Ray Dalio, an American billionaire and a healing fund manager, recommended having about 15% of his portfolio in gold or Bitcoin (BTC) such as coverage against the devaluation of money in the midst of a debt -oriented crisis.
While Dalio stressed that he personally promotes gold on Bitcoin, he stressed that the two assets serve as crucial hedges in an environment where traditional currencies lose value.
Ray Dalio’s portfolio suggestion: gold or bitcoin as safe shelters
In the latest appearance on the Podcast Master Investor, the founder of Bridgewater Associates also recognized that he has both gold and bitcoin. However, he did not disclose the specific amount.
Regarding the BTC, Dalio added that he had “a little bitcoin but not much”. He also pointed out that assets serve as effective diversifiers against the devaluation of money.
“If you were neutral on everything, in other words, you did not have a point of view and you optimize your wallet for the best risk-to-risk ratio, you would have about 15% of your gold or bitcoin money,” he said.
In addition, Dalio noted that Bitcoin has certain advantages, such as its limited diet and its ability to be treated worldwide with relative ease. However, he expressed doubts about the viability of Bitcoin as a reserve currency.
His concerns include the transparency of Bitcoin transactions, which could allow governments to monitor activities and the possibility that Bitcoin code can be compromised or modified.
“I doubt that any central bank takes it as a reserve currency because everyone can understand and look. Governments can do which transactions.
However, the 15% portfolio allocation recommendation marks a huge change compared to its 2022 recommendation from only 1 to 2% in the largest cryptocurrency. This updated suggestion comes in the midst of increasing concerns concerning public debt.
According to the latest data from the American debt clock, the national debt amounts to 37.1 billions of dollars, with a debt / GDP ratio of 123.2%. The billionaire also stressed that the American government spends much more than it collects.
He stressed that the government will probably have to issue nearly 12 dollars of new treasury bills next year to respond to its growing debt.
Dalio stressed that we are approaching the end of a long -term debt cycle, where debt accumulation becomes too heavy to manage without triggering a crisis. He pointed out that such a scenario would likely lead to an increase in interest rates, a depreciating currency and a fall in the stock market, because the market reacts to the increase in debt levels and the lack of effective solutions.
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