Billionaire investor Ray Dalio has officially parted ways with Bridgewater Associates, the hedge fund powerhouse he founded 50 years ago.
Dalio sold his final shares in Bridgewater and resigned from its board, according to a report by The Wall Street Journal on Thursday.
Following Dalio’s exit, Bridgewater issued new shares to Brunei’s sovereign wealth fund in a multibillion-dollar transaction, giving the fund nearly a 20% ownership stake in the company.
On Thursday, Dalio took to X to express his excitement about passing Bridgewater to the next generation, saying, “I love seeing Bridgewater alive and well without me — even better than alive and well with me.”
Dalio forecasts an economic downturn “worse than a recession.”
Dalio’s recent sale of his remaining Bridgewater shares marks the final chapter in his journey with the firm he started from a two-bedroom apartment in 1975. The 75-year-old billionaire stepped down as Bridgewater’s CEO in 2017 and resigned as chairman by the end of 2021.
Renowned for accurately predicting the 2008 financial crisis, Dalio has continued to warn of future downturns, forecasting a global debt crisis expected to hit in late 2024.
“When a country is burdened with excessive debt, the usual response is to cut interest rates and devalue the currency, so it’s reasonable to expect that this is exactly what will happen,” the seasoned investor said in a post on X last Wednesday.
He also warned that the US economy could suffer an “economic heart attack” unless the government lowers the budget deficit to 3% of GDP.
Dalio increases his recommended allocation for Bitcoin and gold
Amid ongoing economic challenges driven by deglobalization and unsustainable trade imbalances—further intensified by tariff disruptions during the Trump administration—Dalio has consistently recommended Bitcoin and gold as key hedges against potential crises.
In late July, he advised investors to allocate up to 15% of their portfolio to Bitcoin or gold to achieve the “best return-to-risk ratio,” a significant increase from his previous recommendation of up to 2%.
“I believe Bitcoin is one hell of an invention,” Dalio wrote in his 2021 essay, What I Think of Bitcoin, where he shared 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.”
Although Dalio disclosed that he owns some Bitcoin, the legendary investor emphasized that he still strongly prefers gold over Bitcoin.
Criticisms of Dalio’s grim outlook
While Dalio earned a reputation as a market oracle for predicting the 2008 crisis, many of his other economic forecasts have faced criticism.
In 1982, Dalio predicted the global economy was headed for a depression—a forecast that proved incorrect and led to significant losses for Bridgewater. Dalio later admitted he was “dead wrong” both in his prediction and the trading strategy that followed, revealing that his mistake nearly drove the firm to bankruptcy.
As Dalio warns that the US could be the next country to go broke, skeptics are increasingly pointing out flaws in his economic predictions, including overgeneralization, confirmation bias, and a lack of clear timing.
