American billionaire and hedge fund manager Ray Dalio has suggested allocating 15% of a portfolio to Bitcoin or gold to achieve the “best return-to-risk ratio,” especially given the U.S.’s growing debt and weakening dollar.
While Dalio admitted he owns “some Bitcoin,” he still “strongly prefers gold.” He added that how investors divide the 15% between Bitcoin and gold is a personal choice, Speaking on the Master Investor podcast on Sunday.
This recommendation is a notable shift from his January 2022 advice, when he suggested only a 1% to 2% allocation to Bitcoin.
“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.”
Ray Dalio
While Dalio sees Bitcoin as a useful asset for portfolio diversification, he remains unconvinced that it could ever become a global reserve currency. He questioned whether any central bank would adopt Bitcoin in that role, pointing to its lack of privacy and the fully transparent nature of its transactions as major obstacles.
Bitcoin Backed by Dalio Amid Soaring U.S. Borrowing Needs
Dalio’s remarks come amid growing concerns over America’s national debt, which has surged to $36.7 trillion, according to U.S. Treasury data.
A Treasury report released on Monday supports Dalio’s warning. It revealed that the U.S. plans to borrow an additional $1 trillion in the third quarter, $453 billion more than earlier estimates, citing weaker cash flow and declining reserves.
The Treasury also expects to borrow another $590 billion in the fourth quarter, highlighting the government’s increasing dependence on debt to cover its spending and deepening worries about its long-term fiscal outlook.
