Ray Dalio Warns of US Debt Crisis, Says Investors Should Hold Bitcoin

American investor Ray Dalio has cautioned investors about the growing US debt burden, and recommended to include some Bitcoin in their portfolio. According to the Bridgewater Associates founder, the US government’s rising debt, higher bond yields, and weaker dollar could create more pressure across broader financial markets.

Amid these issues, Dalio recommends investors explore assets outside the traditional financial system. He views gold and Bitcoin as suitable options. Dalio believes that these assets could protect investors if the government moves toward currency devaluation or increased money creation.

Ray Dalio sees Bitcoin as a hedge against US debt risks

As the US government is currently facing growing debt pressures, Ray Dalio asserts that Bitcoin could play role in investor portfolios. The rising debt burden could put more pressure on the dollar and make US government bonds less attractive to investors. Here, Bitcoin exposure could help them, especially when the dollar weakens and bond markets come under pressure.

Further validating his points, Dalio highlighted recent developments in the bond market that reflect the growing risks. For example, Japan has been reducing some of its US Treasury holdings. Long-term US bond yields continue to rise amid a weakening dollar. Meanwhile, Treasury Secretary Scott Bessent revealed the government’s decision to increase bond buybacks. Dalio added that these moves align with the debt-cycle pattern he described in his book How Countries Go Broke.

Notably, Ray Dalio has long been cautioning investors about the growing size of US debt. Now, the latest concerns come as the US debt crossed the $40 million mark for the first time in history. In this situation, he sees Bitcoin and gold as two major assets that could hedge against the rising risks. He added,

“As general advice, I suggest diversifying well in asset classes and countries that have strong income statements and balance sheets and are not having great internal political and external geopolitical conflicts, underweighting debt assets like bonds, and overweighting gold and a bit of Bitcoin.”

Dalio explains why BTC could benefit

Besides the US, other major economies are also facing high debt and large deficits, added Ray Dalio. He pointed to the similar challenges faced by the UK, Europe, Japan, and other economies. Dalio believes that gold and Bitcoin could benefit from these crises as they are not issued by the governments.

Dalio’s changing views on Bitcoin also highlight his confidence in the cryptocurrency. Although he was once skeptical about BTC, he later revealed that he held a small amount of the crypto. In 2025, Dalio stated that 1% of his portfolio occupies BTC while he continues to warn about the crypto’s inherent risks.

How much Bitcoin does Dalio recommend?

Significantly, Ray Dalio has recommended investors reduce their exposure to bonds. Instead of bonds, he urges them to allocate 10% to 15% of their portfolios to gold. At the same time, he added that the portfolio should also hold a “bit of Bitcoin.”

As Dalio hasn’t provided a clear picture of how much Bitcoin should be allocated, investors are now left to decide on their own. Last year, he suggested allocating about 15% of the portfolio to gold or Bitcoin, while he had previously recommended only 1-2% in 2022.