As bullish sentiment in Bitcoin remains high, Bridgewater Associates founder Ray Dalio has issued another significant macroeconomic warning. He points out that the core theme seriously underestimated by the market is not artificial intelligence or innovation in U.S. stocks, but the ongoing “fiat currency devaluation.” Against this backdrop, the overall performance of gold and non-U.S. stocks has already clearly outperformed the U.S. stock market, and capital flows are undergoing structural changes.
In his latest view, Ray Dalio emphasizes that the key investment theme for 2025 to 2026 is the systematic decline in the purchasing power of major fiat currencies, and this trend is distorting investors’ judgments of the true returns on assets. He notes that last year, the dollar-denominated return on gold was as high as 65%, while the dollar-denominated return on the S&P 500 was only 18%, a difference of 47 percentage points. When measured in gold, the S&P 500 actually experienced about a 28% decline.
From a broader macro asset allocation perspective, Ray Dalio believes that the long-term competitiveness of the U.S. stock market relative to gold and foreign stocks is weakening. The reasons include the side effects of long-term fiscal and monetary stimulus policies, excessive asset valuations, and changes in the global capital allocation structure. As investors gradually reduce their concentration in U.S. assets, capital is accelerating its flow into other markets.
Data shows that non-U.S. stocks have significantly outperformed the U.S. market over the past year. European stocks outperformed U.S. stocks by about 23 percentage points, Chinese stocks by about 21 percentage points, UK stocks by 19 percentage points, and Japanese stocks by around 10 percentage points. This gap directly reflects the global re-pricing of risk and return.
Ray Dalio also warns that currency devaluation creates an “illusion,” where asset prices nominally rise, but actual purchasing power declines. This means that returns measured solely in fiat currency may seriously overestimate the true level of returns. Bridgewater believes that whether it’s stocks, bonds, or cash, the risk-adjusted performance of non-U.S. assets is currently outperforming domestic U.S. assets across the board.
In this macroeconomic context, Bitcoin supporters continue to emphasize the narrative of anti-inflation and resistance to fiat currency devaluation, while Dalio’s warning provides a more macro-logical support for gold, non-U.S. assets, and diversified allocations. When fiat devaluation becomes the main theme, the core of asset allocation is no longer “how much it rises,” but “how much purchasing power is preserved.”
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