Dalio said, “For the best return and risk balance, 15% of the investment should be in gold or Bitcoin.” However, he emphasized his preference for gold over Bitcoin. He stated that he personally holds “some Bitcoin,” but the amount is small. 

Dalio highlighted the economic risks posed by the growing debt burden in the US. “The value of the currency is rapidly eroding,” he warned. The US Treasury may need to issue nearly $12 trillion in new bonds next year. This issue affects other Western countries as well, creating a “debt vicious cycle” globally. Dalio predicted a downturn similar to economic crises in the 1970s and 1930s. 

Therefore, he noted that valuable assets like gold and Bitcoin act as “effective diversifiers” during crisis periods. Investors can reduce risks by balancing their portfolios with these assets. 

US Debt Crisis and Dalio’s Investment Strategy 

The latest US Treasury report shows nearly $1 trillion in new borrowing in Q3, $453 billion more than previous estimates. For Q4, a borrowing expectation of $590 billion exists. Thus, the US government continues to cover budget deficits through debt. 

Dalio said other Western countries face similar “debt traps” and their currencies will lose value. In this process, “stable value” assets like gold and Bitcoin will stand out. Dalio also mentioned Bitcoin is a newer, digital alternative to gold but remains skeptical about its acceptance as a reserve currency. 

The US may need to issue $12 trillion in bonds next year to roll over its debt. The problem is the currency losing value… Other Western countries face the same situation and will suffer more severely. Bitcoin and gold will continue to gain value against their currencies. 

Dalio believes governments won’t adopt Bitcoin as a reserve currency due to its transparent transaction structure and lack of privacy. Still, Bitcoin plays an important role in portfolio diversification. 

Current Performance of Gold and Bitcoin 

As of July 2025, Bitcoin trades around $118,100, about 4% below its all-time high of $123,230 on July 14. Gold has also reached new historical highs in recent months. Dalio’s portfolio advice increases the appeal of these two assets for investors. Ultimately, Dalio recommends increasing allocations to gold and Bitcoin in portfolio management.

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