portfolio for the best return-to-risk ratio, you would have about 15% of your money in gold or Bitcoin,” Dalio stated.
Dalio expressed a strong preference for gold over Bitcoin, previously describing the precious metal as the “purest play” for a store of value. Gold currently ranks as the second-largest reserve currency globally after the U.S. dollar, he noted. The billionaire holds both assets but maintains significantly larger gold positions than Bitcoin allocations.
Why It Matters: The veteran investor highlighted critical fiscal challenges facing the United States. Federal government debt stands at 125% of GDP, with the fiscal deficit reaching 7% of GDP—the highest among industrialized nations.
Dalio proposed a “3% solution” requiring immediate action to reduce the deficit from 7.5% to 3% of GDP through combined tax increases and spending cuts.
While acknowledging Bitcoin’s perceived value as alternative money with limited supply and global transaction benefits, Dalio questioned its effectiveness as a reserve currency.
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