Global Debt Soars, Ray Dalio Turns to Bitcoin and Gold

Crypto News Cryptocurrencies

Written by Aaron S.,

Editor-In-Chief

Last Updated: December 10, 2024

Key Takeaways

Ray Dalio warns of a debt crisis, urging investments in hard assets like Bitcoin and gold to hedge against currency devaluation;
Dalio highlights debt, money supply, and geopolitical dynamics as key forces shaping the global economy’s uncertain future;
He advises diversifying portfolios, allocating up to 2% to Bitcoin and gold, while avoiding risky debt-based investments like bonds.

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Global Debt Soars, Ray Dalio Turns to Bitcoin and Gold

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Highlighting unsustainable debt levels across major economies, including the US and China, Ray Dalio, the founder of Bridgewater Associates, emphasized the need to shift investments toward hard assets such as Bitcoin BTC $87,100.78 and gold.

Dalio identified debt as one of the five primary forces shaping the global economy, alongside money supply, economic conditions, internal political order, and external geopolitical dynamics.

He urged investors to focus on these larger forces rather than reacting to the "twists and turns" of daily news.

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In 2022, Dalio suggested allocating up to 2% of a portfolio to Bitcoin alongside gold to hedge against inflation, though he has also highlighted the importance of not relying on any single asset class.

Speaking at a financial event in Abu Dhabi, Dalio addressed the trajectory of global debt. He pointed out that the scale of borrowing among major economies has reached “unprecedented levels” and warned of the potential consequences.

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”.

To counteract the risks associated with debt-based assets like bonds, Dalio recommended hard money alternatives. He stated:

I want to steer away from debt assets like bonds and debt and have some hard money like gold and Bitcoin.

As investors like Ray Dalio turn to Bitcoin for stability, others remain skeptical of its role in the global economy. Recently, Peter Schiff, a longtime critic of cryptocurrency, urged Joe Biden to eliminate the US government’s Bitcoin holdings. Why is Schiff so determined to ditch Bitcoin? Read the full story.