Bitcoin News Today: "Ray Dalio Warns: Debt Could Force a Fiscal Reckoning and Fuel Flight to Alternatives"

Ray Dalio has issued a stark warning that surging U.S. debt could trigger a "debt-induced heart attack" within three years, a timeline tied to the fiscal policies of the current administration. The billionaire investor and Bridgewater Associates founder emphasized that the combination of increasing borrowing, high interest costs, and a shrinking capacity to generate tax revenue is unsustainable and could lead to a crisis of confidence in U.S. debt. According to Dalio, the U.S. government is projected to spend over $1 trillion annually on interest payments alone, representing 17% of the federal budget in 2025. This financial strain, he argued, is exacerbated by recent fiscal decisions such as the “One Big, Beautiful Bill Act,” which critics say will add $3.4 trillion to the national debt [1].

Dalio’s concerns are not isolated. Economists and financial experts have long warned of a looming national debt crisis, though the timing remains uncertain. The Congressional Budget Office (CBO) estimates that while some revenue from tariffs could offset part of the projected debt increase, it is insufficient to curb the long-term trajectory. The U.S. national debt now exceeds $37.3 trillion, and with rising deficits, the risk of a fiscal reckoning grows [1]. Dalio likened the U.S. economy to a circulatory system clogged with plaque, where excessive debt and rising interest payments crowd out essential spending. He warned that at some point, investors may lose confidence in U.S. debt, causing demand to shrink and triggering a crisis akin to the 2022 fiscal turmoil under UK’s Liz Truss [1].

Amid this backdrop, alternative assets such as gold and cryptocurrencies are gaining traction as investors seek to hedge against fiscal and monetary uncertainty. Dalio noted that high debt levels and eroding confidence in the U.S. dollar are driving demand for "hard currencies" like gold and Bitcoin. He described crypto as an "alternative currency with limited supply," which becomes increasingly attractive when fiat currencies lose value due to inflation or fiscal mismanagement. This dynamic mirrors historical patterns, such as the 1930s and 1970s, when declining trust in the dollar spurred a shift toward alternative assets [6].

Bitcoin’s role as a hedge is being reevaluated in the context of a rapidly evolving macroeconomic environment. While gold has traditionally acted as a safe haven during stock market downturns, Bitcoin has shown a unique correlation with bond markets. Analysts suggest that as U.S. Treasury yields rise and bond prices fall, Bitcoin has demonstrated resilience compared to gold. However, recent data indicates a divergence between gold and Bitcoin, with gold hitting record highs of $3,500 while Bitcoin lags. This gap has raised questions about whether Bitcoin can fulfill its promise as a hedge asset in a world increasingly wary of fiat currency [4].

The debate over crypto’s potential to replace the U.S. dollar as a global reserve currency remains contentious. Dalio acknowledged that while crypto is unlikely to fully displace the dollar in the near term, its growing adoption as a store of value could undermine the dollar’s dominance. He emphasized that the key factors shaping this transition are debt sustainability, geopolitical instability, and the perceived credibility of reserve currencies. Meanwhile, veteran investor Robert Kiyosaki has also advocated for allocating gold, silver, and Bitcoin in investment portfolios, citing the declining performance of government bonds in the U.S., Europe, and Britain [5]. These views align with broader investor sentiment, as evidenced by the inflow of funds into Bitcoin ETFs and a strategic shift away from traditional financial instruments [4].

As the Federal Reserve prepares for its next interest rate decision, market participants remain closely watching how monetary policy and fiscal decisions intersect. A potential rate cut could lower borrowing costs and boost risk assets, but it also risks exacerbating inflation and debt concerns. Analysts warn that if confidence in the dollar erodes further, investors may increasingly turn to alternative assets to preserve wealth. Dalio’s remarks underscore the urgency of addressing long-term debt challenges and highlight the growing role of crypto in the global financial landscape [1].

Source: [1] Ray Dalio says America's 'debt-induced heart attack' will happen in three years (https://fortune.com/2025/09/02/ray-dalio-america-debt-induced-heart-attack-trump/) [2] Bitcoin or Gold: Which Is the Better Hedging Asset in 2025? (https://finance.yahoo.com/news/given-trump-pro-crypto-stance-081241472.html) [3] Ray Dalio warns that US debt threatens the dollar and strengthens cryptocurrencies (https://www.bitgetapp.com/news/detail/12560604948558) [4] New gold record fires warning shot for Bitcoin, analysts say (https://finance.yahoo.com/news/gold-record-fires-warning-shot-113901036.html) [5] "Save Gold, Silver, and Bitcoin," Robert Kiyosaki Advises (https://coingape.com/robert-kiyosaki-says-save-gold-silver-and-bitcoin-while-expecting-europe-collapse/) [6] Crypto To Overtake The Dollar? Ray Dalio Flags End Of (https://www.mitrade.com/insights/news/live-news/article-3-1092861-20250903)