The giant of Wall Street, Dalio, moves: The shockwave of the 1% Bitcoin strategy

Ray Dalio, the founder of one of the world’s largest hedge funds and a heavyweight in the investment community, revealed on CNBC that he allocates about 1% of his personal assets to Bitcoin. This announcement is more than just a personal investment decision; it has the potential to ripple throughout the global institutional investor community.

The Moment That Becomes a “Permit” for Institutional Money

Dalio’s public disclosure of his cryptocurrency holdings seems poised to mark a turning point in the financial world. As the head of Bridgewater Associates, managing approximately $120 billion, his statement is not merely the choice of an individual investor but could serve as a de facto “green light” for institutional investment committees.

In the asset management industry, precedents are extremely important. The fact that a legendary investor like Dalio has incorporated Bitcoin provides a logical basis for conservative pension funds and family offices to consider cryptocurrencies, albeit belatedly. Assets previously regarded as “speculative” are suddenly re-evaluated as “diversification tools”—this is the reality in the world of institutional money.

The Story Told by the Numbers

Dalio’s estimated net worth of $15-20 billion makes his 1% allocation not modest but highly strategic. This translates to holding $150 million to $200 million worth of Bitcoin, representing a substantial commitment rather than a mere gesture.

With Bitcoin’s current price around $95.4K, this position size strongly reflects his long-term conviction. It is designed not to be swayed by short-term price trends but to serve as a tail risk hedge against extreme currency devaluations and financial turmoil.

Dalio’s Transformation: From Skepticism to Acceptance

Dalio once harshly criticized Bitcoin, questioning its usefulness as a currency and even mentioning the risk of government bans. However, witnessing years of market performance, the exposure of systemic vulnerabilities, and rising inflation pressures, his perspective has clearly shifted.

A transition from theoretical skepticism to practical acceptance—such a 180-degree turn by a major figure in investing is rare. It signifies not just a market view adjustment but an acknowledgment that Bitcoin can be incorporated into his risk parity strategy, which forms the foundation of his investment philosophy.

Position in the Risk Parity Philosophy

Dalio’s all-weather strategy, developed around risk allocation rather than dollar allocation, fundamentally aims to optimize risk distribution. The inclusion of 1% Bitcoin is a natural extension of this philosophy.

The goal is to enhance portfolio efficiency through a combination of assets with low correlation. While Bitcoin’s high volatility might seem like a disadvantage, considering its low correlation with stocks and bonds, even a 1% allocation can suppress overall portfolio volatility while capturing asymmetric return opportunities.

When prices surge, it provides limited but meaningful returns; during crashes, losses are capped at 1%. This is precisely the “perfect balance of insurance and speculation” for those managing large assets.

Debt Concerns and Macro Background

This move is set against the backdrop of repeatedly warned unsustainable government debt levels and the risks of currency devaluation due to quantitative easing. Bitcoin, with its fixed supply cap, naturally functions as a hedge against these concerns.

Additionally, evolving regulatory environments—particularly the approval of Bitcoin ETFs and other institutional frameworks—likely served as catalysts for Dalio’s public announcement.

Position Relative to Other Major Investors

Dalio’s 1% strategy highlights the diversity of attitudes toward cryptocurrencies. Michael Saylor’s MicroStrategy holds over 150,000 BTC in an extreme position; Paul Tudor Jones sees Bitcoin as a hedge comparable to gold; and Warren Buffett remains strongly opposed—currently, multiple “correct” approaches to Bitcoin coexist in the investment world.

Among these, Dalio’s 1% can be seen as the most rational “institutional compromise.” It balances conservatism with innovation and offers a broad entry point that other institutions can follow.

Market Impact

This disclosure will likely have a tangible impact beyond symbolism. Family offices, funds, and pension plans may accelerate considerations based on the reasoning, “If Dalio is doing it.” Media amplification, especially coverage on mainstream platforms like CNBC, could reach thousands of investment professionals.

Dalio’s personal portfolio may eventually influence Bridgewater’s institutional fund strategies. In the world of institutional investors, such precedents serve as powerful triggers for action.

Bridgewater’s Future

While this disclosure pertains to his personal assets, Dalio’s clear stance is unlikely to be ignored by the organization. Although full adoption isn’t guaranteed, it is highly probable that the firm is evaluating Bitcoin strategies for its clients.

The moment when investment theory aligns with reality—Dalio’s 1% Bitcoin allocation will be remembered as a symbolic turning point in this regard.