Ray Dalio — the billionaire founder of Bridgewater Associates, the world’s largest hedge fund managing around $150 billion in assets — recently shared some important advice for investors facing today’s economic uncertainty: consider putting about 15% of your portfolio in gold or Bitcoin.
This is a big shift from Dalio’s 2022 guidance when he suggested just 1–2% exposure to Bitcoin. The reason for the change? Growing concerns about the U.S.’s soaring national debt and the long-term risk of currency devaluation.
“If you were optimizing your portfolio for the best return-to-risk ratio, you would have about 15% of your money in gold or Bitcoin,” Dalio shared during a recent episode of the Master Investor podcast.
Why Ray Dalio Changed His Mind
The reason for Dalio’s pivot is simple yet alarming: America’s debt crisis has reached a tipping point. “The United States is in a debt spiral,” Dalio explained. “When you look at the math, it’s pretty scary.”
Here’s what’s keeping him — and many investors — up at night:
- Record National Debt: The U.S. national debt recently surpassed $37 trillion — that’s roughly $108,000 per American.
- Accelerating Borrowing: The Treasury plans to issue $12 trillion in new debt over the next year
- Unsustainable Interest Payments: The government now spends more on interest payments than on national defense
- Currency Devaluation Risk: As debt spirals higher, the dollar’s purchasing power faces serious long-term threats
The “Debt Doom Loop” Explained
Dalio describes a “debt doom loop”—a vicious cycle where the government must borrow more and more just to pay the interest on existing debt. This cycle leads to two major risks:
- The dilution of dollar value in circulation, reducing purchasing power.
- Heightened risk of a currency crisis or inflation spike.
Recent Treasury data confirms this pattern: the massive borrowing needed to keep the government running is growing rapidly, signaling tough times ahead for the dollar.
Gold vs. Bitcoin: Dalio’s Take on Both
Dalio has long been a vocal supporter of gold, but his growing acceptance of Bitcoin marks a notable evolution.
Why Dalio Loves Gold:
- A 5,000-year track record as a reliable store of value.
- Favored by central banks worldwide, which hold over 35,000 tons.
- Tested through wars, pandemics, and economic crises.
- No counterparty risk — physical gold doesn’t depend on any institution.
Why Dalio Now Includes Bitcoin:
- Digital scarcity: Only 21 million bitcoins will ever exist.
- Decentralized: No government can print more or control it.
- Increasing institutional adoption by major companies.
- Portable wealth that can cross borders easily.
That said, Dalio also cautions about Bitcoin’s transparency — transactions are public, which may limit privacy — and potential security vulnerabilities. Still, he personally owns some Bitcoin and encourages investors to hold a mix.
“The specific ratio of Bitcoin to gold is up to you,” he said. “But having both is a smart move in today’s environment.”
Final Thoughts: Time to Rethink Your Portfolio Allocation?
If you’ve been hesitant about adding gold or Bitcoin to your portfolio, Dalio’s updated advice makes a strong case to reconsider.
With the U.S. debt now topping $37 trillion and borrowing needs accelerating, protecting your wealth is more important than ever. Whether you lean on gold’s millennia-long legacy, Bitcoin’s digital innovation, or both, allocating around 15% of your portfolio to these hard assets can help you balance risk and safeguard your purchasing power.
