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.
Confidence has returned to crypto markets after Bitcoin saw a sudden rally to gain more than 23% this week to trade around $77,559 at the time of writing. The price briefly topped $79,000 on Friday.
Charting platform Barchart highlighted on Thursday that Bitcoin’s (BTC) price had crossed above its 200-day moving average for the first time since November 2025.
The 200-day moving average is widely used to gauge longer-term market trends, with moves above the indicator viewed as a sign of bullish momentum. Many now believe/hope the cycle has finally flipped positive.
Ethereum gained 31%, Solana gained 28% and XRP surged an astonishing 53%.
The Bitcoin and Ether ETFs took more than $2.61 billion in inflows between them last week, and Micheal Saylor’s Bitcoin investments via Strategy have crossed the breakeven point of $75,385 — officially returning him to the status of far-sighted Bitcoin visionary, rather than degenerate financial engineer. Polymarket odds of Bitcoin reaching $90,000 before 2027 hit 48%.
Bitcoin’s weekly price chart. Source: CoinMarketCap
The rally in crypto prices was also reflected in the share prices of publicly listed crypto related firms including Canaan, Metaplanet, Coinbase and Robinhood which all saw double digit gains.
The US debt pile crossed $40 trillion this week, and there’s absolutely no plan to balance the budget or to pay it down apart from a vague aspiration to grow the economy. The annual cost of paying interest on the debt has exceeded the cost of Medicare and is second only to social security as the Government’s largest expense.
The Kobeissi Letter attributed the rapid gains in precious metals and crypto to a combination of inflation, deficit spending and US Treasury policy. Record government deficit spending and the Treasury Department’s pledge to at least double the size of certain debt buyback operations to $4 billion helped drive the rally in both asset classes, Kobeissi argued.
The founder of the Bridgewater Associates hedge fund, Ray Dalio, believes investors should allocate around 15% of their portfolios to gold and “a bit of Bitcoin” to position for the impending fallout from the US’s debt problems.
“My guess, which I suppose will be a bad one, is that [a US debt crisis] will come in three years, give or take two, if the course we’re on is not changed,” said Dalio.
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