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

Legendary hedge fund manager Ray Dalio is encouraging investors to allocate up to 15% of their portfolios to store-of-value assets like Bitcoin and gold, citing mounting concerns over America’s escalating national debt and the weakening US dollar.

Why Dalio Recommends Bitcoin and Gold

Speaking on the Master Investor podcast, the Bridgewater Associates founder explained that if you want the “best return-to-risk ratio,” a 15% allocation split between Bitcoin and gold makes sense in today’s environment. While Dalio clarified he personally holds more gold than Bitcoin, he left the exact division between the two assets up to individual investors.

This recommendation marks a notable shift from his previous advice in January 2022, Dalio advocated a modest 1–2% allocation to Bitcoin. Now, with the US debt spiraling to $36.7 trillion and the Treasury preparing to issue another $12 trillion in new government bonds, Dalio warns of the increasing risk of currency devaluation.

“The issue is the devaluation of money,” Dalio said, highlighting that government borrowing will likely accelerate, making traditional fiat assets less attractive for wealth protection.

US Fiscal Outlook Drives “Debt Doom Loop” Worries

• US Treasury data reveals the national debt hit $36.7 trillion, with more borrowing on the horizon due to weak cash flow and dwindling reserves.
• The Treasury’s latest projections show an extra $1 trillion in borrowing this quarter $453 billion more than expected plus another $590 billion likely in Q4.
• Dalio compared America’s predicament to other Western economies like the UK, warning that reliance on debt could trap these nations in a “debt doom loop” as their currencies lose ground against hard assets.

Bitcoin and Gold as Portfolio Diversifiers

Dalio sees both Bitcoin and gold as effective diversifiers against the risks of fiat currency devaluation, especially as global economic uncertainty persists. Both assets have recently demonstrated resilience, with:

• Bitcoin trading near $118,100, just 4% below its recent all-time high.
• Gold hitting new record highs multiple times in recent months.

Still Cautious on Bitcoin as a Reserve Currency

Despite advocating for Bitcoin as a portfolio hedge, Dalio remains skeptical it will ever become a true reserve currency. He points to concerns over transparency, traceability, and the possibility that central banks may never adopt it as a global monetary standard. “Governments can see who is doing what transactions on it,” Dalio warned, noting that privacy limitations and potential code vulnerabilities could limit Bitcoin’s effectiveness as a replacement for government-backed money.

Dalio’s latest guidance highlights a growing trend among global investors: turning to alternative assets like Bitcoin and gold to navigate fiscal uncertainty and protect long-term wealth.