Billionaire hedge fund manager Ray Dalio says a debt crisis is looming in major economies—and "hard money" like Bitcoin and gold is a safer bet.
Speaking at Abu Dhabi Finance Week, the founder of Bridgewater Associates revealed he wants to "steer away" from bonds and debt.
Dalio warned that "unprecedented levels" of debt in the U.S. and China are unsustainable.
"It is impossible for these countries to be able to not have a debt crisis in the years ahead," he said on Tuesday.
Inflation has remained stubbornly high in several major countries, eroding the spending power of currencies including dollars and pounds. Back in 2022, the consumer price index hit highs of 9.6% in the U.K. and 9.1% in the U.S.
Meanwhile, Bitcoin—with its fixed supply of 21 million coins—recently accelerated to new all-time highs beyond $100,000.
But it didn’t last. At the time of writing, the Bitcoin price is trading just above $98,000 after having gained 1% in the past day, according to CoinGecko data.
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Gold prices have also reached record levels in recent months, rising 36% over the past year to hit $2,697 an ounce. In fact, gold set a new all-time high in August. Then did it again a few months later in October, when the price rose to $2,790.07 per ounce.
Enthusiasts have long described BTC as "digital gold," all while predicting this cryptocurrency will be more popular than the precious metal one day.
Surpassing gold's market cap of $18 trillion would result in a single Bitcoin being worth $850,000, with BitWise Asset Management forecasting that this milestone could be reached by the end of the decade.
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Dalio added that investors should "think more about the big forces" at play on the world stage, rather than fixate on "day-to-day headlines."
He identified debt as one such force—along with domestic politics, geopolitics, "acts of nature" such as climate change, and new technologies.
The 75-year-old has an estimated net worth of $14 billion, and established acclaimed asset manager Bridgewater Associates in 1975.
Dalio's views on Bitcoin have somewhat evolved in recent years.
Ray Dalio: Bitcoin and Crypto Get 'Too Much Attention'
He's at it again. Ray Dalio, arguably the most famous hedge fund manager in the world, indicated he's not putting too much faith in cryptocurrency as a hedge for anything. In an interview on "The David Rubinstein Show" on Bloomberg, Dalio reiterated that he thinks some governments will outlaw cryptocurrencies such as Bitcoin—a point on which he's been proven correct—and implied that its market capitalization is too large. He also lumped the asset class's most fervent proponents in with goldbugs...
He previously described this digital asset as "a tiny thing that gets disproportionate attention."
"It's not an effective money, it's not an effective store of value, it's not an effective medium of exchange, but we are in a world where money as we know it is in jeopardy. We are printing too much," Dalio told CNBC in February 2023.
While he argued at the time that digital currencies could address the world's growing debt crisis, he cast doubt on whether Bitcoin was a solution.
Edited by Stacy Elliott.
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