Ray Dalio says investors should own ‘a bit of Bitcoin’ as U.S. debt risks rise
Investor Ray Dalio suggests that rising U.S. debt and potential currency devaluation make gold and Bitcoin attractive hedges for portfolios. He warns that government debt buybacks are a temporary fix for thinning demand and recommends diversifying away from bonds.
Why it matters
Dalio's perspective on macroeconomic risks and asset allocation provides insight into how institutional investors view current fiscal instability.
The Bridgewater Associates founder said Friday that several recent moves in government bond markets fit the pattern he described in his book How Countries Go Broke. Those include Japan selling some of its U.S. Treasury holdings, long-term U.S. bond yields rising alongside a weaker dollar, and Treasury Secretary Scott Bessent announcing that the government would increase buybacks of own bonds.
Crypto investors widely attributed last week's rally to the buyback tweaks, with bitcoin climbing from about $63,500 on Wednesday to above $78,000 by Saturday and roughly $4 billion of bearish positions force-closed along the way. Dalio says governments buy back their own debt when demand for it is thinning, and that Bessent has only limited capacity to keep doing it.
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