Billionaire Ray Dalio says investment portfolios should hold a certain percentage of Bitcoin (BTC) or gold as a hedge against the devaluation of the US dollar.

In a new interview with Master Investor podcast host Wilfred Frost, the co-chief investment officer of hedge fund Bridgewater Associates says that a proper diversification of an investment portfolio should include 15% of either gold or Bitcoin as US debt rises and geopolitical tensions increase.

“My own approach is, in my share of my portfolio, I have gold and I have some Bitcoin, but not much… I’m not going to describe my own exactly, but I’ll say the following: if you were neutral on everything, in other words, you didn’t have a point of view, and you were optimizing your portfolio for the best return-to-risk ratio, you would have about 15% of your money in gold or Bitcoin. I’m strongly preferring gold to Bitcoin. But that’s up to you.”

The risk-reward ratio, also known as the risk-return ratio, is used by investors to determine the potential gain for every dollar risked on an investment.

Dalio, who has warned that a 1970s-style period of stagflation may be coming, when there’s high inflation, high unemployment and low economic growth, says Bitcoin or gold may be an effective store of value when the US dollar loses value against other currencies, such as through money printing.

“The issue is the devaluation of money… If you have that issue and times when it occurred, which was in times of excess debt and geopolitical problems – just go back and study history, study the British pound, study the Dutch guilder, study this – you would find that in all such periods, also like the Seventies, [gold’s] an effective diversifier.

So if you had no view, you would have about 15% in that portfolio as a hedge against the other. I hope that that’s somewhat of a guide.”

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Macro strategist Luke Gromen warns that the US dollar will keep losing value amid a ballooning $36.60 trillion national debt.

In a new YouTube update, Gromen says the US, with its record-level national debt, is now forced to choose between sacrificing the bond market or letting the dollar fall to maintain financial and economic stability.

According to the macro expert, the US government will ultimately resort to debasing the dollar by printing more money to manage its debt, rather than allowing Treasury yields to soar in an effort to attract investors.

“What we’re seeing in these bond markets, US and more importantly for the moment Japan and the UK, is a choice. You got to sacrifice your currency or you to sacrifice your bond market. And our view, really the base underpinning of our view why gold and Bitcoin are trading where they are trading, is they always choose to sacrifice the currency…

Because if they sacrifice the bond market and let rates just go up and up and up, given their debt levels, they ultimately end up sacrificing both: the currency and the bond market because higher rates drive receipts down and interest up and that means interest quickly goes above your receipts.

And when that happens, that drives essentially hyperinflation of the currency. Either they can’t pay the bonds and the bonds back the currency or more likely, they print the money just to pay the interest and drive a version of hyperinflation.

So they always choose to sacrifice the currency over sacrificing the bond market when debt levels are high as they are and that’s why, because sacrificing the bond market only buys them a little bit of time, and they ultimately end up sacrificing both.”
 

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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