The XAU/BTC ratio jumped 7.5% between July 21 and August 4, a clear sign Bitcoin is trailing gold. Billionaire investor Ray Dalio this week said he prefers gold for portfolio diversification, pointing to signs of an AI bubble as one reason.
Gold's recent edge
Gold has been gaining ground on Bitcoin since late July. The XAU/BTC ratio — which measures how many ounces of gold one Bitcoin can buy — rose steadily over the two-week period. That means Bitcoin's price performance lagged behind gold's, a reversal from stretches earlier this year when crypto often outpaced traditional safe havens.
Dalio's take
Ray Dalio, founder of Bridgewater Associates, said he favors gold over Bitcoin as a better asset for portfolio diversification. His preference is partly due to what he sees as AI bubble risks. Dalio didn't elaborate on the specific signs he's watching, but his comments land at a time when tech stocks and AI-related tokens have drawn scrutiny from some macro investors.
Dalio's stance isn't new — he's long been a gold advocate — but the timing stands out. With the XAU/BTC ratio climbing, his remarks reinforce a narrative that gold remains the go-to hedge for certain institutional players. Bitcoin advocates often argue the cryptocurrency will eventually replace gold as a store of value, but the recent price action suggests that shift isn't happening yet.
AI bubble fears linger
The AI bubble angle adds a fresh layer. Dalio's concern about frothy AI markets echoes warnings from other veteran investors who see parallels to the dot-com era. For now, that caution seems to be pushing capital toward gold rather than Bitcoin, at least in Dalio's portfolio. Whether other big allocators follow suit remains an open question.
