Key Takeaways
- Ray Dalio warns of a looming global debt crisis.
- He advocates Bitcoin and gold over debt-based assets.
- Dalio suggests allocating 2% of portfolios to Bitcoin as a hedge.
Billionaire investor and Bridgewater Associates founder Ray Dalio has raised alarms about a looming global debt crisis, advocating for investments in hard assets like Bitcoin and gold over traditional debt-based instruments.
Speaking at a financial conference in Abu Dhabi on Dec. 10, Dalio pointed to unsustainable debt levels in major economies, including the U.S. and China.
Dalio emphasized that investors should avoid bonds and other debt assets. He explained:
It is impossible for these countries to be able to not have a debt crisis in the years ahead that will lead to a great decline of money value.
Five forces
Dalio suggested that the crisis would stem from “unprecedented levels” of indebtedness and highlighted five major forces shaping the global economy:
- debt,
- money,
- the economy,
- internal political dynamics,
- and external geopolitical factors.
Dalio stated:
I want to steer away from debt assets like bonds and have some hard money like gold and Bitcoin.
Initial skepticism
While Dalio was initially skeptical about Bitcoin’s viability, his stance has evolved.
In 2022, he recommended allocating up to 2% of investment portfolios to Bitcoin alongside gold as a hedge against inflation.
