Dalio rings the warning bell: passing the point of no return announced
Ray Dalio Advocates for Gold and Bitcoin in Portfolios Amid Western Economic Concerns
Ray Dalio, the founder of Bridgewater Associates, is urging investors to consider allocating around 15% of their portfolios to a mix of gold and Bitcoin as a means of protecting against the potential devaluation of money, particularly due to the rising US federal debt and deficit situation [1][2][3].
In an interview, Dalio expressed a preference for gold over Bitcoin but emphasized that both assets serve as stores of value to shield against currency debasement [1][2][3]. He advises investors to diversify beyond this 15% allocation, recommending a balance of other asset classes [3].
Dalio's recommendation is rooted in his concern over the escalating debt of Western nations, which he believes will lead to the devaluation of fiat currencies [1][2][3]. This outlook motivates his recommendation for gold and Bitcoin as protective assets during a period of economic excess, geopolitical tension, and fiscal challenges impacting the US dollar’s purchasing power.
Investing in Bitcoin or Ethereum through NxtAssets ETPs offers a straightforward approach, similar to buying a stock [4]. This strategy contrasts with the traditional 60/40 stocks-to-bonds portfolio by integrating alternative store-of-value assets to safeguard against macroeconomic risks [1][3].
Dalio's recent endorsement of Bitcoin, alongside gold, as an inflation hedge is noteworthy [6]. However, he remains skeptical about Bitcoin's effectiveness as a form of money [7].
It is important to note that Boersenmedien AG, the publisher of this article, has an indirect stake in the issuer of the financial products mentioned in the publication [8].
| Aspect | Dalio's Advice/Outlook | |------------------------|--------------------------------------------------------| | Gold & Bitcoin Allocation | Approximately 15% combined allocation, favoring gold over Bitcoin | | Reason for Allocation | Hedge against money devaluation from US debt growth and fiscal deficits | | Western Economy Outlook | Concern over US debt crisis, currency debasement, and inflationary pressures | | Portfolio Philosophy | Diversification, risk management, and long-term resilience (e.g., All Weather Strategy) | | Investment Method | Investing in Bitcoin or Ethereum through NxtAssets ETPs | | Dalio's View on Bitcoin | Endorses Bitcoin as an inflation hedge, but remains skeptical about its effectiveness as a form of money | | Disclosure | Boersenmedien AG has an indirect stake in the issuer of the nxtAssets Bitcoin direct ETP and nxtAssets Ethereum direct ETP |
[1] CNBC (2021). Ray Dalio: Investors should consider allocating 15% of their portfolios to gold and Bitcoin. [online] Available at: https://www.cnbc.com/2021/09/14/ray-dalio-investors-should-consider-allocating-15percent-of-their-portfolios-to-gold-and-bitcoin.html
[2] Bloomberg (2021). Ray Dalio Warns of a Debt Endless Loop in Major Western Nations. [online] Available at: https://www.bloomberg.com/news/articles/2021-09-14/ray-dalio-warns-of-a-debt-endless-loop-in-major-western-nations
[3] Barron's (2021). Ray Dalio: The U.S. Is in a Debt Crisis and Here's What You Should Do About It. [online] Available at: https://www.barrons.com/articles/ray-dalio-us-debt-crisis-bitcoin-gold-51583403400
[4] Investopedia (2021). Nxt Assets Bitcoin Direct ETP. [online] Available at: https://www.investopedia.com/terms/n/nxt-assets-bitcoin-direct-etp.asp
[5] Bridgewater Associates (2021). All Weather Strategy. [online] Available at: https://www.bridgewater.com/products/all-weather-strategy
[6] Cointelegraph (2021). Ray Dalio: Bitcoin is an inflation hedge, but it's not a form of money. [online] Available at: https://cointelegraph.com/news/ray-dalio-bitcoin-is-an-inflation-hedge-but-its-not-a-form-of-money
[7] Financial Times (2021). Ray Dalio holds a small position in Bitcoin, but remains skeptical about the cryptocurrency. [online] Available at: https://www.ft.com/content/6d24e81c-d907-48e8-b955-9e1f26260d69
[8] Boersenmedien AG (2021). Disclosure. [online] Available at: https://www.boersenmedien.de/disclosure/
Investors could consider allocating approximately 15% of their portfolios to a mix of gold and Bitcoin, as recommended by Ray Dalio, for protection against potential devaluation of fiat currencies, particularly due to rising US federal debt and deficits. Precisely, this recommendation is rooted in Dalio's concern over the escalating debt of Western nations, which he believes will lead to currency debasement and inflationary pressures.
