Ray Dalio warns that the status of the US dollar is precarious and suggests investing in Bitcoin and gold to hedge against currency depreciation risks.
Billionaire investor and Bridgewater Associates founder Ray Dalio has once again warned about the long-term outlook for the US dollar, pointing out that the United States is in the late stages of a debt cycle, which will threaten the dollar's status as the global reserve currency. He believes that this shift will stimulate market demand for limited-supply assets such as Bitcoin (BTC) and gold, and he advises investors to use them as hedging tools.
Dollar Pressure Intensifies: Debt Cycle Enters Later Stage
Ray Dalio pointed out that the U.S. government has an annual debt repayment cost of about 1 trillion dollars, coupled with ongoing borrowing demands, which is undermining market confidence in U.S. Treasury bonds and the dollar.
Foreign capital withdrawal: Foreign holders have begun to reduce their allocation in U.S. Treasury bonds and shift towards gold.
The Federal Reserve's dilemma: raising interest rates could trigger defaults and market turmoil, while printing money would further weaken the value of the dollar.
Political risk: Threats to the independence of the Federal Reserve may accelerate the loss of confidence.
Hedging Value of Bitcoin and Gold
Ray Dalio emphasized that Bitcoin, like gold and other scarce assets, has the characteristic of limited supply, making it an attractive alternative currency when the supply of fiat currency increases or the demand decreases.
Historical Comparison: During the periods of 1930–1940 and 1970–1980, the value of fiat currency significantly dropped relative to "hard currency".
Investment advice: Allocate up to 15% of the investment portfolio to alternative assets such as gold and Bitcoin to hedge against currency devaluation risks.
Stablecoins and Systematic Risk
When asked about the systemic risks of stablecoins and exposure to U.S. Treasuries, Ray Dalio stated that he does not believe stablecoins themselves pose a significant threat; the real systemic risk comes from the decline in purchasing power of U.S. Treasuries.
"The Great Cycle" and the Uncertainty of the Next Five Years
Ray Dalio places the current situation within the context of what he calls the "big cycle", which includes:
Debt and Fiscal Pressure
Political division within the United States
Geopolitical Conflicts
Climate Risk
Technological Disruption
He warned that the convergence of these forces could bring "huge and unimaginable changes" in the next five years.
Conclusion
Ray Dalio's latest warning highlights the structural challenges facing the US dollar and once again brings Bitcoin into the view of global investors. As confidence in the dollar's reserve status wavers, allocating Bitcoin alongside scarce assets like gold may become an important strategy for institutional and individual investors to hedge against currency depreciation risks in the coming years.
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Ray Dalio warns that the status of the US dollar is precarious and suggests investing in Bitcoin and gold to hedge against currency depreciation risks.
Billionaire investor and Bridgewater Associates founder Ray Dalio has once again warned about the long-term outlook for the US dollar, pointing out that the United States is in the late stages of a debt cycle, which will threaten the dollar's status as the global reserve currency. He believes that this shift will stimulate market demand for limited-supply assets such as Bitcoin (BTC) and gold, and he advises investors to use them as hedging tools.
Dollar Pressure Intensifies: Debt Cycle Enters Later Stage
Ray Dalio pointed out that the U.S. government has an annual debt repayment cost of about 1 trillion dollars, coupled with ongoing borrowing demands, which is undermining market confidence in U.S. Treasury bonds and the dollar.
Foreign capital withdrawal: Foreign holders have begun to reduce their allocation in U.S. Treasury bonds and shift towards gold.
The Federal Reserve's dilemma: raising interest rates could trigger defaults and market turmoil, while printing money would further weaken the value of the dollar.
Political risk: Threats to the independence of the Federal Reserve may accelerate the loss of confidence.
Hedging Value of Bitcoin and Gold
Ray Dalio emphasized that Bitcoin, like gold and other scarce assets, has the characteristic of limited supply, making it an attractive alternative currency when the supply of fiat currency increases or the demand decreases.
Historical Comparison: During the periods of 1930–1940 and 1970–1980, the value of fiat currency significantly dropped relative to "hard currency".
Investment advice: Allocate up to 15% of the investment portfolio to alternative assets such as gold and Bitcoin to hedge against currency devaluation risks.
Stablecoins and Systematic Risk
When asked about the systemic risks of stablecoins and exposure to U.S. Treasuries, Ray Dalio stated that he does not believe stablecoins themselves pose a significant threat; the real systemic risk comes from the decline in purchasing power of U.S. Treasuries.
"The Great Cycle" and the Uncertainty of the Next Five Years
Ray Dalio places the current situation within the context of what he calls the "big cycle", which includes:
Debt and Fiscal Pressure
Political division within the United States
Geopolitical Conflicts
Climate Risk
Technological Disruption
He warned that the convergence of these forces could bring "huge and unimaginable changes" in the next five years.
Conclusion
Ray Dalio's latest warning highlights the structural challenges facing the US dollar and once again brings Bitcoin into the view of global investors. As confidence in the dollar's reserve status wavers, allocating Bitcoin alongside scarce assets like gold may become an important strategy for institutional and individual investors to hedge against currency depreciation risks in the coming years.