Bitcoin News Today: Ray Dalio Endorses 15% Allocation To Bitcoin And Gold To Hedge Against Mounting US Debt

Billionaire Ray Dalio, founder of Bridgewater Associates, has advised investors to allocate 15% of their portfolios to Bitcoin and gold as a safeguard against escalating U.S. debt and potential currency devaluation. His comments, made during an interview on The Master Investor Podcast, highlight growing concerns about macroeconomic risks stemming from government spending and fiscal policies. Dalio noted that the U.S. government spends 40% more than it collects in revenue, accumulating a debt six times its annual income, with interest payments alone amounting to $1 trillion yearly—half the annual budget deficit [1].

The hedge fund magnate emphasized that such risks are not yet fully priced into financial markets, which could lead to a significant correction if conditions worsen. He warned that the government relies on issuing more debt and central bank money printing to sustain its finances, creating a scenario where markets might face a “huge crash” if quantitative easing intensifies or the government intervenes in the Federal Reserve’s operations. In this environment, he argued that Bitcoin and gold could serve as effective hedges against fiat currency erosion.

While advocating for a 15% allocation to either asset, Dalio expressed a personal preference for gold over Bitcoin. He cited privacy concerns, noting that Bitcoin’s transparent ledger allows full visibility into transactions, making it unsuitable as a central bank reserve asset. Additionally, he raised doubts about Bitcoin’s long-term viability as a store of value, questioning whether its code could be compromised or altered to diminish its effectiveness [1]. Despite these reservations, Dalio acknowledged holding “some Bitcoin” and revealed that he first purchased the cryptocurrency in 2021.

The recommendation reflects a broader shift in institutional investment strategies as concerns about debt sustainability and inflationary pressures mount. Bitcoin, now seen as a digital counterpart to gold, and the time-tested precious metal are increasingly viewed as tools to diversify portfolios in an era of monetary overstimulation. Critics, however, remain skeptical of Bitcoin’s volatility and gold’s limited yield, arguing that both may be suboptimal for large-scale allocations. Nevertheless, Dalio’s stance underscores a pragmatic approach to balancing caution with adaptability, offering investors a structured framework to navigate potential economic shocks.

The implications of Dalio’s guidance extend beyond portfolio management. His endorsement could accelerate institutional adoption of Bitcoin, bolstering its legitimacy as a hedging asset. For gold, the recommendation reinforces its role as a crisis asset, though it may face competition from Bitcoin in a rapidly evolving financial landscape. As central banks test the limits of quantitative easing and fiscal stimulus, the demand for non-correlated assets is likely to persist, particularly in scenarios where inflation accelerates or currencies depreciate.

Dalio’s strategy highlights the growing recognition of alternative assets in defensive investing. While equities and bonds remain core holdings, the inclusion of Bitcoin and gold could provide a buffer against tail risks. However, challenges remain, including regulatory uncertainties for cryptocurrencies and logistical hurdles in managing physical gold. For now, Dalio’s 15% threshold offers a pragmatic guideline, reflecting a calculated response to an era defined by fiscal experimentation and monetary innovation.

Source: [1] [title: Billionaire Ray Dalio Endorses 15% Allocation To Bitcoin And Gold To Hedge Against Mounting US Debt] [url: https://zycrypto.com/billionaire-ray-dalio-endorses-15-allocation-to-bitcoin-and-gold-to-hedge-against-mounting-us-debt/]