Fears of an escalating global debt crisis have prompted renowned hedge fund manager Ray Dalio to re-evaluate his stance on Bitcoin (BTC), now advocating for its inclusion in investment portfolios. Dalio, founder of Bridgewater Associates, is urging investors to allocate a portion of their assets to BTC as a safeguard against potential dollar devaluation, driven by the rapidly increasing U.S. national debt.
On "The Master Investor Podcast," Dalio articulated his concern that current market valuations do not fully account for the significant macroeconomic risks posed by burgeoning government debts, particularly in the United States. He pointed out that the U.S. government is spending 40% more than its income and struggles to cut expenses. Furthermore, the accumulated national debt is six times the annual revenue, with annual interest payments alone reaching $1 trillion—half of the budget deficit.
Dalio explained that the government's only viable options to manage this debt are to issue more debt or rely on the Federal Reserve to print more money. This scenario, he believes, could eventually trigger a major market downturn, potentially exacerbated by another round of quantitative easing or even government intervention in the Federal Reserve.
In such an environment, Dalio suggests that Bitcoin and gold become increasingly attractive as vehicles for preserving wealth. Given that these risks are not yet "priced into markets," he advises investors to allocate at least 15% of their portfolios to either gold or Bitcoin as hedges against devaluing fiat currencies.
However, Dalio clarified his personal preference, stating he "strongly prefers" gold over Bitcoin. He raised concerns that central banks are unlikely to adopt Bitcoin as a reserve currency due to its lack of privacy, with all transactions being publicly visible. He also expressed "doubts" regarding the security of Bitcoin's code and the potential for its protocol to be altered, which could diminish its effectiveness as a store of value. For these reasons, Dalio stated, "I have gold and I have some Bitcoin, but not much," indicating gold's superior role in his own portfolio.
July 2025, Cryptoniteuae