Bitcoin News Today: Ray Dalio Triples Bitcoin and Gold Allocation to 15% Amid U.S. Debt Doom Loop

Hedge fund icon Ray Dalio has revised his portfolio recommendations amid growing concerns over the U.S. debt crisis, advising investors to allocate 15% of their assets to Bitcoin or gold as a hedge against currency devaluation. This marks a significant departure from his earlier 1%-2% Bitcoin allocation in January 2022, reflecting a deteriorating fiscal outlook as the U.S. national debt nears $36.7 trillion. Dalio, founder of Bridgewater Associates, cited Treasury data projecting an additional $12 trillion in borrowing over the next year to service obligations, warning of a "debt doom loop" driven by rising debt burdens and weakening currencies [1].

The U.S. Treasury’s recent report underscored the urgency, revealing a $1 trillion borrowing requirement for the third quarter—$453 billion higher than previously estimated—due to weaker cash flows and declining reserves. This aligns with Dalio’s assertion that the government’s reliance on debt will worsen, compounding risks to the dollar’s purchasing power [2]. His analysis extends to Western economies like the U.K., which he described as facing similar fiscal challenges, with currencies likely to underperform against hard assets like Bitcoin and gold [3].

Despite advocating for the 15% allocation, Dalio clarified his personal preference for gold over Bitcoin. While he holds both, he emphasized gold’s established status as a store of value, contrasting it with Bitcoin’s speculative nature. He remains skeptical about Bitcoin’s potential as a reserve currency, citing its lack of privacy and transparent transaction records as barriers to adoption by central banks. "Governments can see who is doing what transactions on it," he noted, suggesting vulnerabilities in Bitcoin’s code could undermine its credibility as an alternative money [1].

Bitcoin and gold have seen robust performance in recent months, with Bitcoin trading near $118,100—approximately 4% below its July all-time high—and gold hitting record levels multiple times. Dalio’s revised allocation strategy highlights a broader narrative of devaluation risks, positioning the two assets as tools to counteract the systemic inflationary pressures tied to the "doom loop" of debt-driven fiscal policies. However, critics argue Bitcoin’s technological and regulatory uncertainties limit its effectiveness as a long-term hedge, even as its volatility remains a hurdle for mainstream adoption [1].

The timing of Dalio’s remarks coincides with a fiscal path where U.S. deficits are projected to rise, intensifying debates about the role of alternative assets in institutional portfolios. His 15% guidance diverges from conventional strategies, which typically assign smaller weights to cryptocurrencies and precious metals. Analysts have linked the growing debt crisis to increased demand for hard assets, though the practicality of such a large allocation in volatile markets remains contentious. Dalio’s comments, however, underscore a strategic pivot toward asset classes perceived as more resilient to systemic financial instability [1].

Sources:

[1] [Ray Dalio Suggests 15% Portfolio Allocation To Bitcoin](https://cointelegraph.com/news/ray-dalio-suggests-15-percent-bitcoin-allocation)

[2] [Ray Dalio triples Bitcoin, gold allocation to 15% amid U.S. ...](https://www.ainvest.com/news/bitcoin-news-today-ray-dalio-triples-bitcoin-gold-allocation-15-debt-doom-loop-2507/)

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