Ray Dalio sells final Bridgewater stake after predicting debt collapse

Billionaire investor Ray Dalio has said his goodbye to Bridgewater Associates, a hedge fund giant he founded 50 years ago.

Dalio sold his last remaining stake in Bridgewater and stepped off its board, The Wall Street Journal reported on Thursday.

After buying Dalio’s shares, Bridgewater reportedly issued new shares to the sovereign wealth fund of Brunei in a multibillion-dollar deal that brought it an almost 20% stake in the company.

Dalio took to X on Thursday to say he was thrilled to be passing along Bridgewater to the next generation, adding: “I love seeing Bridgewater alive and well without me — even better than alive and well with me.”

Dalio predicts “worse than a recession” coming

Dalio’s latest Bridgewater sale marks the final chapter of his journey at the company he founded out of a two-bedroom apartment back in 1975. The 75-year-old billionaire stepped down as Bridgewater CEO in 2017 and then quit as chairman before the end of 2021.

Known for successfully predicting the 2008 economic crisis, Dalio has repeatedly forecasted more collapses, predicting a global debt crisis in late 2024.

Source: Ray Dalio

“When a country is overloaded with debt, the preferred path is to lower rates and devalue the currency, so it is worth betting that this is exactly what will happen,” the veteran investor said in an X post last Wednesday.

He also predicted that the US economy is at risk of facing an “economic heart attack” if the government does not reduce the budget deficit to 3% of GDP.

Dalio ups allocation advice for Bitcoin and gold

While expecting more economic challenges amid deglobalization and unsustainable trade imbalances, further escalated by the Trump administration’s tariff disruptions, Dalio has repeatedly recommended Bitcoin (BTC) and gold as major tools to hedge against the crises.

In late July, he recommended investors allocate up to 15% into Bitcoin or gold to optimize for the “best return-to-risk ratio,” significantly increasing his previous advice of up to 2%.

Related: Bulgaria missed $25B debt payoff by selling Bitcoin in 2018

“I believe Bitcoin is one hell of an invention,” Dalio wrote in his essay “What I Think of Bitcoin” in 2021, where he said the following:

“Bitcoin looks like a long-duration option on a highly unknown future that I could put an amount of money in that I wouldn’t mind losing about 80% of.”

While disclosing he owns some Bitcoin, the legendary investor still said he strongly preferred gold over Bitcoin.

Criticisms of Dalio’s grim outlook

Although Dalio has gained the reputation of a market oracle after predicting the 2008 crisis, many of his other economic forecasts have attracted criticism.

In 1982, Dalio predicted that the global economy was headed toward a depression, which proved to be false, causing massive losses for Bridgewater. Dalio later admitted he was “dead wrong” in both his forecast and the trading strategy that followed, revealing that his misjudgment nearly bankrupted the firm.

Source: The Edge Digest

As Dalio warns that the US may be the next country to go broke, skeptics increasingly highlight many flaws in the track record of his economic predictions, such as overgeneralization, confirmation bias and lack of temporal clarity.

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