Bitcoin News Today: Ray Dalio Advises 15% Bitcoin/Gold Allocation Citing U.S. Debt-Driven Fiat Devaluation Risk

Legendary investor Ray Dalio has advised allocating 15% of portfolios to Bitcoin or gold, citing concerns over the devaluation of fiat currencies driven by unsustainable U.S. debt levels. During a recent appearance on the Master Investor podcast, Dalio highlighted the federal government’s annual $2 trillion deficit and $1 trillion in interest payments, warning that the debt-to-revenue ratio—now at six to one—has reached a “point of no return” [1]. He likened the situation to historical precedents such as the 1930s and 1970s, where excessive debt accumulation led to currency collapses [1].

Dalio emphasized that fiat currencies are entering a “classic devaluation” phase, a process he described as inevitable given the mechanics of debt accumulation. The U.S. federal debt, currently at 125% of GDP, exceeds deficits seen in other industrialized nations by significant margins. Dalio proposed a “3% solution,” advocating for immediate fiscal discipline to reduce the deficit from 7.5% to 3% of GDP through tax increases and spending cuts. However, he expressed skepticism about political will to implement such measures, noting that higher taxes could drive wealthy individuals to relocate, exacerbating revenue shortfalls [1].

While Dalio favors gold as a reserve asset—citing its established role in central banking—he acknowledged Bitcoin’s potential as a hedge against fiat devaluation. He described Bitcoin’s limited supply and global transaction capabilities as strengths, though he questioned its privacy limitations for central bank use. The recommendation aligns with Bitcoin’s current price near $119,000, where technical analysis suggests a potential rally toward $135,000–$155,000 if it breaks above key resistance levels [1].

The U.S. dollar has lost 96% of its purchasing power since 1913, with the gold standard’s 1971 termination accelerating this decline. Dalio argued that all major fiat currencies are likely to depreciate together, creating a coordinated devaluation environment rather than competitive ones. This dynamic, he noted, mirrors the decline of historical reserve currencies like the British pound and Dutch guilder [1].

Technical indicators support Dalio’s outlook. Bitcoin is testing the upper boundary of a three-year ascending channel, with gains of 106% and 197% in its first two legs of the cycle. Analysts suggest a third leg could target $155,500 by October, assuming continued M2 money supply growth and a breakout above $119,500. The MVRV ratio—a metric tracking realized value versus market value—also signals a potential cycle peak between late August and September, aligning with historical patterns from 2021 [1].

The U.S.-EU trade deal’s resolution has temporarily bolstered market sentiment, with Bitcoin recovering toward $119,000 after tariffs were reduced from 30% to 15%. However, the Federal Reserve’s upcoming policy decisions will remain critical in shaping Bitcoin’s trajectory. A dovish stance could further fuel risk-on sentiment, potentially accelerating its path toward cycle highs.

Source: [1] [Billionaire Ray Dalio Recommends 15% Bitcoin Allocation as Fiat Currencies Face ‘Classic Devaluation’] [https://cryptonews.com/news/billionaire-ray-dalio-recommends-15-bitcoin-allocation-as-fiat-currencies-face-classic-devaluation/]