Ray Dalio, the billionaire founder of Bridgewater Associates, the world’s largest hedge fund, has advised investors to prioritize “hard money” assets such as gold and bitcoin, while steering clear of debt-related investments. Speaking at the Abu Dhabi Finance Week (ADFW) in the UAE on Tuesday, Dalio warned that rising global indebtedness could lead to a financial crisis, urging caution in bond and debt markets.
Dalio’s comments come as both gold and bitcoin are experiencing significant gains, with the price of bitcoin recently surging above $100,000 for the first time, fueled in part by positive remarks about the cryptocurrency from US President-elect Donald Trump. As investors seek refuge from economic volatility, geopolitical uncertainties, and shifting monetary policies, both assets have become increasingly attractive as stores of value.
“Hard money” refers to currencies backed by physical commodities like gold, silver, or digital assets like bitcoin, which has a finite and controlled supply.
Dalio also highlighted the growing concerns over the unsustainable levels of debt in major economies, including the United States and China, with the notable exception of Germany. He described the global surge in indebtedness as unprecedented and warned that it would inevitably lead to a debt crisis.
“It is impossible for these countries to avoid a debt crisis in the coming years, which will result in a significant depreciation of currency value,” Dalio said.
Dalio has long emphasized the importance of understanding the macroeconomic forces shaping the future. He identified five key factors he believes will influence global financial markets: the debt crisis, internal political dynamics driven by wealth and value disparities, external geopolitical tensions—such as the US-China rivalry, natural disruptions like climate change and pandemics, and the rise of disruptive technologies.
On the topic of technology, Dalio shared his investment strategy, which focuses on companies leveraging new innovations to enhance their operations, rather than those simply selling the most products or services.
Since stepping down as CEO in 2017 and chairman in 2021, Dalio relinquished control of Bridgewater in October 2022. His current role involves mentoring the firm’s investment committee and overseeing strategic direction.
“Don’t get too caught up in the daily headlines; focus on the larger forces at play,” Dalio advised. “Think both strategically and tactically, while recognizing that the unknowns of the future outweigh the things we can predict.”
He also stressed the importance of diversification in investment strategies, urging investors to prepare for both opportunities and challenges.
In a broader move to expand his financial footprint, Dalio recently opened a branch of his family office in Abu Dhabi, signaling a push into the Gulf Cooperation Council (GCC) region. He praised the UAE and its neighboring countries—Saudi Arabia, Kuwait, Qatar, Bahrain, and Oman—as attractive destinations for investment, noting that the region offers both a high standard of living and excellent educational opportunities for families.
Dalio’s remarks underscore the shifting global investment landscape, as economic uncertainties continue to shape the strategies of both individual and institutional investors worldwide.
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