Ray Dalio Backs Bitcoin as U.S. Debt Risks Mount

Billionaire investor Ray Dalio says investors should consider owning “a bit of Bitcoin” as mounting U.S. government debt threatens to weaken the dollar and reduce the appeal of Treasury bonds.

The Bridgewater Associates founder said Friday that recent developments in global bond markets resemble patterns outlined in his book How Countries Go Broke. He pointed to Japan reducing some U.S. Treasury holdings, rising long-term U.S. yields despite a weaker dollar, and Treasury Secretary Scott Bessent’s decision to increase government bond buybacks.

Bitcoin recently surged from about $63,500 on Wednesday to above $78,000 by Saturday, with roughly $4 billion in bearish crypto positions liquidated during the rally. Crypto investors partly attributed the sharp Bitcoin price increase to changes in the Treasury buyback program.

Dalio said governments may repurchase their debt when investor demand weakens, but warned that the Treasury has limited capacity to sustain such intervention.

The U.S. government is projected to collect around $5.5 trillion in revenue this year while spending approximately $7.5 trillion, creating a deficit of about $2 trillion. Federal debt held outside government accounts is near $32 trillion, while annual interest expenses are expected to approach $1 trillion.

Weak Treasury demand could force the government to offer higher yields, increasing borrowing costs and potentially pressuring financial markets and economic growth. Alternatively, the Federal Reserve could create money to purchase additional government debt, a move Dalio believes could fuel inflation and weaken the U.S. dollar.

Dalio expects similar debt pressures to affect the U.K., European Union, China and Japan. Against that backdrop, he believes non-government assets such as gold and Bitcoin could outperform as fiat currencies lose purchasing power.

The veteran investor recommends underweighting bonds and allocating roughly 10% to 15% of a portfolio to gold, while also holding some Bitcoin. He did not specify a Bitcoin allocation this time, although in 2025 he suggested investors consider putting 15% into “gold or Bitcoin.”

Dalio acknowledged that his debt warnings have previously appeared premature but estimates the U.S. could face a debt crisis in roughly three years.