[Edaily Reporter Lee Jeong Hun ] Ray Dalio, founder of Bridgewater Associates—a leading hedge fund on Wall Street—argued that the U.S. could face a debt crisis as soon as three years from now. He urged investors to reduce their bond holdings and allocate up to 15% of their assets to gold as a hedge against risk, while also diversifying a portion of their investments into Bitcoin.

Dalio, a billionaire investor often referred to as a Wall Street legend, stated in a post on his LinkedIn page on the 21st (local time), “Now is the time to diversify into countries with sound finances and various assets (other than the U.S. and U.S. Treasury bonds).” He said that by reducing the bond allocation and allocating about 10–15% of the portfolio to gold and a “small portion” to Bitcoin, investors can reduce risk while increasing returns.

Dalio has consistently warned of the risks posed by rising government debt. His remarks came as long-term U.S. Treasury yields rose to their highest levels in years and Japan—the U.S.’s largest foreign creditor—was selling U.S. Treasuries to defend the yen. To calm the sharp decline in the Treasury market, U.S. Treasury Secretary Scott Bessent unexpectedly announced plans this week to expand the repurchase of long-term Treasuries. However, so far, this measure has achieved little more than short-term market stabilization.

Dalio explained that the recent situation aligns with the progression of the “debt cycle” he outlined in his book *How Countries Go Broke: The Big Cycle*.

According to his argument, as debt rises and the cost of servicing principal and interest continues to increase, a point eventually arrives when investor demand for government bonds cannot keep pace. When that happens, the government has no choice but to accept higher interest rates or have the central bank print money to purchase government bonds. In this process, he argues, the value of the currency falls and inflationary pressures mount.

Dalio estimated U.S. government revenue this year at approximately $5.5 trillion and spending at $7.5 trillion. Consequently, he projected a fiscal shortfall of about $2 trillion. He estimated that interest costs alone would reach approximately $1 trillion this year, and the amount of debt that needs to be rolled over would total about $10 trillion.

Dalio warned that if the current policy path remains unchanged, a U.S. debt crisis could occur “within three years, give or take about two years.” In other words, he is considering the possibility that a crisis could materialize within a range of roughly one to five years. He argued that the budget deficit, currently at about 6% of gross domestic product (GDP), must be reduced to 3%. To achieve this, he proposed simultaneously pursuing cuts in government spending, increases in tax revenue, and interest rate cuts. Dalio assessed that not only the U.S. but also the U.K., China, and Japan are facing similar fiscal pressures.

He stated that it is precisely for this reason that he “expects non-government-produced monies, such as gold or Bitcoin, to perform relatively well.” In fact, the price of gold surged that day to its highest level since last May, and Bitcoin also broke through the $77,000 mark, with projections indicating it will post its largest weekly gain since 2023.