Ray Dalio Recommends 15% Portfolio Allocation to Bitcoin or Gold Amid U.S. Debt Concerns
Key highlights:
Ray Dalio recommends allocating 15% of a portfolio to Bitcoin or gold, up from his previous 2% suggestion.
He cites mounting U.S. and global debt as a key reason for shifting toward hard assets.
Despite supporting Bitcoin as a diversifier, Dalio remains skeptical of its use as a reserve currency.
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Ray Dalio, founder of the hedge fund Bridgewater Associates, advises investors to allocate about 15% of their portfolios to Bitcoin or gold to optimize the risk-reward ratio amid the ongoing U.S. debt crisis.
In an appearance on the Master Investor podcast, Dalio stated:
"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."
Dalio increases Bitcoin recommendation from 2% to 15%
Dalio mentioned that he personally holds “a little bit of Bitcoin,” but he continues to “strongly favor gold over Bitcoin.” He added that the precise allocation between Bitcoin and gold should be tailored to individual investors’ preferences.
The recommended 15% allocation marks a notable increase from the 1% to 2% Bitcoin exposure he previously recommended back in January 2022.
These comments come amid growing concerns about America’s sovereign debt, which has recently passed $36.7 trillion, according to data from the U.S. Department of the Treasury. Dalio highlighted that the U.S. government is expected to issue an additional $12 trillion in Treasury bonds over the next year to service this mounting debt.
The U.S. national debt. Image source: FiscalData
Treasury Department forecasts confirm fears
A U.S. Treasury Department report, published on July 28, forecasts borrowing of $1 trillion in the third quarter—$453 billion more than earlier estimates—due to weakening cash flows and declining reserves. The agency also expects borrowing of $590 billion in the fourth quarter, signaling increased reliance on debt to fund government spending.
Dalio pointed out that other Western countries, such as the U.K., are facing similar “debt noose” challenges. He predicts that their currencies will continue to underperform hard assets like Bitcoin and gold, which he refers to as “effective diversifiers.”
Skepticism about Bitcoin as a reserve currency
Despite his support for Bitcoin as a portfolio diversifier, Dalio remains skeptical about its viability as a reserve currency. He doubts any central bank would adopt the cryptocurrency in this role because of its lack of privacy and the transparent nature of its transactions.
“Governments can see who is making what transactions,” Dalio explained, adding that potential vulnerabilities in Bitcoin’s code might also undermine its strength as an alternative currency.
Safe-haven assets display strength
Both Bitcoin and gold have shown strong performance in the current economic environment, hitting new highs recently. Bitcoin trades roughly 4% below its all-time high of $123,230 recorded on July 14. Gold has reached new record levels multiple times over recent months.
Gold's performance since January 1, 2025.
Dalio’s recommendations underscore increasing worries about the sustainability of U.S. public finances and reflect investors’ growing search for ways to shield capital from currency devaluation. Increasing allocation to safe-haven assets like Bitcoin and gold may provide an effective hedge against today’s macroeconomic challenges.
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