Predicting a global debt crisis, American entrepreneurs: Should buy more BTC and gold!

Global debt is “unsustainable”, bosses worry about significant currency devaluation.

Ray Dalio, founder of the famous hedge fund Bridgewater, recently made a cautionary statement at a financial conference in Abu Dhabi, pointing out that the world’s major economies, such as the United States and China, are falling into unprecedented high debt levels. Dalio bluntly said that this “unsustainable” debt structure may trigger a debt crisis in the next few years, which in turn will lead to a sharp depreciation of the currency. His view is based on the long-term observation that countries with such high debt ratios are “unsustainable” and will face enormous financial pressures in the future, which will eventually lead to severe inflation and a decline in the value of currencies.

In the face of possible currency turmoil in the future, Dalio has made a clear recommendation: stay away from debt assets such as bonds and turn to “hard assets” for self-preservation. He specifically mentioned gold and Bitcoin as the top choices, seeing them as key means to defend against currency depreciation.

He emphasizes not to be confused by the short-term changes in the daily market, and what really needs attention are the “five forces driving the global economy” - debt, money flow, internal political order, external geopolitical order, and technological progress.

In the macroscopic pattern, whether it is gold or bitcoin, can be regarded as “hard currency”, which can provide relatively stable value support when the currency credit is shaken.

Source: Ray Dalio, founder of Bridgewater Associates, image source: Cointelegraph

Bitcoin’s status is recognized, no longer one-sided pessimism.

Dalio has been reserved about cryptocurrencies in the past, but in recent years he has gradually changed his views and begun to recognize the value of Bitcoin. As early as 2022, he suggested in an interview that investors could allocate about 2% of their assets to Bitcoin and gold to hedge against inflation risks. Now, he is even more explicit about ‘owning some Bitcoin.’ This change in attitude indicates that after experiencing multiple market baptisms, Bitcoin has gradually climbed from a simple speculative target to an integral part of mainstream investor portfolios.

However, not everyone is optimistic about Bitcoin’s policy development. Well-known gold supporter Peter . Peter Schiff made it clear that the United States is about to change, the new President Trump is expected to take office in January next year, and the outside world is rumored that the United States may launch the “Bitcoin National Reserve Program” in 2025, but Schiff called on the current government to take advantage of this window of time to sell all the bitcoins currently held by the US government. He believes that by doing so, it will not only reduce the 2024 budget deficit for the government, but also avoid the adverse effects of endorsement of bitcoin at the national level. Obviously, in Schiff’s eyes, building a “national bitcoin reserve” is a harmful plan.

Source: X Well-known gold supporter Peter Schiff calls on the current government to sell all the bitcoins it currently holds.

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Hedging against inflation, the value of “hard assets” is attracting attention.

Dealing with the unstable currency environment with ‘hard assets’ has become a hot topic in the investment community. Gold has long been a typical representative of hedging assets, while Bitcoin, due to its characteristics that differ from traditional financial systems, has gradually been seen as digital gold in recent years. For many investors, Bitcoin’s digital scarcity and gold’s physical scarcity have similar underlying logic: they are not dominated by a single country’s policies, are not easily ‘increased issuance’, and their value is expected to be highlighted when trust in fiat currency declines.

Warnings from investment giants like Dalio undoubtedly ring the alarm bell once again: when countries endlessly borrow, they will ultimately face a crisis of currency confidence. In this crisis, Bitcoin, with its characteristics of resisting inflation, censorship, and cross-border circulation, may attract more conservative and aggressive investors. The reminder from Schiff at this time is also not to be ignored, representing a faction that still holds a skeptical attitude towards digital currencies. They believe that encrypted assets still have high volatility and high-risk characteristics, and if the government intervenes too deeply, it may bring about great uncertainty in policy and market operations.

In the intense interweaving of perspectives from both sides, the interactive evaluation of Bitcoin and gold is bound to become more distinct in the coming years. If, as Dalio predicts, countries around the world fall into deep debt crises, capital may quietly withdraw from the bond market and turn to assets not restricted by credit debt. Gold and Bitcoin will be at the core of market participants’ arguments, and I believe their positions in the future financial landscape will become a focus of global investor attention.

Global economic turbulence requires more flexible asset allocation strategies

In an environment filled with uncertainty, investors should not only focus on the short-term market fluctuations, but should emphasize the soundness of long-term asset allocation. Dalio’s call to “own more gold and bitcoin” is not a passing fad, but rather the result of his observation of the five major global drivers. His advice is to follow the trend, avoid debt-based assets, and allocate more to hard assets to protect the portfolio’s resilience in times of inflation and fiscal instability. Whether advocates in the crypto world or believers in traditional finance, it is necessary to have insight into the macro changes in global politics, economics, society, and technological progress in order to stand firm in the possible “currency devaluation storm.”

Facing the upcoming new situation, gold and Bitcoin may take turns to become the focus of news in the coming years. Some people see them as the “last line of trust,” while others dismiss them as “unsubstantiated reputation.” In this complex situation, investors must carefully consider their asset allocation and consider transferring some assets to so-called ‘hard currency’ tools in order to seek a relatively safe haven in the uncertain global economy ahead.

【Disclaimer】There are risks in the market, and investment should be cautious. This article does not constitute investment advice. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their specific situation. Investing based on this is at your own risk.

“Predicting a global debt crisis, American entrepreneurs: Should buy more Bitcoin and gold!” This article was first published in “Crypto City”