US public debt threatens the dollar and strengthens cryptocurrencies, says Ray Dalio

In an analysis aimed at Financial TimesRay Dalio said that the increase in debt in the US Bitcoin and gold.

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• Dalio considers that the debt threatens the position of the dollar as a reserve currency.
• The investor recommends diversifying in Bitcoin and gold like “Hard money.”
• He also warned about the link between Stablecoins and the US fiscal policy.

Multimillionaire Ray Dalio, founder of Bridgewater Associates, He warned that the growing indebtedness of governments represents a more serious threat to the reserve status of the dollar than the deregulation itself, which has a positive impact on Bitcoin and gold.

The explanatory came to place in comments written to the Financial Timesreviewed by The Blockpublished after accusing the environment of distorting its position. There, he pointed out that fiscal excesses are weakening confidence in fiduciary currencies as value reserves.

Dalio argued that this dynamic is pushing investors towards alternative assets such as gold and cryptocurrencies, a phenomenon that compared to what happened in the 1930th and 1970–80s. As explained, The loss of attractiveness of reserve currencies reinforces the perception of Bitcoin and gold as financial shelters.

The businessman recalled that in December he recommended that investors consider Bitcoin as “Hard money”especially in a scenario of growing national debt. Although cryptocurrencies not expected to replace the dollar, he said that the sector has already established itself as a viable alternative.

Cryptocurrencies and reserve assets

Dalio stressed that Bitcoin, With its maximum supply of 21 million currencies, it is the clearest example of a limited offer asset. This feature makes it an attractive option against monetary expansion or an eventual fall in the global demand for dollars. In July, he recommended that a porpholio adjusted by risk should allocate up to 15 % to gold and/or Bitcoin, and revealed that he maintains a fraction of his heritage in the cryptocurrency.

The investor said that, given the deterioration of fiduciary systems, market participants will tend to diversify towards “Hard currencies” as Bitcoin and gold. According to his vision, financial resilience will depend more and more on these scarce assets against the risks of monetary depreciation.

Risks for Stablecoins and the new regulation

Dalio also referred to the risks associated with the stablcoins. Ruled out that Your strong exposure to bonds Treasure can generate a systemic risk, provided they are well regulated. Clarified, however, that These stable currencies are inevitably linked to the fiscal health of the United States and the country’s ability to preserve the purchasing power of their debt.

The comment comes shortly after, on July 18, President Donald Trump signed the Genius Act, The first federal law that regulates the Stablcoins. This regulation forces them to be fully backed by liquid assets such as dollars or bonds of the Treasure, It requires annual audits for issuers with capitalizations greater than USD $ 50,000 million and establishes parameters for its international issuance.

The late debt cycle and its risks

Dalio framed these tensions in a “Late Debt Cycle”where those responsible for economic policy face a complex dilemma: allow the rise of interest rates, with the risk of triggering a default crisis, or printing more money to cover the obligations, further weakening the value of the currencies. Both alternatives, according to him, endanger the monetary order if fiscal trends are not corrected.

Beyond cryptocurrencies, the billionaire expressed concern about the loss of independence of the Federal Reserve (Fed)the growing state intervention in business and the rise of dynamics that evoke the 30s. Among them mentioned populism, geopolitical rivalry and technological disruption.

A warning for the next decade

Dalio concluded that the interaction between debt, politics, climate change and advances in artificial intelligence will mark deep transformations and “Inimaginable” during the next five years. For investors, the message is clear: diversifying the risk and betting on assets that do not depend on the ability of governments to sustain increasing debts.

Article written by a content editor. Edited by Angel Di Matteo / Diariobitcoin

Original image of Diariobitcoin, created with artificial intelligence, for free use, licensed under public domain.

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