Ray Dalio Exits Bridgewater After Debt Warning, Backing BTC

Billionaire investor Ray Dalio has mentioned his last goodbye to Bridgewater Associates, a hedge fund large he based 50 years in the past.

Dalio has offered his final remaining stake in Bridgewater and stepped off its board, The Wall Avenue Journal reported on Thursday.

After shopping for Dalio’s shares, Bridgewater reportedly issued new shares to the sovereign wealth fund of Brunei in a multibillion-dollar deal that introduced it an almost 20% stake within the firm.

Dalio took to X on Thursday to inform he was thrilled to be passing alongside Bridgewater to the subsequent technology, saying: “I like seeing Bridgewater alive and effectively with out me — even higher than alive and effectively with me.”

Dalio predicts “worse than a recession” coming

Dalio’s newest Bridgewater sale marks the ultimate chapter of his journey on the firm he based out of a two-bedroom house again in 1975. The 75-year-old billionaire stepped down as Bridgewater CEO in 2017 after which give up as chairman by the top of 2021.

Recognized for efficiently predicting the 2008 financial disaster, Dalio has repeatedly forecasted extra collapses, predicting a world debt disaster in late 2024.

“When a rustic is overloaded with debt, the popular path is to decrease charges and devalue the forex, so it’s value betting that that is precisely what is going to occur,” the veteran investor mentioned in an X publish final Wednesday.

He additionally predicted that the US financial system is liable to going through an “financial coronary heart assault” if the federal government doesn’t scale back the funds deficit to three% of GDP.

Dalio ups allocation recommendation for Bitcoin and gold

Whereas anticipating extra financial challenges amid deglobalization and unsustainable commerce imbalances, additional escalated by the Trump administration’s tariff disruptions, Dalio has repeatedly really helpful Bitcoin (BTC) and gold as main instruments to hedge in opposition to the crises.

In late July, he really helpful buyers allocate as much as 15% into Bitcoin or gold to optimize for the “greatest return-to-risk ratio,” considerably elevating his earlier recommendation to take a position simply as much as 2%.

Associated: Bulgaria missed $25B debt payoff by promoting Bitcoin in 2018

  “I imagine Bitcoin is one hell of an invention,” Dalio wrote in his essay “What I Consider Bitcoin” in 2021, the place he mentioned the next:

“Bitcoin seems to be like a long-duration possibility on a extremely unknown future that I may put an sum of money in that I wouldn’t thoughts shedding about 80% of.”

Whereas disclosing he owns some Bitcoin, the legendary investor nonetheless mentioned he strongly most well-liked gold over Bitcoin.

Criticisms of Dalio’s grim outlook

Though Dalio has gained the repute of a market oracle after predicting the 2008 disaster, lots of his different financial forecasts have attracted some notable criticism.

In 1982, Dalio predicted that the worldwide financial system was headed towards a despair, which proved to be false, inflicting huge losses for Bridgewater. Dalio later admitted he was “useless fallacious” in each his forecast and the buying and selling technique that adopted, revealing that his misjudgment almost bankrupted the agency.

As Dalio warns that the US stands out as the subsequent nation to go broke, skeptics more and more spotlight many flaws within the observe file of his financial predictions, similar to overgeneralization, affirmation bias and lack of temporal readability.