The Fed Can’t Save You — Dalio Reveals His Top Hedge Against US Collapse
The US national debt has soared to an eye-watering $37.1 trillion, triggering alarm bells across financial markets — and prompting legendary hedge fund manager Ray Dalio to issue a striking new recommendation: allocate 15% of your portfolio to Bitcoin or gold.
Dalio, the billionaire founder of Bridgewater Associates, sees hard assets as a crucial hedge against what he calls the “devaluation of money” caused by Washington’s relentless borrowing and rising interest obligations.
“If you were optimizing your portfolio for the best return-to-risk ratio, you would have about 15% of your money in gold or Bitcoin,” Dalio said during a recent Master Investor podcast appearance.
Also read: How to Prepare for a Recession: Essential Strategies for Financial Stability
America’s Mounting Debt Crisis
As of July 2025, US federal debt stands at $36.6–37.1 trillion, including:
- ~$29T in publicly held debt
- ~$7.4T in intragovernmental holdings (e.g., Social Security Trust Fund)
This marks a $1.37 trillion increase since July 2024 — or over $4,000 in new debt per US household — amid rising deficits and aggressive Treasury borrowing. America’s debt-to-GDP ratio now hovers around 123%, with projections showing a potential climb to 156% by 2055 under current policies.
US Debt (Source: US Debt Clock)
The latest Treasury reports reflect Dalio’s concerns. Between July and September 2025, the US expects to borrow over $1 trillion, and another $590 billion in Q4. That’s nearly $12 trillion in new Treasurys expected over the coming year — an explosive amount that raises the risk of further currency debasement and investor flight from US debt markets.
Also read: The New Currency War: Gold-Backed Stablecoins vs. the US Dollar
US Debt Interest Payments Surpass Medicare
The cost of servicing this debt is ballooning:
- Interest outlays reached $749 billion in the first nine months of 2025
- Full-year cost forecast: $921 billion, or 17% of federal spending
Interest is now the second-largest government expense — behind only mandatory programs — and is projected to eclipse spending on defense and Medicare in the near future.
Bitcoin and Gold: The Safe Haven Play?
Dalio’s new 15% recommendation marks a sharp increase from his 1–2% Bitcoin allocation guidance in 2022. While he still favors gold, Dalio acknowledges Bitcoin’s growing role as an “effective diversifier” amid macroeconomic uncertainty and faltering fiat currencies.
“The issue is the devaluation of money,” Dalio said, adding that Western economies like the U.S. and U.K. are entering a “debt doom loop” that weakens their currencies over time.
Bitcoin has surged in this environment, currently trading at $118,580, just 3% shy of its $123,091 all-time high set earlier in July. Gold, too, has hit multiple record highs over the past few months.
Bitcoin price chart (Source: CoinMarketCap)
Crypto asset manager Bitwise even posted a chart of total US debt in response to Dalio’s comments — signaling growing alignment between traditional finance and digital asset proponents on the unsustainable fiscal trajectory.
Can Bitcoin Be a Reserve Currency?
Despite his endorsement of Bitcoin’s portfolio value, Dalio remains skeptical about its long-term role in global finance:
“Governments can see who is doing what transactions on it,” he noted, citing Bitcoin’s transparency and potential code vulnerabilities as reasons why central banks are unlikely to adopt it as a reserve currency.
Also read: Bitcoin vs. Gold: Schiff Says 2025 Meltdown Proves Crypto’s Weakness
Still, Dalio’s pivot toward hard assets reinforces a growing belief among institutional investors that Bitcoin is no longer just a speculative play — it’s an essential hedge in an era of monetary excess.
Crypto Takeaways from America’s Debt Spiral
- U.S. debt is ballooning toward $37 trillion, with no sign of slowing
- Treasury to issue record-breaking levels of short-term debt in 2025–26
- Interest payments alone are on track to hit $1 trillion/year
- Bitcoin and gold are increasingly seen as lifeboats amid fiat erosion
- Dalio’s latest comments signal institutional validation of Bitcoin’s role in portfolios
Final Thought
As America edges deeper into uncharted fiscal territory, traditional hedges like gold are being joined — and in some cases outpaced — by Bitcoin. For investors seeking resilience in a time of spiraling debt and currency risk, the Dalio doctrine is clear: Hold something hard.
