We are so back! Bitcoin’s 23% rally on US debt policy: Hodler’s Digest
The US may face a debt crisis within three years according to Ray Dalio, and debt-related issues helped fuel a rally in Bitcoin that could mark the beginning of a new cycle.
Ray Dalio, founder of Bridgewater Associates, warned of a potential US debt crisis within three years, contributing to a Bitcoin rally that could signify a new cycle. Bitcoin surged over 23% this week, trading around $77,559, briefly topping $79,000. The cryptocurrency's 200-day moving average was crossed for the first time since November 2025, indicating bullish momentum.
Other cryptocurrencies like Ethereum, Solana, and XRP also saw significant gains. Bitcoin and Ether ETFs received over $2.61 billion in inflows. Michael Saylor's Strategy investments in Bitcoin crossed its breakeven point of $75,385. Polymarket odds of Bitcoin reaching $90,000 before 2027 stand at 48%. US listed crypto firms such as Canaan, Metaplanet, Coinbase, and Robinhood reported double-digit gains.
The US debt topped $40 trillion, with interest costs surpassing those of Medicare and being the government's second-largest expense. Ray Dalio suggested allocating 15% of portfolios to gold and some Bitcoin to hedge against potential US debt fallout. President Donald Trump supported the CLARITY Act, which could boost US competitiveness against China, but Democrats may oppose it without additional concessions.
The SEC proposed new rules for the crypto industry, potentially pressuring lawmakers to pass the CLARITY Act or trigger a new Initial Cryptocurrency Offering boom. Bitcoin soared 23.5%, Ethereum rose 31.1%, and XRP climbed 53.3% during the week. The total market cap reached $2.63 trillion.
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