Ray Dalio Expects US Debt Crisis Within Approximately 3 Years: Suggests Some Bitcoin

Renowned investor Ray Dalio stated that the US’s growing debt burden could weaken the dollar and bonds, recommending “some Bitcoin” and 10-15% gold in portfolios; Dalio expects a debt crisis within approximately three years.

As reported by CoinDesk, Dalio, the founder of Bridgewater Associates, said in an assessment on Friday that recent developments in the US debt market align with the cycle he described in his book How Countries Go Broke. Japan’s sales of US Treasuries, the weakening of the dollar as long-term bond yields rise, and the Treasury’s plan to increase bond buybacks were among these signs.

According to Dalio’s calculations, the US government will generate approximately $5.5 trillion in revenue this year while spending $7.5 trillion. This means a deficit of approximately $2 trillion. Excluding debt the government owes to its own agencies, federal debt stands at $32 trillion, while interest expenses alone reach approximately $1 trillion.

US debt risk highlights Bitcoin and gold

If investors become reluctant to buy government bonds, the government must offer higher yields to attract more buyers. As bond yields rise, the government’s borrowing costs increase. If the central bank chooses to create money to buy the debt, the value of the dollar could decline and inflation could rise. According to Dalio, neither option is healthy.

For this reason, Dalio suggests underweighting bonds, allocating 10-15% of the portfolio to gold, and holding some Bitcoin. However, he did not share a clear target ratio for Bitcoin. Dalio had suggested allocating 15% of the portfolio to gold or Bitcoin in 2025, while his Bitcoin recommendation in 2022 had remained at the 1-2% level. He believes these assets, which are not issued by the government, could perform relatively well if currencies lose value.