Bitcoin News Today: Ray Dalio urges 15% Bitcoin, gold allocation to hedge U.S. debt crisis, currency devaluation risks

Ray Dalio, founder of Bridgewater Associates, has advised investors to allocate 15% of their portfolios to Bitcoin and gold as a hedge against the risks posed by the U.S. debt crisis and potential currency devaluation. This recommendation, outlined during an appearance on the Master Investor podcast, marks a significant shift from his prior stance, where he suggested a 1%-2% Bitcoin allocation in January 2022. Dalio linked the advice to what he describes as a “debt doom loop,” driven by the U.S. government’s need to issue approximately $12 trillion in new Treasurys over the next year to service its $36.7 trillion national debt. A recent U.S. Treasury report corroborated these concerns, projecting $1 trillion in new borrowing for Q3 and $590 billion for Q4, exceeding initial estimates [1].

The investor emphasized that fiat currencies face systemic risks due to devaluation pressures, positioning gold and Bitcoin as “effective diversifiers.” While Dalio acknowledged his personal preference for gold—describing it as a more reliable hedge than Bitcoin—he noted that the allocation split between the two assets remains a matter of individual choice. Despite advocating for Bitcoin’s inclusion, he expressed skepticism about its potential as a reserve currency, citing the transparency of its transaction ledger as a barrier to adoption by central banks [1].

The U.S. debt trajectory has intensified global concerns, with Dalio extending his “debt doom loop” analysis to other Western economies, including the United Kingdom. He highlighted similar patterns of rising debt, stagnant growth, and inflationary pressures, which he argues create fertile ground for economic instability [2]. This perspective aligns with recent market dynamics, where gold and Bitcoin have reached multi-month highs amid investor caution. Bitcoin, trading at $118,100 as of the latest data, remains 4% below its July 2024 peak, while gold has seen repeated record-breaking performance [1].

Dalio’s 15% allocation proposal has sparked debate among market participants. Analysts note that Bitcoin’s volatility, though a drawback, is partially offset by its growing institutional adoption and perceived scarcity, which bolster its case as a long-term store of value [3]. Gold, meanwhile, continues to attract interest during inflationary periods but has shown signs of weakening as risk-on sentiment gains traction. Dalio framed his recommendation as a proactive strategy rather than a speculative bet, targeting investors seeking resilience against structural fiscal challenges.

The call for diversification into non-sovereign assets reflects a broader reevaluation of risk management paradigms. By prioritizing Bitcoin and gold, Dalio challenges traditional assumptions about safe-haven investments, arguing that the erosion of fiat currency value may render conventional hedges inadequate. This stance resonates with ongoing discussions on monetary policy, where concerns over debt sustainability and currency devaluation persist as critical risks.

Market responses to Dalio’s warnings have been mixed. While Bitcoin fluctuates amid shifting investor sentiment, indices like the FTSE 100 have reached record highs, driven by corporate earnings and trade optimism [4]. This divergence underscores the complexity of aligning macroeconomic forecasts with asset performance. Nevertheless, Dalio’s recommendations reinforce the idea that conventional asset classes may struggle to provide adequate protection in an environment of prolonged fiscal expansion.

As investors weigh the implications of rising debt and policy-driven uncertainties, the focus remains on how structural challenges will evolve. Dalio’s 15% allocation proposal, though specific, reflects a broader call to rethink portfolio strategies in the face of macroeconomic headwinds. The U.S. and UK, despite differing economic contexts, share common threads of rising debt and policy-driven risks, underscoring the need for adaptive approaches to asset allocation.

Source: [1] [title1: Bitcoin News Today: Dalio urges 15% allocation to gold, ...] [url1: https://www.ainvest.com/news/bitcoin-news-today-dalio-urges-15-allocation-gold-bitcoin-hedge-inflation-debt-risks-2507/], [2] [title2: UK in 'debt doom loop', top investor Dalio warns] [url2: https://uk.news.yahoo.com/uk-debt-doom-loop-top-064000079.html], [3] [title3: Latest Gold News, Prices & Rates Across the World ...] [url3: https://www.metalsdaily.com/], [4] [title4: Fund manager warns Reeves of 'doom loop' and FTSE 100 ...] [url4: https://www.the-independent.com/news/business/latest-news-updates-ftse-100-stocks-money-b2796104.html]