Bitcoin News Today: Ray Dalio Recommends 15% Bitcoin and Gold Allocation as U.S. Debt Reaches $36.7T, Prices Hit New Highs

Ray Dalio, founder of Bridgewater Associates, has advocated for a 15% portfolio allocation to Bitcoin and gold as a response to the U.S. and global fiscal challenges he terms a “debt doom loop.” During a recent appearance on the Master Investor podcast, Dalio emphasized the need to hedge against currency devaluation and systemic risks arising from escalating debt levels. The U.S. national debt has surged to $36.7 trillion, with the Treasury projecting an additional $12 trillion in borrowing over the next year to service existing obligations. Dalio highlighted the unsustainable cycle of rising debt, increasing taxation, and stagnant growth, warning of its potential to erode confidence in fiat currencies [1].

The allocation strategy represents a significant shift from Dalio’s earlier 1% to 2% Bitcoin recommendation in January 2022. While he holds “some Bitcoin, but not much,” he remains favorably inclined toward gold, viewing it as a more reliable hedge. The 15% threshold, he noted, is flexible, depending on individual investor preferences between the two assets. The recommendation aligns with broader market trends, as Bitcoin and gold have both reached recent highs amid inflationary pressures and economic uncertainty. Bitcoin currently trades near $118,100, while gold has seen repeated record prices in recent months [1].

Dalio’s “debt doom loop” framework extends beyond the U.S., as he pointed to similar fiscal vulnerabilities in Western economies like the United Kingdom. The U.S. Treasury’s latest report, released following Dalio’s comments, underscored worsening debt dynamics, projecting $1 trillion in new borrowing for the third quarter—$453 billion above earlier estimates. This escalation reflects a growing reliance on debt to fund government operations, compounding concerns about long-term fiscal stability. Analysts have linked such trends to a reinforcing cycle of higher interest rates, elevated servicing costs, and potential public resistance to further taxation or spending cuts [1].

Despite endorsing Bitcoin as a diversifier, Dalio remains skeptical of its role as a reserve currency. He cited the lack of privacy in Bitcoin transactions, which he argues makes it unsuitable for adoption by central banks. “Governments can see who is doing what transactions on it,” he noted, suggesting transparency could expose vulnerabilities. This perspective contrasts with the growing institutional interest in Bitcoin as a store of value, though it underscores Dalio’s caution about its regulatory and functional limitations [1].

Market reactions to Dalio’s comments have been mixed. While Bitcoin and gold prices have shown resilience, the practicality of a 15% allocation to such volatile assets remains debated. Critics argue that overexposure to these markets could amplify risks during downturns, while proponents view the move as a necessary hedge against systemic devaluation. The timing of allocations is also critical, as macroeconomic signals—such as inflation rates and central bank policies—often drive market behavior more directly than abstract warnings of fiscal collapse [1].

Dalio’s strategy reflects a broader shift in asset allocation priorities as central bank policies become increasingly unconventional. By balancing risk mitigation and capital preservation, the 15% threshold aims to navigate a fragmented global economy without overcommitting to non-correlated assets. However, the effectiveness of this approach will depend on the trajectory of debt levels, regulatory developments, and market volatility. As governments grapple with fiscal sustainability, the appeal of decentralized and inflation-resistant assets like Bitcoin and gold is likely to persist, even as their roles remain contested [1].

Sources:

[1] [Ray Dalio suggests putting 15% in Bitcoin, gold amid US ‘debt doom loop’](https://cointelegraph.com/news/ray-dalio-suggests-15-percent-bitcoin-allocation)