Ray Dalio suggests that investors allocate 15% to gold or Bitcoin, stating that holding a small amount of Bitcoin personally.
BlockBeats News, July 28th, billionaire Ray Dalio suggested that investors allocate 15% of their investment portfolios to Bitcoin and gold to hedge against the ever-growing U.S. debt and economic instability.
Bridgewater Associates founder Ray Dalio stated in the "Masters of Scale" podcast that the macroeconomic risks of rising U.S. and other countries' government debt have not been fully digested by the market, and the market may eventually face a significant downturn. The U.S. government "spends 40% more than it earns, and can't really cut spending. Its debt is six times its revenue, with annual interest payments of up to $1 trillion, equivalent to half its budget deficit."
Ray Dalio further explained that the U.S. government can only repay its debts by issuing more debt and "central bank (Fed) printing." This has created a situation where the market may become increasingly panic-stricken. Dalio believes that the triggering factor for a major collapse could be a new round of large-scale quantitative easing or government control of the Fed. Signals of such events have already begun to "flicker or flicker," and he also raised similar points in his recent book "How Countries Die."
As such risks are not yet priced into the market, Ray Dalio recommended that investors allocate at least 15% of their investment portfolios to gold or Bitcoin. This can serve as a hedge against fiat currency and cash equivalents (such as bonds). However, he "strongly favors" gold over Bitcoin personally because he doubts whether any central bank would consider cryptocurrency as a reserve currency, "because everyone can understand and observe who is using it for what transactions, so it lacks privacy."
Ray Dalio also stated that there are "doubts" about whether "the code can be cracked" or whether the Bitcoin protocol can be changed to make it an "effective" store of value. Given these concerns, gold is more important in Ray Dalio's own investment portfolio than Bitcoin. He said, "I have gold, and I have some Bitcoin, but not much."
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