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With the International Monetary Fund forecasting that global debt will surpass $100 trillion this year, billionaire hedge fund CEO Ray Dalio has underlined the importance of bitcoin and gold as safe-haven assets.

Speaking at Abu Dhabi Finance Week, Dalio warned that “hard money” – described as gold or bitcoin – was preferable to debt-based investments. “I want to steer away from debt assets like bonds and debt, and have some hard money like gold and bitcoin,” he said.

Dalio, founder of the hedge fund Bridgewater Associates, noted that mushrooming debt around the world would continue to impact the long-term value of fiat currencies. "I believe that there would likely be a pending debt money problem," Dalio said. "It is impossible for these countries to be able to not have a debt crisis in the years ahead that will lead to a great decline of value."

Dalio recommended that investors allocate part of a diversified investment portfolio to the world’s leading cryptocurrency, bitcoin. He added that fiat currencies had a perilous future amid growing debt levels, with leveraged assets like bonds presenting greater risks than "blue-chip" assets like gold or bitcoin.

Dalio's concern over global debt is shared by international bodies like the IMF, which this October said: “Sustained debt buildups can raise the probability of debt distress or broader financial crisis." More than 50 countries in the Global South are allocating over 10% of their total revenue on debt servicing, the intergovernmental organization UN Trade and Development said.

Dalio first waded into crypto in 2021, but wasn't always bullish on bitcoin. Last year, he expressed skepticism toward the cryptocurrency: “I think [bitcoin] has no relation to anything,” he told CNBC . “It's a tiny thing that gets disproportionate attention. The value of bitcoin is less than a third of the value of Microsoft stock… Biotech and other industries are more interesting than bitcoin.”

"I think you are probably going to see the development of coins that probably will end up being attractive as viable coins," he said. "I don't think bitcoin is it."