Hedge Fund Titan Ray Dalio Favors Gold, Bitcoin Over Debt Investments

Prominent American investor and hedge fund manager Ray Dalio is once more promoting investment in gold and Bitcoin, deliberately avoiding debt assets since major economies are dealing with rapidly increasing indebtedness.

The South China Morning Post reported Dalio’s remarks from a financial conference in Abu Dhabi on Tuesday. There, he said he believes there will likely be a “pending debt money problem,” and that he wants to “steer away from debt assets like bonds and debt, and have some hard money like gold and Bitcoin.”

Bitcoin, often called “digital gold,” shares gold’s characteristic of scarcity, with a capped supply of 21m coins. This limited supply creates a deflationary effect absent in fiat currencies, driving its potential for long-term value growth.

Meanwhile, gold is celebrated for its stability and has consistently acted as a safe-haven asset during economic turmoil.

Ray Dalio Predicts Looming Debt Crises for Major Economies

The Bridgewater Associates founder reportedly stated that the US, China and nearly all major countries, with the exception of Germany, are dealing with unprecedented rises in debt. He believes this unsustainable trend could lead to considerable economic risks unless addressed with effective management.

“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.

Ray Dalio highlighted “debt, money, and the economy” as one of five key forces shaping the world. He also pointed to internal political divides, driven by wealth and value gaps, and external geopolitical tensions, such as US-China power struggles, as critical factors.

Billionaire Investor Picks Gold as Top Choice, Cites Bitcoin’s Risks

Dalio has previously shown a preference for both Bitcoin and gold. Yet, if forced to choose, he would opt for gold.

“If you put a gun to my head, and you said, ‘I can only have one,’ I would choose gold,” he earlier told CNBC, saying he owns “a very small amount of Bitcoin.”

In earlier commentary on Bitcoin, Dalio has said it fails as a medium of exchange since it can’t buy much. He further warned that governments might ban it.

Dalio also argued that “cash is trash” and advised borrowing instead of holding fiat currency. He urged investors to focus on “higher-returning, non-debt assets” as a better strategy.