Bitcoin News Today: Ray Dalio Advises 15% Bitcoin or Gold Allocation Amid U.S. Debt Risks

Legendary investor Ray Dalio has advised allocating 15% of investment portfolios to Bitcoin or gold, citing growing risks of “classic devaluation” in fiat currencies due to unsustainable U.S. debt levels. The recommendation, made during a Master Investor podcast appearance, underscores concerns about a fiscal crisis that Dalio compares to historical collapses of reserve currencies in the 1930s and 1970s. He warned that the U.S. government spends $7 trillion annually while collecting only $5 trillion in revenue, creating a $2 trillion deficit that necessitates $12 trillion in new debt issuance over the next year. With interest payments alone consuming $1 trillion annually—half the budget shortfall—Dalio described the situation as reaching a “point of no return” [1].

The Bridgewater Associates founder emphasized that federal debt now stands at six times annual tax revenue, and spending cuts are politically infeasible due to fixed obligations. He likened the buildup to a “plaque in an artery,” warning that without corrective action, debt accumulation will spiral beyond control. Dalio proposed a “3% solution,” calling for immediate fiscal discipline to reduce the deficit from 7.5% to 3% of GDP through tax hikes and spending cuts. However, he expressed skepticism about political will to implement such measures, noting historical precedents like the 1991–1998 deficit reduction did not guarantee future success [1].

While preferring gold as a reserve asset, Dalio acknowledged Bitcoin’s appeal as a hedge against devaluation. He highlighted Bitcoin’s limited supply and global transaction utility but questioned its suitability as a central bank reserve due to privacy concerns. The 15% allocation recommendation reflects an optimization for risk-adjusted returns, balancing gold’s established role with Bitcoin’s potential as a store of value. “If you were neutral on everything and optimizing for return-to-risk ratio, you’d have about 15% in gold or Bitcoin,” Dalio stated [1].

Technical analysis suggests Bitcoin could target $135,000–$155,500 by October, following a three-year ascending channel pattern. Current trading near $119,000 shows proximity to key resistance at $119,500, with a breakout potentially triggering a rapid advance to $135,000 within weeks. The cryptocurrency’s value proposition is further supported by accelerating monetary debasement, as M2 money supply expanded to $22.02 trillion. Analysts note Bitcoin’s historical correlation with money supply growth and its role as a hedge against fiat depreciation [1].

Dalio’s warnings align with broader macroeconomic trends, including the U.S. dollar’s 96% loss of purchasing power since 1913 and global central banks’ coordinated devaluation strategies. Federal debt now exceeds 125% of GDP, the highest among industrialized nations, while the fiscal deficit of 7% of GDP exacerbates pressure on currency stability. Historical parallels to the decline of the British pound and Dutch guilder underscore the risks of unchecked debt. Dalio argued that without structural reforms, the U.S. risks repeating past collapses of reserve currencies [1].

The U.S.-EU trade deal’s resolution has briefly improved market sentiment, with Bitcoin recovering toward $119,000 as tariffs were reduced from 30% to 15%. However, the Federal Reserve’s upcoming meeting remains a critical catalyst, with dovish rhetoric potentially fueling risk-on sentiment. MVRV ratio analysis also suggests a peak window for Bitcoin between late August and September, though this remains speculative and dependent on market dynamics [1].

[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/)