Bitcoin News Today: Ray Dalio triples Bitcoin, gold allocation to 15% amid U.S. debt doom loop

Ray Dalio, founder of Bridgewater Associates, has advised investors to allocate 15% of their portfolios to Bitcoin or gold as a hedge against the risks posed by the U.S. debt crisis, which he terms a “debt doom loop.” The recommendation, outlined during a recent appearance on the Master Investor podcast, marks a significant increase from his earlier 1% to 2% allocation for Bitcoin in January 2022 [1]. Dalio emphasized that fiat currencies face devaluation risks amid expanding fiscal policies, making non-sovereign assets like gold and Bitcoin critical for optimizing return-to-risk ratios [2].

The U.S. national debt has surged to $36.7 trillion, with the Treasury projecting an additional $12 trillion in bond issuance over the next year to service obligations. A recent Treasury report highlighted $1 trillion in new borrowing for Q3 2023—$453 billion above prior estimates—and $590 billion expected for Q4, exacerbating concerns about fiscal sustainability [3]. Dalio extended his analysis to Western economies, noting that countries like the U.K. also face similar “debt doom loop” dynamics, where currency depreciation and debt accumulation create a compounding cycle [4].

While advocating for Bitcoin as a diversifier, Dalio expressed skepticism about its potential as a reserve currency. He cited the transparency of its transactions and the lack of privacy as barriers to adoption by central banks, arguing that vulnerabilities in its code could undermine its utility as an alternative monetary system [5]. Despite this, Bitcoin and gold have seen strong performance in recent months, with Bitcoin trading near $118,100 and gold reaching multi-month highs.

Dalio’s strategy reflects a broader macroeconomic framework focused on systemic risk mitigation. Bridgewater’s historical emphasis on navigating large-scale financial cycles aligns with his call for a 15% allocation to assets that counterbalance inflation and currency devaluation. The recommendation challenges conventional portfolio allocations, which typically prioritize equities and bonds, and instead highlights the need for defensive positioning amid growing fiscal instability [6].

The investor’s comments gain relevance as central banks grapple with balancing inflation control and economic growth. While short-term stability has been bolstered by measures like the U.S.-EU trade deal—featuring a 15% tariff framework—long-term uncertainties persist. Dalio’s analysis underscores the erosion of fiat currency purchasing power, a trend amplified by rising debt and inflationary pressures, which he views as a catalyst for reallocating wealth toward hard assets [7].

Sources:

[1] [Bitcoin News Today: Dalio urges 15% allocation to gold, Bitcoin](https://www.ainvest.com/news/bitcoin-news-today-dalio-urges-15-allocation-gold-bitcoin-hedge-inflation-debt-risks-2507/)

[2] [Latest Gold News, Prices & Rates Across the World](https://www.metalsdaily.com/)

[3] [US-EU trade deal agreed at 15% tariff base](https://www.the-independent.com/news/business/latest-news-updates-ftse-100-stocks-money-b2796104.html)

[4] [UK in 'debt doom loop', top investor Dalio warns](https://uk.news.yahoo.com/uk-debt-doom-loop-top-064000079.html)

[5] [Ray Dalio suggests putting 15% in Bitcoin, gold amid US ‘debt doom loop’](https://coinmarketcap.com/community/articles/68881bdaee68857097c352ca/)

[6] [Monday papers: US and EU agree trade deal](https://citywire.com/new-model-adviser/news/monday-papers-us-and-eu-agree-trade-deal/a2470939)

[7] [Gavin Lumsden (@FundFanatic) / X](https://x.com/fundfanatic?lang=en)