Dalio Warns of US Debt Crisis, Backs Bitcoin Over Bonds

Ray Dalio, founder of Bridgewater Associates, has shifted his stance on cryptocurrency and precious metals, now advising investors to reduce their exposure to bonds and allocate a portion to gold and Bitcoin.

Dalio's warning is centered around the rapidly deteriorating US fiscal position, where federal spending outpaces revenue by $2 trillion. He estimates that a US debt crisis could arrive within three years, give or take two.

To mitigate this risk, Dalio recommends diversifying across financially strong countries and asset classes while reducing exposure to debt securities like bonds. Instead, he suggests allocating 10-15% of holdings to gold and holding 'a bit' of Bitcoin as protection against potential inflation.