Ray Dalio Recommends 15% Portfolio Allocation to Gold or Bitcoin Amid US Debt Crisis

Ray Dalio, founder of Bridgewater Associates, recommends investors allocate 15% of their portfolio to either gold or Bitcoin due to the US's precarious fiscal situation and potential currency debasement. Dalio emphasizes the need for effective diversification and clarified that while he prefers gold, the real economic issue is the devaluation of fiat money. His balanced approach offers investors a solid foundation to profit in unexpected circumstances and mitigate risks.

Ray Dalio, the founder of Bridgewater Associates, has recently advised investors to allocate approximately 15% of their portfolios to either gold or Bitcoin. This recommendation comes at a time when the United States is grappling with a burgeoning debt crisis, which has led to concerns about currency debasement [1].

In a recent interview, Dalio expressed his apprehension about the looming US debt crisis. He pointed out that the US dollar is being undermined due to excessive borrowing and deficit spending, leading to currency debasement. "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 [1].

Dalio also emphasized the need for effective diversification in a portfolio, recommending allocating about 15% as a protective hedge. He clarified that although he has a preference for gold over Bitcoin, the real economic issue is the devaluation of fiat money, which is currently affecting markets and investors [1].

Bitcoin has emerged as a strategic hedge against monetary debasement. It shows a -0.29 correlation with the US dollar and has fixed supply advantages. Institutional adoption of Bitcoin ETFs and the 2024 halving event reinforce its legitimacy, though volatility remains a key risk factor [2]. Portfolio studies suggest that a 1-5% Bitcoin allocation can enhance risk-adjusted returns, particularly in equity-heavy portfolios during inflationary cycles [2].

President Donald Trump’s media group, Trump Media, made headlines when it purchased $2 billion in Bitcoin and securities. This move was part of a plan to become a Bitcoin treasury company, which could benefit investors if Bitcoin values continue to rise [3].

Investors should approach Bitcoin with a long-term lens, treating it as a satellite asset rather than a speculative bet. For those wary of direct ownership, Bitcoin ETFs provide a liquid, regulated alternative. Position sizing should reflect risk tolerance, with 1–5% allocations aligning with most diversified portfolios [2].

In conclusion, the U.S. dollar's weakening is not a temporary anomaly but a structural shift driven by fiscal profligacy and monetary policy divergence. In this new paradigm, Bitcoin's fixed supply and global accessibility make it a compelling tool for hedging against monetary debasement. While its volatility demands caution, its growing institutional adoption and historical performance suggest it is no longer a fringe asset. For investors seeking to future-proof their portfolios, Bitcoin's role as a strategic hedge is worth serious consideration [2].

References:
[1] https://www.benzinga.com/markets/guidance/25/08/47174990/heres-the-share-of-gold-or-crypto-ray-dalio-says-investors-should-hold
[2] https://www.ainvest.com/news/bitcoin-hedge-monetary-debasement-strategic-allocation-era-fiscal-uncertainty-2508/
[3] https://www.nasdaq.com/articles/trump-medias-2-billion-bitcoin-purchase-creates-stock-surge