Investors Flock to Gold and Bitcoin Amid Soaring US Debt

The US national debt has crossed $40 trillion in August 2026, with annual interest payments approaching $1 trillion. As investors become increasingly anxious about this fiscal situation, they're buying both gold and Bitcoin as hedges against inflation.

Gold has risen more than 15% month-to-date to above $4,700 per ounce, while Bitcoin's weekly gains have surpassed 20% and it now trades at over $77,000. Ray Dalio, founder of Bridgewater Associates, recommends allocating 10-15% of investment portfolios to gold, with a modest holding in Bitcoin for improved risk-adjusted returns.

A study by Bitwise and JPMorgan found that combining gold and Bitcoin in a portfolio can produce significantly higher returns, especially during market corrections. The low correlation between the two assets historically means they tend to move in opposite directions, but during times of fiscal stress, both tend to increase in value.