Ray Dalio told investors to underweight bonds and hold more gold and some Bitcoin as U.S. federal debt crossed $40 trillion. His comments landed as Bitcoin rallied toward $80,000 and the Treasury moved to double its long-dated debt buybacks.
Ray Dalio said the U.S. government's financial position has reached an inflection point as its debt burden nears a level that could become difficult to manage. The Bridgewater Associates founder advised spreading exposure across asset classes and countries with strong finances, while underweighting debt assets like bonds.
According to Dalio's X post, he advised "overweighting gold and a bit of Bitcoin." He said a gold allocation could run 10% to 15% of a portfolio to lower overall risk. Bitcoin received a more limited endorsement, positioned as one option outside conventional debt markets rather than a replacement for it. Dalio has held this view since 2021, when he first disclosed owning some Bitcoin and began describing it as a gold-like, alternative asset.
U.S. debt crosses $40 trillion
His remarks followed a milestone in U.S. public finances. Total federal debt reached $40.047 trillion on Aug. 18, up from $39.987 trillion the prior day, according to Treasury Department data. The government ended 2025 with $37.64 trillion in federal debt, meaning the total grew by about $2.4 trillion in under eight months.
Dalio's guidance rests on diversification and reducing dependence on assets tied to heavily indebted governments, not a prediction that Bitcoin rises whenever federal debt increases. He said government finances should be repaired while the economy remains relatively strong, since borrowing needs tend to grow during a downturn.
Bitcoin rallies toward $80,000
Bitcoin's advance has placed Dalio's comments against a sharp shift in crypto market conditions. BTC fell to the $62,000 to $63,000 area earlier this week before recovering through $70,000 and entering the upper $70,000 range, its highest level since May.
Forced buying from short sellers helped drive the initial breakout: when Bitcoin crossed $69,000, exchanges liquidated more than $1 billion in bearish positions within one hour. Spot demand then added support, as U.S. spot Bitcoin ETFs attracted about $517 million on Aug. 19 and another $606 million on Aug. 20, more than $1.1 billion combined.
Treasury doubles long-dated debt buybacks
The U.S. Treasury also announced on Aug. 19 that it would raise the maximum size of liquidity-support buybacks for longer-dated securities from $2 billion to at least $4 billion per operation, covering the 10-to-20-year and 20-to-30-year maturity sectors. The change takes effect Sept. 9 and runs through Nov. 4.
These operations are not Federal Reserve asset purchases or direct support for cryptocurrency, but long-dated Treasury yields declined after the announcement as demand for risk assets improved. The Fed itself remains a separate risk factor: it held its target rate at 3.5% to 3.75% in July, with three officials dissenting in favor of a quarter-point increase, ahead of its next decision on Sept. 15-16.
Source: crypto.news
Trading involves risk.
Risk Disclaimer
