Bitcoin Bulls Face Dalio's Warning Amidst Fiat Decline and Gold's Rise Over Wall Street

Billionaire investor Ray Dalio emphasizes that the devaluation of fiat currency is the crucial investment theme that many market participants are overlooking. This trend is causing capital to flow away from American markets as gold and international stocks outperform U.S. equities.

Key Takeaways

Ray Dalio warns that the devaluation of fiat currencies is a key investment story to watch in 2025.
Gold significantly outperformed U.S. stocks, with a return of 65% compared to the S&P 500's 18%.
Substantial capital is moving from U.S. markets to international equities.
The trend of currency depreciation may drive a reallocation of assets toward non-U.S. investments.

Ray Dalio warns on fiat devaluation and gold’s outperformance.

Dalio's Investment Insights for 2026

Ray Dalio, the founder of Bridgewater Associates, has shared insights on the current investment landscape for 2026. He highlights a prevailing investment focus on the declining value of fiat currencies and how U.S. stocks are underperforming in comparison to gold and foreign equities. This observation contrasts sharply with the market's prevalent focus on U.S. stocks and investments in artificial intelligence for the upcoming year.

According to Dalio, gold yielded a remarkable return of 65% in dollar terms last year, surpassing the S&P 500 index, which recorded an 18% return. In terms of gold, the S&P 500 actually declined by 28%. This discrepancy in performance is attributed to several factors, including monetary and fiscal stimulation, gains in productivity, and significant reallocations of investments away from U.S. markets.

“What has always mattered most to me is getting as close to the truth as possible. You can’t make good decisions without good facts, and you can’t get good facts without being radically open-minded and willing to look at reality as it really is—not as you wish it to be.”

— Ray Dalio (@RayDalio) January 7, 2026

Dalio's analysis indicates that non-U.S. stocks have outperformed their U.S. counterparts by notable margins. European stocks led with a 23% outperformance, followed by Chinese stocks at 21%, U.K. stocks at 19%, and Japanese stocks at 10%.

He also pointed out that currency depreciation creates a perception that assets denominated in weakening currencies are performing better than they really are. Consequently, Dalio observed that investors who ventured into non-U.S. stocks and bonds achieved higher returns than those invested in U.S. equities and bonds, suggesting that continued reevaluation and diversification away from U.S. assets is likely.