Ray Dalio, founder of Bridgewater Associates, warned that the U.S. is on the verge of a “debt-fueled heart attack” — and argued that outcome could make scarce digital assets like Bitcoin and traditional hedges like gold more attractive to investors.
In a recent interview with the Financial Times, Dalio laid out a scenario where rising U.S. debt and large budget shortfalls prompt creditors to sell Treasuries. That would put the Federal Reserve in a bind: either let interest rates rise (risking debt-service stress and potential defaults) or print money to buy debt and hold real rates down, which would erode the value of money.
Dalio framed this as the painful final phase of a historical pattern he calls a “big debt cycle,” where excessive leverage ends in systemic contraction. He argued that it’s not deregulation but unsustainable debt levels that threaten the dollar’s appeal as a reserve currency — a dynamic he believes is lifting both gold and crypto prices.
He pointed to market moves this year as context: gold is up significantly year-to-date (cited as a 38% gain and a recent high by Trading Economics) and Bitcoin has also rallied (cited as up about 20% over the same period by CoinGecko). Dalio noted a structural reason crypto could benefit: limited supply. Bitcoin’s supply is capped at 21 million, while fiat can be expanded by policymakers.
Earlier this summer Dalio suggested investors consider allocating about 15% of a portfolio to a mix of Bitcoin and gold as a macro hedge against increasing risks in bond and equity markets. He still expressed a preference for gold, saying central banks are unlikely to adopt Bitcoin as an official reserve asset despite crypto’s emerging role as an alternative “hard” currency.
Risk awareness: Dalio’s view is a macro opinion, not investment advice. Cryptocurrencies remain volatile and speculative; changes in regulation, monetary policy, or demand could reverse price moves. Investors should weigh volatility, liquidity and regulatory risk before reallocating portfolios.
Source: Decrypt. Read the original coverage for full details.