The Illusion of Stock Market All-Time Highs and the Awakening of Cryptocurrency: When Fiat Currency Devaluation Becomes the Biggest Winner in 2025

In 2025, Wall Street is immersed in a celebratory atmosphere. The S&P 500 index hit a record high with an 18% increase, AI concept stocks continue to lead the market, and the profitability of the tech giants seems to provide solid support for this bull run. However, Ray Dalio, founder of Bridgewater Associates, punctures this prosperity with a set of cold data: when priced in gold, the US stock market has actually declined by 28%; the US dollar has depreciated against gold by as much as 39%. This is not growth, but a collective illusion underpinned by the collapse of currency value.

The Invisible Harvest of the Fiat System

Dalio points out that the most overlooked truth in 2025 is that all fiat currencies are depreciating, just at different speeds. The depreciation trajectory of the US dollar against major currencies is clear—0.3% against the yen, 4% against the yuan, 12% against the euro, 13% against the Swiss franc, and a staggering 39% against gold, the world's second-largest reserve asset. This means that the same S&P 500 index brings +18% joy for dollar investors but -28% pain for gold investors.

The problems in the bond market are even more severe. The 10-year US Treasury, when valued in gold, has plummeted by 34%, and cash purchasing power is ruthlessly eroded by inflation. This explains why overseas capital shows little interest in dollar assets unless engaging in costly currency hedging. More critically, approximately 🌟 trillion in US dollar debt is about to be refinanced, and the Federal Reserve’s policy inclination to suppress real interest rates has put long-term bonds into a "risk far exceeding returns" dangerous zone.

Cryptocurrency: From Speculative Tool to Safe Haven of Value

Against the backdrop of systemic fiat devaluation, the cryptocurrency market in 2025 demonstrates remarkable resilience and maturity. Bitcoin briefly soared to over $105,800 at the start of the year, though it later retreated to fluctuate around $94,000. Its positioning as "digital gold" has gained widespread recognition among institutional investors. According to the latest data, net inflows into spot Bitcoin ETFs over the past five weeks reached $6.63 billion, and BlackRock’s crypto investment portfolio grew from $54.77 billion at the start of the year to $102.09 billion, nearly doubling.

This influx of capital is not purely speculative. Chainalysis’s 2025 global adoption index shows explosive growth in crypto adoption in emerging markets facing rapid fiat devaluation. In Venezuela, amid political turmoil, Bitcoin and USDT have become de facto "digital hard currencies." From July 2024 to June 2025, crypto trading volume reached $44.6 billion, with over 30% of enterprises incorporating crypto payments into their daily operations. When national credit collapses, decentralized currencies become the only means for people to self-rescue.

The Rise of Stablecoins Offers an Immediate Remedy for Fiat Currency Crises. USDT, USDC, and other dollar-pegged stablecoins are rapidly gaining popularity in developing countries, serving as effective tools to evade capital controls and inflation. Ironically, when citizens in these countries flock to stablecoins, they are actually fleeing their own devalued fiat currencies and seeking refuge in the digital form of the dollar. This precisely confirms Dalio’s core thesis: the problem lies in the choice of fiat currency, and in the systemic flaws of the fiat system itself.

Gold and Bitcoin: Who Is the True Safe Haven?

Dalio regards gold as the "main market" performing best in 2025, rising 65% in USD terms, far surpassing the 18% gain of US stocks. But from a longer-term perspective, Bitcoin’s performance is even more astonishing. Throughout history, gold has served as a store of value for thousands of years, but its physical limitations (storage, transportation, divisibility) are increasingly evident in the digital age. In contrast, Bitcoin, with its fixed supply (21 million coins), global accessibility, divisibility, and resistance to censorship, is winning over a new generation of investors.

It is noteworthy that US government policies in 2025 are accelerating this shift. Trump-era high-leverage capitalism—combining stimulus policies, tariffs, subsidies, and deregulation—is widening the wealth gap, making currency value and affordability the top political issues. The top 10% of assets are indifferent to inflation, while the bottom 60% are squeezed by rising living costs. This distribution imbalance will intensify political polarization and impact corporate profit margins and market expectations. In this context, decentralized currencies are no longer fringe options but necessary hedges against sovereign currency over-issuance.

Outlook for 2026: From "Market Illusion" to "Value Rebuilding"

Looking ahead to 2026, Dalio’s "Big Cycle" framework signals deeper transformations: the world shifting from a multipolar order to unipolar dominance, rising military spending, expanding deficits, increasing gold demand, early-stage AI bubbles, and political disagreements over climate change responses. These forces are intertwined, reshaping capital flows and international order.

For investors, the key question is no longer "which stock to buy," but "which assets to use for storing value." As fiat devaluation becomes systemic and stock market highs are merely currency illusions, truly savvy capital is quietly reallocating into crypto infrastructure. As projects like @APRO-Oracle reveal, regardless of bull or bear markets, ensuring trustworthy on-chain data flow through oracle networks is the real "utilities" supporting the future digital economy.

Dalio’s warning reminds us: when the denomination currency itself becomes the greatest risk, all asset valuations based on it are castles in the sand. The biggest winners in 2025 are not the stock markets, but those early enough to recognize the cracks in the fiat system and decisively deploy decentralized value storage solutions. In 2026, this trend will only accelerate.

【Deep Thinking Questions】

Do you believe that in an era of systemic fiat devaluation, Bitcoin can truly replace gold as the mainstream safe haven asset? Or will stablecoins become the biggest winners during the transition?

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Disclaimer: This article is for market observation and trend analysis only and does not constitute any investment advice. Cryptocurrency markets are highly risky; please make independent judgments and proceed with caution.

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