1% of Your Total Portfolio Should Be Allocated to Bitcoin, According to Billionaire Investor Ray Dalio

Core Insights - Bitcoin is currently down 3% for the year, but billionaire investor Ray Dalio suggests an optimal allocation of 1% to Bitcoin in investment portfolios [1][6] Diversification Benefits - Bitcoin offers significant diversification benefits, remaining largely uncorrelated with major asset classes, which allows it to perform well even when other assets are declining [2][4] - Historical data shows that the correlation between Bitcoin and the S&P 500 has averaged between 0.2 and -0.1 over a 12-year period, indicating low correlation [4][5] Market Perception - Investors are increasingly viewing Bitcoin as a risky tech stock, leading to sell-offs in Bitcoin alongside tech and AI stocks, despite its long-term performance history [3][6] - Over the past decade, Bitcoin has been uncorrelated with major asset classes and has been the top-performing asset in 10 of the last 13 years [8] Economic Context - The recent federal government shutdown and uncertainty regarding tariffs are prompting investors to seek alternatives to dollar-denominated assets, which may enhance Bitcoin's appeal [9]