Ray Dalio Warns Rising U.S. Debt Could Trigger Crisis, Favors Bitcoin and Gold

Highlights:

• Dalio says rising U.S. debt and weak bond demand could bring a serious debt crisis closer.
• He tells investors to hold fewer bonds, more gold, and a small amount of Bitcoin.
• He says large deficits and rising debt payments are putting more pressure on U.S. finances.

Billionaire investor Ray Dalio has warned that rising U.S. debt and weaker demand for government bonds could push the country toward a serious debt crisis. He advised investors to cut exposure to bonds, favor gold and keep a smaller position in Bitcoin as protection against currency weakness.

Dalio shared his warning in an August 21 post on X titled “How Countries Go Broke: The Dynamic Behind What is Happening Now.” He said recent moves in global bond markets fit the debt-cycle pattern he described in his book, How Countries Go Broke: The Big Cycle.

Dalio pointed to three developments. First, Japan has sold some of its U.S. Treasury holdings to bring money back home, support the yen and reduce its exposure to U.S. debt. Second, long-term U.S. bond yields have climbed while the dollar has weakened. Third, Treasury Secretary Scott Bessent announced that the U.S. Treasury would buy Treasury bonds, although Dalio said the government has limited capacity to do so.

🔥BULLISH: Ray Dalio says sell bonds, buy gold and Bitcoin.

The Bridgewater founder warns a U.S. debt crisis could arrive "in three years, give or take two."

He recommends 10–15% of a portfolio in gold and "a bit" of Bitcoin to reduce risk. pic.twitter.com/9yvQjS1cZu

— Coin Bureau (@coinbureau) August 21, 2026

Ray Dalio Warns U.S. Debt Pressure Is Growing

Dalio said debt problems become harder to control when governments spend more of their revenue on interest and repayments. The pressure rises further when investors stop buying new debt or refuse to roll over existing bonds.

He explained:

“When debt service payments become very large, that creates a debt service problem and eventually a debt rollover problem as holders of the debt don’t want to roll it over and want to sell it.”

Weak bond demand can force policymakers into difficult choices. Governments may have to offer higher interest rates to attract buyers. However, higher rates can hurt financial markets, businesses and the broader economy.

Central banks can also step in and buy government debt with newly created money. Dalio warned that this approach can weaken the currency and push inflation higher. If governments keep borrowing while central banks keep creating money, the process can turn into a cycle of higher debt, more money creation and rising inflation. Dalio said investors should watch three main areas: government debt-service costs compared with revenue, bond supply compared with investor demand, and central bank money creation used to support debt markets.

U.S. Faces Large Deficit and Rising Debt Costs

Dalio estimated that the U.S. government will collect about $5.5 trillion in revenue this year while spending around $7.5 trillion. That would leave a budget deficit of about $2 trillion. He also estimated federal debt at roughly $32 trillion when excluding intergovernmental holdings. At the same time, the government faces an annual interest bill of around $1 trillion. Around $10 trillion in debt principal is also coming due and will need repayment or refinancing.

Dalio warned that the problem could grow over the next decade. He said independent projections put U.S. debt at around $55 trillion to $60 trillion within ten years if the country stays on its current path. That would increase debt-servicing costs and force the government to depend even more on investors continuing to buy Treasury securities.

To reduce the risk, Dalio wants the government to bring the budget deficit down to about 3% of GDP. His plan combines spending cuts, higher tax revenue and lower interest rates instead of relying heavily on one measure.

Ray Dalio Favors Gold and Some Bitcoin Over Bonds

Dalio said debt problems also affect other major economies, including the UK, European Union, China and Japan. He expects governments to respond to heavy debt loads through lower rates, more borrowing or money creation. Those policies can weaken currencies over time and increase demand for assets that governments cannot easily create.

Dalio wrote:

“That is why I expect a similar debt and currency devaluation adjustment process in most economies, which is why I expect non-government-produced monies like gold and Bitcoin to do relatively well.”

For investors, Dalio recommended broad diversification across assets and countries with stronger financial positions. He also advised reducing exposure to debt assets such as bonds while holding more gold and a smaller amount of Bitcoin. Dalio said investors could keep around 10% to 15% of their money in gold to reduce portfolio risk and potentially improve returns. He did not give a specific Bitcoin allocation, but he described it as a smaller position alongside gold.

Dalio is not the only one pointing to Bitcoin as a possible hedge against a weaker dollar. In an August 20 report, 21Shares said investors turned to scarce assets like Bitcoin after the U.S. Treasury expanded its long-term bond buyback program. The firm said the move looked similar to monetary easing, which helped support demand for Bitcoin.