Billionaire investor Ray Dalio expressed concerns about a potential “pending debt money problem” in global finance and urged a shift toward hard assets like Bitcoin and gold.
Dalio, the founder of one the world’s largest hedge funds, Bridgewater Associates, said he would invest in “hard money” like gold and Bitcoin while avoiding debt assets, the South China Morning Post reported on Dec. 10.
The veteran investor referred to “unprecedented levels” of indebtedness seen in all major countries, including the United States and China, stressing that its current levels will not be sustainable.
“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,” Dalio said in a speech at a financial conference in Abu Dhabi.
“Steer away from debt assets like bonds and debt”
“I believe that there would likely be a pending debt money problem,” Dalio said, referring to debt as one of five big forces driving the global economy alongside money, economy, internal political order and external geopolitical order.
Bridgewater Associates founder Ray Dalio. Source: SCMP
“Don’t get too caught up on the twists and turns of the day-to-day headlines, and instead, think more about the big forces,” he said, adding:
“I want to steer away from debt assets like bonds and debt and have some hard money like gold and Bitcoin.”
Dalio previously believed cryptocurrencies like Bitcoin would not succeed in the way people hoped they would, but he has emerged as a major BTC supporter in recent years.
In 2022, Dalio said it’s reasonable to allocate up to 2% of an investment portfolio in Bitcoin in addition to gold to hedge against inflation. Previously, the billionaire investor said he would still choose gold over Bitcoin, highlighting the importance of diversification.
Gold bug Peter Schiff urges Biden to dump Bitcoin
Dalio’s acknowledgment of Bitcoin as a hard asset comes as US President-elect Donald Trump prepares to take office in January, with many expecting the launch of a US Bitcoin national reserve in 2025.
However, some financial observers, including gold advocate Peter Schiff, have urged that the implications of a Bitcoin reserve in the US could be “harmful.”
Peter Schiff urged Biden’s administration to ditch Bitcoin holdings before Donald Trump takes office in 2025. Source: Peter Schiff
Schiff took to X on Dec. 9 to suggest that President Joe Biden’s administration could do “one good thing” before leaving office by selling all the Bitcoin that is currently held by the US government.
“Not only would the money raised reduce the 2024 budget deficit, but it would put an end to all the nonsense about creating a harmful ‘“Strategic’ Bitcoin Reserve,” Schiff stated.
