Billionaire investor Ray Dalio has renewed his support for holding gold and some Bitcoin as U.S. federal debt has crossed $40 trillion, and BTC has rallied toward $80,000.
Ray Dalio, writing in an X post, said the U.S. government’s financial position had reached an inflection point as its debt burden approached a level that may become difficult to manage without severe economic pain.
The Bridgewater Associates founder advised investors to spread their exposure across asset classes and countries with strong finances. He also recommended limiting exposure to debt assets such as bonds while holding more gold and a smaller allocation to Bitcoin.
“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 said.
His comments followed another major milestone for U.S. public finances. The federal government’s total outstanding debt reached $40.047 trillion on Aug. 18, up from $39.987 trillion one day earlier, according to the Treasury Department’s Debt to the Penny database.
Of the Aug. 18 total, approximately $32.27 trillion was debt held by the public, while about $7.78 trillion consisted of intragovernmental holdings. The government ended 2025 with $37.64 trillion in federal debt, meaning the total had increased by about $2.4 trillion in less than eight months.
Dalio said an allocation of roughly 10% to 15% to gold could lower a portfolio’s overall risk because the metal often behaves differently from stocks and debt securities during periods of financial stress.
Bitcoin received a more limited endorsement. Dalio described it as part of the group of assets investors could hold outside conventional debt markets, though his suggested positioning still placed more weight on gold.
His latest statement follows years of gradually changing views on the cryptocurrency. Dalio disclosed in 2021 that he owned some Bitcoin and later described it as an alternative, gold-like asset, while continuing to question whether governments and central banks would adopt it as reserve money.
In October 2025, crypto.news examined Dalio’s position that Bitcoin was unlikely to become a reserve currency. The report noted that he favored gold because of its long history, liquidity, and acceptance among central banks, even as he recognized Bitcoin as a possible hedge against monetary expansion and heavy government borrowing.
Dalio’s portfolio guidance is not a prediction that Bitcoin will rise whenever federal debt increases. His recommendation rests on diversification and reducing dependence on assets tied to highly indebted governments, rather than replacing an entire investment portfolio with BTC or gold.
For U.S. investors, both assets are available through regulated products as well as direct ownership. Spot Bitcoin exchange-traded funds provide exposure through U.S. brokerage and retirement accounts, while gold can be held through exchange-traded products, mining shares, or physical bullion. Each route carries different fees, custody risks, and tax treatment.
Bitcoin’s advance has placed Dalio’s comments alongside a sharp change in crypto market conditions. BTC fell to the $62,000–$63,000 area earlier this week before recovering through $70,000 and entering the upper $70,000 range.
The move ended several weeks of sideways trading and pushed Bitcoin to its highest level since May. BTC was trading near $77,600 when checked, according to market data, leaving the $80,000 level as the next closely watched psychological barrier.
Forced buying from short sellers helped accelerate the initial breakout. When Bitcoin crossed $69,000, exchanges liquidated more than $1 billion in bearish positions within one hour, requiring some traders to purchase BTC to close leveraged bets.
Spot demand then added support. U.S. spot Bitcoin ETFs attracted about $517 million on Aug. 19 and another $606 million on Aug. 20, according to SoSoValue data cited in recent market coverage. The two sessions generated more than $1.1 billion in combined net inflows.
As previously reported, Bitcoin gained about 18% in two days before clearing $76,000. The report identified $70,000 to $72,000 as an important support area, while resistance remained near $80,000 to $82,000.
ETF inflows offer a direct U.S. connection to the rally because the funds must obtain Bitcoin exposure as investors add capital. Short liquidations, by comparison, represent forced derivatives activity that may fade once leveraged bearish positions have been closed.
Alongside the $40 trillion debt milestone, the U.S. Treasury announced on Aug. 19 that it would increase the size of liquidity-support buybacks for longer-dated nominal government securities.
The maximum purchase size will rise from $2 billion to at least $4 billion per operation for securities in the 10-to-20-year and 20-to-30-year maturity sectors, according to the Treasury’s official announcement. The change takes effect on Sept. 9 and will remain in place through Nov. 4, when the department plans to provide further information during its next quarterly refunding.
Treasury said the increase would provide more liquidity in long-dated sectors where market participants had submitted a high volume of eligible offers. Buybacks allow the government to repurchase older, less-liquid bonds and may improve trading conditions in parts of the Treasury market.
The operations are not Federal Reserve asset purchases, money creation or direct support for cryptocurrency. Market participants nevertheless responded to the announcement as long-dated Treasury yields declined and demand for risk assets improved.
A recent market report linked Bitcoin’s initial 11.4% rise above $71,000 to the buyback announcement, renewed ETF inflows and short liquidations. The report said Treasury’s decision helped the liquidity backdrop but did not establish that bond buybacks alone caused the rally.
Dalio’s warning addressed the underlying debt burden rather than the mechanics of the buyback program. He said government finances should be repaired while economic conditions remain relatively strong because borrowing requirements tend to increase during a contraction.
Policies, political changes, and wars could either speed up or delay the point at which debt becomes unmanageable, according to Dalio. Waiting for an economic downturn would leave policymakers with fewer options because weaker tax revenue and additional government support programs typically increase funding needs.
While lower long-term yields have supported Bitcoin, Federal Reserve policy remains a separate source of risk for U.S. investors. The Fed kept its target rate at 3.5% to 3.75% in July but faced three dissenting votes from officials who preferred a quarter-point increase.
In its July policy statement, the Federal Open Market Committee said inflation remained above its 2% goal, partly because supply shocks had raised prices in sectors including energy. The committee also said it would “deliver price stability.”
Fed Chair Kevin Warsh and the committee face another policy decision on Sept. 15–16. Higher interest rates can raise the returns available on cash and government bonds, which may reduce demand for non-yielding assets such as gold and volatile assets such as Bitcoin.
The July vote showed that pressure for tighter policy already existed inside the Fed. Beth Hammack, Neel Kashkari, and Lorie Logan opposed the decision to hold rates steady and supported a 25-basis-point increase instead.
