Ray Dalio Advocates Bitcoin and Gold as Inflation Hedges Amid U.S. Debt Surge

Bitcoin has gone from a routine decentralized medium of exchange to become one of the most valuable assets in the world. And as with any apex asset, the OG coin has witnessed massive global interest from both corporate bodies and regional powers. Top industry stakeholders are now calling for an increased portfolio inclusion of the first-born crypto, highlighting it as a store of value amid the rising U.S. debt profile.

Bitcoin and Gold Emerge as Inflation Hedges

Founder of Bridgewater Associates, Ray Dalio, has identified Bitcoin and gold as top assets to own as the U.S. continues to battle increased debt and inflation. In a Sunday podcast, Dalio said investors aiming to get the best returns should balance their portfolio with 15% of Bitcoin or gold .

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

In 2022, the Bridgewater Associates founder recommended just 1 to 2% in Bitcoin holdings for investors. However, he has since revised his stance amid the growing concern over what he calls the “debt doom loop.” Dalio noted that the U.S. plans to issue $12 trillion in new Treasury bonds over the next year to help cover the costs of its $36.7 trillion national debt.

Latest data from the U.S. Treasury report further explained this ongoing trend. As per the Monday reports, the government is projected to borrow $1 trillion in Q3 , $453 billion more than previous estimates. Another $590 billion is expected to be borrowed in Q4.

Ray Dalio Highlights Cautious Optimism on BTC as Fiat Concerns Grow

Although Dalio still prefers gold over Bitcoin, he maintained that both assets are effective alternatives in a case where traditional fiat loses value faster than hard assets. Still, the Bridgewater Associates founder retained his conservative stance about using BTC’s role as a reserve asset . He cited key concerns around oversight and blockchain transparency.

Here are other key points touched on by Dalio:

• Bitcoin is not fully private, as governments can monitor transactions on the network.
• Code-level vulnerabilities in Bitcoin could damage its credibility as an alternative to traditional money.
• Dalio personally owns some Bitcoin but remains cautious.
• His 15% allocation suggestion is flexible, and the split between Bitcoin and gold is up to the investor.

The Bridgewater Associates chief isn’t the only prominent personality who has pointed to Bitcoin as a store of value. U.S. lawmaker Senator Cynthia Lummis recently suggested that the OG crypto could serve as an inflation hedge for low- to middle-income citizens . At the time of writing, BTC is exchanging hands around $118,000—a level it has consolidated since touching its recent all-time high.