Bridgewater founder Dalio: The U.S. debt crisis will arrive in the next three years at the earliest, suggesting to reduce bond holdings and increase allocations in gold and Bitcoin

Ray Dalio, the founder of Bridgewater Associates, warned that the annual budget deficit in the United States has reached $2 trillion, with approximately $10 trillion in debt needing to be refinanced. If the current trajectory is not changed, a debt crisis could arrive "within three years, with a two-year margin of error."

In terms of asset allocation, Dalio advises investors to reduce their bond holdings to avoid debt risks; increase their allocation to gold, raising it to 10% to 15% of their portfolio; and hold a small amount of Bitcoin to hedge against government credit risk. Dalio also calls for the U.S. to reduce the budget deficit from the current level of about 6% of GDP to 3%, through measures including cutting spending, increasing taxes, and lowering interest rates.

As a result of these statements, gold prices surged to their highest level since May on Friday, and Bitcoin broke through $77,000, marking the largest weekly increase since 2023.