Hedge fund Bridgewater founder Ray Dalio has once again issued a warning: the United States government debt is out of control, eroding the dollar's status as the global reserve currency. He pointed out that this trend is driving investors into gold and Crypto Assets, viewing them as alternative assets. In the next five years, factors such as debt, politics, geopolitical conflicts, and technology will intertwine, bringing about dramatic changes.
Debt pressure drags down the value of the dollar, investors turn to gold and Bitcoin.
In clarifying his erroneous statements during an interview with the Financial Times, Dalio pointed out that rather than saying that deregulation ( has weakened the government's monetary function, it is more accurate to say that "high debt and fiscal indulgence" are continuously eroding the credibility of the dollar.
He warned that major reserve currency countries around the world are facing similar dilemmas:
The poor debt situation of the US dollar and other reserve currency governments is threatening their appeal as reserve currencies and stores of value, which is also the reason for the continuous rise in the prices of gold and Crypto Assets.
He compares the current situation to the financial turmoil periods of the 1930s to 1940s and the 1970s to 1980s, pointing out that this is the final stage of his "Big Cycle Theory )Big Cycle(". Regardless of whether the government chooses to raise interest rates or print money in response, it may trigger crises such as economic recession.
The allure of "strong currencies" is rising: Crypto Assets become an alternative option.
According to Dalio, some Crypto Assets have the characteristics of an alternative to "limited supply currency". The total supply cap of Bitcoin makes it particularly attractive when the supply of the dollar continues to expand or global demand weakens.
He has repeatedly suggested that investors should allocate 15% of their investment portfolio to gold and Bitcoin as a hedging measure against inflation and debt risk: "Although central banks may be more accepting of gold, for individual and institutional investors, the trend of Bitcoin becoming a part of asset allocation is unstoppable."
)When economic risks rise, Bridgewater founder Dalio suggests allocating 15% of assets to gold or Bitcoin(
Stablecoins and National Bonds: The Risk Lies with US Treasuries, Not the Structure
The outside world is generally concerned that stablecoins holding a large amount of U.S. Treasury bonds may pose systemic risks to the financial markets. However, Dalio remains calm about this. He believes that as long as stablecoins have sufficient regulation and reserve systems, they will not pose systemic risks. The real hidden worry is the decline in purchasing power of U.S. bonds in an environment of high debt and high inflation.
In July of this year, U.S. President Trump signed the "GENIUS" Act, providing a clear compliance path for payment stablecoins. This has sparked active exploration by financial institutions and companies in regions including the United States, South Korea, Japan, Hong Kong, China, and the European Union, symbolizing a new phase of compliance in this field.
U.S. Debt Heart Attack: Major Changes Expected in the Next Five Years
Dalio describes the potential crisis that the United States may face as a "debt-fueled heart attack )debt-fueled heart attack(." He points out that the government has been running a long-term deficit, needing to deal with massive old debts while continuously incurring new debts to fill the deficit, which will ultimately put the Federal Reserve in a dilemma:
Policymakers must choose between raising interest rates and risking defaults, or printing money to pay off debts and further damaging the value of the currency. Unless there is a significant shift in policy over the next few years, both outcomes will threaten the monetary order.
He warned that this turmoil not only challenges the global monetary order but also exacerbates populism, geopolitical competition, and the industrial disruption brought about by AI. Over the next five years, the world may experience enormous and unimaginable changes.
The cracks in the US dollar financial system create opportunities for Crypto Assets.
Ray Dalio's perspective highlights again: the U.S. debt is not only a fiscal challenge but also a crack in the global financial order. As the status of the dollar gradually wavers, gold and Bitcoin are being redefined as safe havens. For investors, it tests whether asset allocation can maintain resilience amidst the severe fluctuations of this great debt cycle.
In this article, Ray Dalio warns: the U.S. debt crisis shakes the status of the dollar, and Bitcoin has become a hedging alternative. Originally appeared in Chain News ABMedia.
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Ray Dalio warns: The U.S. debt crisis shakes the dollar's status, Bitcoin has become a safe-haven alternative.
Hedge fund Bridgewater founder Ray Dalio has once again issued a warning: the United States government debt is out of control, eroding the dollar's status as the global reserve currency. He pointed out that this trend is driving investors into gold and Crypto Assets, viewing them as alternative assets. In the next five years, factors such as debt, politics, geopolitical conflicts, and technology will intertwine, bringing about dramatic changes.
Debt pressure drags down the value of the dollar, investors turn to gold and Bitcoin.
In clarifying his erroneous statements during an interview with the Financial Times, Dalio pointed out that rather than saying that deregulation ( has weakened the government's monetary function, it is more accurate to say that "high debt and fiscal indulgence" are continuously eroding the credibility of the dollar.
He warned that major reserve currency countries around the world are facing similar dilemmas:
The poor debt situation of the US dollar and other reserve currency governments is threatening their appeal as reserve currencies and stores of value, which is also the reason for the continuous rise in the prices of gold and Crypto Assets.
He compares the current situation to the financial turmoil periods of the 1930s to 1940s and the 1970s to 1980s, pointing out that this is the final stage of his "Big Cycle Theory )Big Cycle(". Regardless of whether the government chooses to raise interest rates or print money in response, it may trigger crises such as economic recession.
The allure of "strong currencies" is rising: Crypto Assets become an alternative option.
According to Dalio, some Crypto Assets have the characteristics of an alternative to "limited supply currency". The total supply cap of Bitcoin makes it particularly attractive when the supply of the dollar continues to expand or global demand weakens.
He has repeatedly suggested that investors should allocate 15% of their investment portfolio to gold and Bitcoin as a hedging measure against inflation and debt risk: "Although central banks may be more accepting of gold, for individual and institutional investors, the trend of Bitcoin becoming a part of asset allocation is unstoppable."
)When economic risks rise, Bridgewater founder Dalio suggests allocating 15% of assets to gold or Bitcoin(
Stablecoins and National Bonds: The Risk Lies with US Treasuries, Not the Structure
The outside world is generally concerned that stablecoins holding a large amount of U.S. Treasury bonds may pose systemic risks to the financial markets. However, Dalio remains calm about this. He believes that as long as stablecoins have sufficient regulation and reserve systems, they will not pose systemic risks. The real hidden worry is the decline in purchasing power of U.S. bonds in an environment of high debt and high inflation.
In July of this year, U.S. President Trump signed the "GENIUS" Act, providing a clear compliance path for payment stablecoins. This has sparked active exploration by financial institutions and companies in regions including the United States, South Korea, Japan, Hong Kong, China, and the European Union, symbolizing a new phase of compliance in this field.
U.S. Debt Heart Attack: Major Changes Expected in the Next Five Years
Dalio describes the potential crisis that the United States may face as a "debt-fueled heart attack )debt-fueled heart attack(." He points out that the government has been running a long-term deficit, needing to deal with massive old debts while continuously incurring new debts to fill the deficit, which will ultimately put the Federal Reserve in a dilemma:
Policymakers must choose between raising interest rates and risking defaults, or printing money to pay off debts and further damaging the value of the currency. Unless there is a significant shift in policy over the next few years, both outcomes will threaten the monetary order.
He warned that this turmoil not only challenges the global monetary order but also exacerbates populism, geopolitical competition, and the industrial disruption brought about by AI. Over the next five years, the world may experience enormous and unimaginable changes.
The cracks in the US dollar financial system create opportunities for Crypto Assets.
Ray Dalio's perspective highlights again: the U.S. debt is not only a fiscal challenge but also a crack in the global financial order. As the status of the dollar gradually wavers, gold and Bitcoin are being redefined as safe havens. For investors, it tests whether asset allocation can maintain resilience amidst the severe fluctuations of this great debt cycle.
In this article, Ray Dalio warns: the U.S. debt crisis shakes the status of the dollar, and Bitcoin has become a hedging alternative. Originally appeared in Chain News ABMedia.