Ray Dalio Advocates Gold and Bitcoin Over Debt Assets at Abu Dhabi Conference
This week, global investors gathered in Abu Dhabi for finance and cryptocurrency conferences. Billionaire investor Ray Dalio, founder of Bridgewater Associates, shared an investment strategy prioritizing “hard money” assets like gold and bitcoin over debt assets.
Dalio expressed concerns about rising indebtedness in major economies, including the United States and China. At the Abu Dhabi conference, he stated:
“I believe that there would likely be a pending debt money problem. I want to steer away from debt assets like bonds and debt, and have some hard money like gold and bitcoin.”
Dalio owns “a little bit” of bitcoin, which he described as “almost a younger generation’s alternative to gold.” He emphasized gold's status as the “well-established blue-chip alternative to fiat money.”
Gold and Bitcoin Hit Record Highs
Gold and bitcoin are trading near record highs, viewed as reliable hedges against economic volatility, geopolitical conflicts, and shifting monetary policies. Last week, bitcoin exceeded $100,000, fueled by positive statements from notable figures, including Donald Trump.
Hard money assets, linked to physical commodities or controlled supply systems, appear increasingly attractive amid escalating global debt levels. Dalio noted unsustainable debt levels in the US, China, and other major economies, warning of an impending debt crisis that could threaten currency stability.
Dalio highlighted five major forces influencing the future: debt, monetary systems, economic stability, wealth inequality, and international conflicts such as US-China tensions.
Dalio Warns of Currency Threats
In a 2023 interview with CNBC's Squawk Box, Dalio warned of threats to traditional currency systems due to excessive money printing globally. He stated:
“We are in a world where money as we know it is in jeopardy. We are printing too much, and it’s not just the United States.”
After the 2008 financial crisis, Dalio analyzed the rise and decline of the latest global reserve currencies: the Dutch guilder, British pound, and US dollar. He identified three cycles affecting currency dominance: debt generation, internal conflicts driven by wealth, and challenges from new powers. A currency's endurance depends on the economic strength supporting its reserve status, with the US dollar currently navigating the initial cycle fueled by debt and credit. Dalio’s recognition of bitcoin as an “alternative to gold” indicates its increasing importance in investment discussions.