- Ray Dalio recommends a 15% allocation to gold or Bitcoin to hedge against currency devaluation in neutral portfolios.
- He favors gold over Bitcoin but acknowledges digital assets’ role as practical diversifiers amid loose central monetary policy.
Billionaire investor Ray Dalio outlined a clear guideline for hedging against currency devaluation on the Master Investor podcast. He argued that gold and Bitcoin serve as practical safeguards when central banks pursue loose monetary policy. Dalio stressed his personal preference for gold but recognized Bitcoin as a useful portfolio diversifier.
Dalio began by saying, “I have gold, and I have some Bitcoin — but not much. I’m not going to describe my own portfolio, but I’ll say the following.” Then he offered a simple rule: if an investor held a neutral view on assets and sought the best return‑to‑risk balance, that person should allocate about 15 percent of their portfolio to gold or Bitcoin. He added, “I’m strongly preferring gold to Bitcoin, but that’s up to you.”
Dalio explained that the core issue lies in devaluation of money. He said that excessive money printing erodes purchasing power and tilts risk toward fiat holdings. Therefore, he views precious metals and digital gold as effective diversifiers. “It’s an effective hedge,” he noted, “so if you had no view, you would have about 15 percent … as a safeguard against the other exposures.”
Bridgewater Associates’ founder has repeatedly warned that rising national debt and fiscal deficits amplify currency risk. He argued that investors must plan for scenarios in which central banks maintain ultra‑low rates and expand their balance sheets. In that environment, traditional cash holdings lose value, whereas assets with limited supply can protect wealth.
Moreover, Dalio emphasized that portfolio balance must reflect one’s own convictions. He said that investors with a strong preference for Bitcoin could tilt more toward digital assets, while those who trust gold might allocate a larger share to bullion. However, he insisted that some exposure to both assets offers a buffer against policy mistakes and market swings.
Overall, Dalio’s advice invites investors to rethink how they hedge against inflation and currency weakness. In practice, this approach may translate into steadier long‑term returns, even as global monetary trends remain uncertain.
