Bitcoin Bulls Defy Dalio’s Warning as Gold Outshines U.S. Stocks in 2025

Ray Dalio's latest cautionary note hits the wires—just as gold quietly notches another victory over traditional equities. The hedge fund legend's skepticism toward Bitcoin isn't new, but timing is everything.

Gold's 2025 Surge

While Wall Street fixates on quarterly earnings, the ancient asset class posted gains that left the S&P 500 trailing. No flashy tech, no dividend promises—just centuries of proven store-of-value credibility doing its work. Some portfolio managers are quietly rebalancing, adding weight to the yellow metal as geopolitical and inflationary hedges tighten.

Bitcoin's Resilience Play

Meanwhile, crypto markets absorb Dalio's warning and keep climbing. Institutional inflows haven't slowed; if anything, the commentary fuels more debate—and more trading volume. The digital gold narrative gets tested every time traditional safe havens rally, and this round is no different.

Narrative vs. Numbers

Finance loves a good dichotomy. Gold beating stocks fits a risk-off textbook. Bitcoin's concurrent strength breaks the old model—unless you view both as hedges against the same systemic frailties. Traditionalists scoff at the comparison, but allocation charts show overlap in investor bases that didn't exist five years ago.

The real story isn't which asset wins, but why the race keeps changing lanes. Gold's performance highlights deep-seated institutional caution. Bitcoin's momentum reflects a growing camp betting on structural change—not just a better mousetrap, but a new kitchen. And as always, the smart money talks about diversification while secretly doubling down on their favorite horse. After all, nothing says 'balanced portfolio' like quietly funneling client funds into whatever outperformed last quarter.

TLDR

• Ray Dalio stated that fiat devaluation is the core investment story of 2025.
• He emphasized that most market participants are focusing too much on U.S. stocks and artificial intelligence.
• Dalio said gold delivered a 65% return in dollar terms over the past year.
• He added that the S&P 500 returned 18 percent in dollars during the same period.
• Measured in gold, the S&P 500 declined by 28% according to Dalio’s figures.

Billionaire investor Ray Dalio has pointed to fiat devaluation as the most urgent market trend, overshadowing the performance of U.S. stocks, while Bitcoin bulls continue to rally. Dalio emphasized that gold and foreign equities have sharply outpaced U.S. assets in returns, raising concerns over capital flight from American markets. Investors, meanwhile, shift attention to alternative stores of value such as Bitcoin as U.S. equities lag behind global benchmarks.

Dalio Warns on Fiat Devaluation and U.S. Equity Underperformance

Ray Dalio has warned that fiat currencies are losing value fast and investors are ignoring this reality. He said that many are focused on artificial intelligence and U.S. equities while overlooking asset reallocation trends. “The real story is the devaluation of money,” Dalio stated during recent market commentary.

He reported that Gold returned 65% last year in dollar terms, while the S&P 500 saw an 18% gain. This performance gap of 47 percentage points suggests declining confidence in the dollar. Dalio added that, “When measured in gold, the S&P 500 actually fell by 28%.”

He explained that massive fiscal and monetary stimulation contributed to this shift in value. These policies, according to him, weakened the dollar and drove capital away from U.S. markets. Investors responded by diversifying into assets outside the U.S., including foreign stocks and gold.

Foreign Stocks Outperform U.S. Equities in 2025 Shift

Dalio noted that non-U.S. equities beat U.S. markets by double-digit percentages during the past year. European stocks outperformed U.S. equities by 23%, while Chinese markets followed with a 21% margin. U.K. and Japanese stocks also gained 19% and 10% respectively.

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.

In this… pic.twitter.com/RvXbeI8cRb

— RAY Dalio (@RayDalio) January 7, 2026

These gains, he explained, reflect a broader capital shift driven by concerns over monetary policy and debt levels in the U.S. Asset managers sought better returns and greater stability outside American markets. The performance of these foreign equities reinforced this strategic shift.

Dalio said capital reallocation away from U.S. bonds and cash positions also gained momentum. Investors turned to non-U.S. bonds and other international assets in response to the dollar’s weakening position. He added that returns were stronger in these markets even without currency effects.

Gold Leads Performance as Bitcoin Bulls Eye Safe Haven Momentum

Gold emerged as the top-performing asset class in dollar terms, beating traditional equities and drawing comparisons to alternative stores of value. As Dalio highlighted gold’s outperformance, bitcoin bulls echoed the message on fiat weakness. Bitcoin supporters argue that hard assets are gaining ground as trust in fiat erodes.

Though Dalio did not directly address Bitcoin, his focus on asset reallocation supports a case Bitcoin bulls often make. They claim decentralized assets offer protection during fiat devaluation cycles. The ongoing capital shift appears to support this view, as investors continue exploring alternatives.

Meanwhile, Bitcoin bulls highlight similar patterns in crypto markets where fiat uncertainty supports long positions. The alignment of gold’s rise and fiat concerns creates favorable conditions for Bitcoin narratives. Traders closely monitor these correlations as they prepare for market shifts in 2025.