Buying gold and bitcoin in the face of a debt crisis

GOLD AND BITCOIN BECOME THE PRIMARY HAVENS IN THE MARKET CRISIS OF PUBLIC DEBT

Gold and bitcoin have become the two most reliable safe havens in the face of the debt market turbulence. The final blow for both gold and bitcoin has been the U.S. Treasury's decision to double debt repurchases to contain bond sales, whose interest operates inversely to the price. The decision has had a short-term effect, but has also weakened the U.S. dollar, which has benefited gold and bitcoin.

The yellow metal has recovered to $4,600 per ounce, a price unseen since before summer. Gold is up 15% since the lows of the year in July, although it still remains 15% off the record $5,417 per ounce set at the end of January. Bitcoin has tested the resistance of $80,000 this week, also a level prior to the summer period. It has risen 30% since losing at the end of June 60,000 dollars, a price not seen since October 2024, but it falls this year by 10% and is far from the October record of $125,260.

The good shape of both assets coincides with the advice of Wall Street guru Ray Dalio, who advises reducing positions in debt and increasing them in gold and bitcoin to protect against the possible risk of a U.S. debt crisis. The founder of the Bridgewater fund believes this moment could come between three years, more or less, according to his personal account on LinkedIn.

The strategy would lead portfolios to have an exposure to gold between 10% and 15%, undermining bonds. As a complement, he added, investors should have a little bit of bitcoin to reduce risk and increase performance. U.S. long-term debt interest rates have reached levels unseen in decades. Meanwhile, Japan, the largest foreign creditor of the United States, has recently sold U.S. bonds to support its currency, the yen.

In Europe, the yield on German 30-year bonds, the main reference for long-term solvency on the continent, reached levels of 2007 in the months prior to the financial crisis outbreak. Dalio has been warning investors for months about the risk that countries in general, and the United States in particular, will increase public debt and now that investors must closely monitor the assets and regions they are exposed to.

The famous investor, who left Bridgewater completely halfway through the previous year, now considers that countries like the United Kingdom, China and Japan face tax tensions similar to those of the United States.