Bitcoin News Today: Investors Must Hedge as Dollar's Decline Fuels Gold and Crypto Rally

Ray Dalio, the founder of Bridgewater Associates, has issued a stark warning about the future of the U.S. dollar, suggesting that the country’s growing debt and inflationary pressures are undermining the currency’s long-term stability. In a recent statement, Dalio emphasized that the dollar’s weakening position as a global reserve currency is creating a favorable environment for cryptocurrencies and gold to emerge as alternative stores of value. He cited the rising supply of dollars and declining demand as key factors that could push investors to seek alternatives like Bitcoin and gold, which offer limited supply and are perceived as hedges against monetary inflation [1].

Dalio recommended that investors consider allocating up to 15% of their portfolios to cryptocurrencies and gold, a significant increase from his previous allocation of 2%. This shift reflects his belief that hard assets can preserve value as governments struggle to manage increasing debt burdens. He has also expressed optimism about Bitcoin, describing it as a “hell of an invention” and positioning it as a critical asset in a portfolio during periods of economic uncertainty [1].

The U.S. national debt, currently over $37.3 trillion, has risen to levels that Dalio likens to a "debt-induced heart attack" within the next three years. He warned that the U.S. government's interest costs now exceed $1 trillion annually, making it increasingly difficult to sustain debt servicing while also funding public spending. Dalio compared the nation's financial condition to a circulatory system clogged with plaque, where excessive debt could eventually choke off economic growth [3].

Dalio’s concerns extend to the Federal Reserve, which he believes could face mounting political pressure to keep interest rates artificially low. Recent actions by the Trump administration, such as the proposed "One Big, Beautiful Bill Act," have raised concerns among economists that these policies could exacerbate the debt crisis by reducing tax revenues while increasing borrowing. While some economists argue that such actions may not accelerate a debt crisis, they caution that they also fail to provide a meaningful solution [3].

In parallel, gold has seen a significant rally, surpassing $3,600 per ounce for the first time in history. This surge represents a 33% increase in 2024, far outperforming traditional benchmarks like the S&P 500. Dalio attributed this trend to the growing appeal of hard assets as a hedge against the declining purchasing power of U.S. Treasuries and other fiat currencies. He also noted that the rise in gold prices has shown a strong correlation with rising bond yields, particularly in Japan, signaling a broader shift in investor sentiment [2].

Dalio’s warnings come at a time of significant transition for him personally, as he has recently stepped away from Bridgewater Associates after decades of leadership. In August, he sold his remaining shares in the firm to Brunei’s sovereign wealth fund, marking a symbolic end to his tenure. Despite this move, his insights remain influential in global financial markets, particularly as investors reassess their exposure to U.S. assets amid growing macroeconomic uncertainty [1].

Source:

[1] Billionaire Ray Dalio: Crypto Is Now Alternative Currency (https://finance.yahoo.com/news/billionaire-ray-dalio-crypto-now-070519526.html)

[2] Billionaire Ray Dalio Explains Why Bitcoin Gains With US ... (https://coingape.com/billionaire-ray-dalio-explains-why-bitcoin-gains-with-us-dollar-collapse/)

[3] Ray Dalio says America's 'debt-induced heart attack' will ... (https://fortune.com/2025/09/02/ray-dalio-america-debt-induced-heart-attack-trump/)